The Goods and Services Tax (GST) Council’s decision to rationalise rates on key construction materials has sparked optimism across India’s real estate sector, with industry leaders calling it a landmark reform that will ease cost pressures, strengthen affordability, and stimulate fresh demand.
“The new GST reform marks a critical turning point for India’s real estate industry. By streamlining the tax structure and lowering GST on essential construction materials like cement, marble, granite, and bricks, we will see a significant reduction in input costs. For developers, this translates into eased working capital pressures, while for homebuyers—especially in the affordable and mid-segment categories—it improves overall affordability,” said Amit Paranjape, Director – Business Development, Paranjape Schemes Construction Ltd. He added that coming just ahead of the festive season, the reform will “create fresh demand through discounts and flexible payment options, paving the way for healthier market dynamics and sustainable growth across the sector.”
Echoing this sentiment, Binitha Dalal, Founder & Managing Partner, Mt. K Kapital, said, “The rate rationalisation by the government is a welcome move and marks the first step towards a series of bold initiatives to strengthen the Indian economy. For upcoming projects, this reform could lead to cost savings of up to 5%, depending on their stage of execution and material requirements. The impact on ongoing projects, however, is likely to be relatively modest.” She further stressed the need for more support, noting, “The government should take additional steps to give a strong boost to affordable housing and reconsider the double indexation of GST on redevelopment and JDAs.”
For developers such as Omaxe, the timing is crucial. “The introduction of a two-slab GST structure is a timely reform that we wholeheartedly welcome. By reducing rates on key inputs like cement, granite and marble, the government has eased cost pressures in construction and simplified compliance, improving affordability for homebuyers, especially in the under-construction segment,” said Mohit Goel, Managing Director. He highlighted that with stable interest rates and strong festive sentiment, the sector is poised for growth in metros and tier-2 markets.
Amrita Gupta, Director, Manglam Group, pointed out the strong festive tailwinds: “The festive quarter has always been a natural catalyst for homebuying and this year the backdrop is even stronger. The GST Council’s recent cuts, from 12 [er cent to 5 per cent on marble and granite blocks and 28% to 18% on key cements, signal softer input costs and help ease pressure on future pricing.” She observed that in tier-2 cities like Jaipur, “families demanding lifestyle-focused homes” are driving momentum, with banks’ festive loan schemes further boosting confidence.
In lifestyle and holiday home markets, the move is equally encouraging. “The GST reduction on key construction materials like marble, granite and cement is a timely boost for the sector. Lower input costs will help developers create better-designed, high-quality homes while keeping projects viable. For markets such as Goa, where interest in second homes and holiday villas is accelerating, especially among NRIs, this move supports sustainable growth,” said Aditya Kushwaha, CEO and Director, Axis Ecorp.
Others underlined the broader ripple effect of the reform. “It is a welcome move by the Government to reduce GST on cement from 28% to 18%. This step will surely benefit the real estate industry, particularly at a time when costs are rising, as it will help in controlling overall expenses,” noted Sachin Bhandari, Executive Director & CEO, VTP Realty. However, he added that “more initiatives for reduction or refinement of GST in the real estate sector should have been introduced, considering it is the second-largest sector in the country and has a cascading impact across multiple allied industries.”
According to Aayush Madhusudan Agrawal, Founder & Director, Inspira Realty, “The transition to a two-slab GST structure is a pivotal step towards simplifying tax compliance and improving cost management in real estate. Reduced complexity enables faster, more efficient project execution, lowering overall construction costs, a crucial factor in a price-sensitive market like India.”
Summing up the industry’s optimism, Chandresh Mehta, Executive Director, Rustomjee Group, said, “The GST reforms mark a decisive and positive step for the construction & real estate sector. With the GST on cement reduced from 28% to 18%, along with similar cuts on materials like marble, granite, and sand-lime bricks, this will definitely ease the cost pressure that the industry has been facing for some time. For homebuyers, this will translate into tempering of prices, particularly in the affordable and mid-mass segment. These measures will definitely spur demand for housing and consequently have a cascading impact on industries related to construction and real estate.”
