GST 2.0: How Will Cuts in Cement, Marble, and Tile Rates Impact Homebuyers?

While immediate price reductions for homebuyers may be limited, real estate developers are expected to pass on savings through festive offers and flexible payment plans, making homes more affordable.

GstReal EstateHomebuyersConstruction MaterialsSavingsReal Estate NewsSep 06, 2025

GST 2.0: How Will Cuts in Cement, Marble, and Tile Rates Impact Homebuyers?

Real Estate News:The GST Council’s decision to reduce tax rates on key construction materials like cement, granite, and marble is expected to lower project costs for real estate developers and offer some relief to homebuyers. However, if you're planning to purchase an apartment this festive season, don’t expect immediate price reductions, especially in ongoing projects that are already in advanced stages of construction and material procurement.

In such cases, developers are more likely to offer festive discounts, flexible payment plans, or customised deals rather than outright price cuts, say experts. For new project launches, the benefits of the GST reductions will begin to reflect more directly. As fresh procurement cycles kick in, developers are expected to see a 2–4% drop in overall construction costs, which could eventually translate into more competitive pricing for buyers.

GST 2.0 aims to bring cement and ready-mix concrete under 18% GST (down from 28%), bricks, tiles, and sand to 5% from 18%, and paints and varnishes to 18% (down from 28%). “These changes will bring down overall construction costs going forward as it will result in a reduction of GST burden by about 20% across various segments of housing, commercial, industrial, and warehousing. Additionally, affordable and mid-segment housing stand to gain significantly as reduced construction costs can be passed on to homebuyers, enhancing home ownership possibilities. Coupled with the upcoming festive season, this will augur well for housing sales in the country,” said Anurag Mathur, CEO, Savills India.

The reduction in GST on cement, from 28% to 18%, is projected to lower overall construction costs by approximately 3% to 5% for developers. According to industry experts, this could translate into 1% to 1.5% savings for homebuyers, depending on the project stage. Even a modest 2% to 3% cost reduction can result in savings of ₹1–₹3 lakh, enough to reduce upfront payments or lower loan requirements, particularly benefiting mid-income buyers when combined with festive offers and flexible payment plans.

Even modest savings of 2% to 3% “can make a meaningful difference in the middle-income segment, especially when combined with festive offers and payment plans,” says Sam Chopra, president and Country Head, eXp Realty India, a real estate brokerage. A 2% to 3% reduction translates to a savings of ₹1 - ₹3 lakh, which can either help reduce the upfront payment or lower the loan amount required. This increase in affordability and confidence is significant for first-time buyers and small players, especially with good payment plans or offers during festival time, he explained.

For the ₹50 lakh–₹1 crore housing segment, this creates room for greater affordability, though the actual extent of benefit passed on will vary depending on project stage, procurement cycles, and contractual structures, says Vishal Tony Vincent, Managing Director, Aratt Developers, a Bengaluru-based real estate company.

However, this does not mean that immediate price reductions will happen. “Developers will likely first promote the many benefits through festive discounts, flexible payment programs, or personalised offers,” said Ashish Kukreja, founder and CEO, Homesfy, a real estate advisory. For new projects, the benefit will begin to flow in as soon as fresh procurement cycles start, with overall construction costs expected to ease by roughly 2-4% once the lower rates are fully reflected, said Mohit Goel, Managing Director, Omaxe, a real estate developer.

While immediate price cuts may not be a reality, most developers are expected to pass on a significant portion of these savings to buyers, either through price adjustments, flexible payment plans, or attractive festive offers rather than an immediate flat price cut, said Binitha Dalal, founder and managing director, Mt. K Kapital, a real estate-focused investment platform. Some developers may use this cushion to avoid price hikes in upcoming launches, though ongoing projects are unlikely to see any impact, said another developer.

The market itself is the strongest regulator. In today’s competitive landscape, if one developer passes on benefits, others are compelled to follow. In addition, RERA-mandated disclosures and consumer forums keep pricing structures more transparent than ever before. “Brokers and channel partners also act as watchdogs; they know when value is being passed on and when it isn’t, and buyers increasingly demand that clarity,” says Chopra.

For first-time buyers, every bit of savings adds to affordability. Even a 1–1.5% reduction can be the difference between stretching budgets or confidently making a purchase. With the RBI having paused rate cuts after a cumulative 1% reduction over the three policy reviews, borrowers can also benefit from lower interest rates.

Buyers could focus on new launches and mid-segment projects, which may pass on benefits faster through discounts or flexible payment plans. Check for any festive season discounts that developers are offering. It is also important that you consult brokers or legal advisors to ensure RERA compliance and transparent pricing. Combine savings and take advantage of lower rates to budget carefully.

Frequently Asked Questions

What is the GST Council’s recent decision regarding construction materials?

The GST Council has decided to reduce tax rates on key construction materials like cement, granite, and marble, bringing cement and ready-mix concrete under 18% GST (down from 28%), bricks, tiles, and sand to 5% (from 18%), and paints and varnishes to 18% (down from 28%).

How will these changes affect real estate developers?

These changes are expected to lower overall construction costs for developers by about 20% across various segments of housing, commercial, industrial, and warehousing, resulting in a 2–4% drop in overall construction costs.

Will homebuyers see immediate price reductions?

Immediate price reductions are unlikely, especially in ongoing projects. Developers are more likely to offer festive discounts, flexible payment plans, or customised deals rather than outright price cuts.

How will the GST reduction benefit new project launches?

For new project launches, the benefits of the GST reductions will begin to reflect more directly. As fresh procurement cycles start, developers are expected to see a 2–4% drop in overall construction costs, which could translate into more competitive pricing for buyers.

What should homebuyers do to take advantage of these changes?

Homebuyers should focus on new launches and mid-segment projects, which may pass on benefits faster through discounts or flexible payment plans. It is also important to check for any festive season discounts and consult brokers or legal advisors to ensure RERA compliance and transparent pricing.