GST Reforms: How Two-Slab Structure Could Transform Housing Prices and Demand
Industry experts believe that the simplification of GST into two slabs could significantly impact housing prices and buyer sentiment, making homes more affordable and boosting demand.
Gst ReformsReal EstateHousing PricesDemandTax RationalisationReal EstateAug 22, 2025
Industry experts say the simplification could have a notable impact on housing prices and buyer sentiment. Gaurav K Singh, Chairman & Founder of Womeki Group, described the reform as “a transformative step for Indian real estate” that could improve pricing efficiency and transparency, ultimately boosting buyer confidence and accelerating sales.
Manik Malik, CEO of BPTP, said that while developers will continue to pay 18% GST on contract services, the overall market benefits are clear. “Improved liquidity, streamlined compliance, and enhanced investor and homebuyer sentiment are undeniable,” he said, noting that a rational tax framework fosters long-term confidence and demand in the sector.
Yashank Wason, Managing Director at Royal Green Realty, highlighted the potential effect on affordability, pointing out that lower input tax for developers could reduce project costs and make housing inventory more accessible to buyers. “By bringing down overall project costs, this decision can unlock demand and improve buyer sentiment,” he said.
Rakesh Malhotra, Founder and Chairman of PRIME Developments, added that the simplified structure “significantly reduces developer input tax costs, making housing projects more affordable,” which could ease the financial burden on buyers, boost demand, and accelerate inventory clearance.
Legal expert Venket Rao of Intygrat Law Offices emphasised the regulatory clarity the reform brings, strengthening transparency under the Real Estate (Regulation and Development) Act (RERA) and helping developers, financial institutions, and homebuyers navigate the sector more efficiently.
What it means for buyers? Analysts say the two-slab GST system could translate into savings for homebuyers. Projects previously taxed at 12% could now see costs fall, potentially lowering the overall purchase price by several percentage points depending on the project size. Experts believe this could stimulate demand in both residential and commercial real estate, improve market liquidity, and make housing more accessible to first-time buyers and middle-income families.
Frequently Asked Questions
What is the new GST structure proposed by the GoM?
The new GST structure proposed by the Group of Ministers (GoM) simplifies the Goods and Services Tax (GST) into two slabs of 5% and 18%, removing the 12% and 28% rates.
How will the new GST structure affect housing prices?
The new GST structure could potentially lower housing prices by reducing input tax costs for developers, which may translate into savings for homebuyers.
What are the benefits of the new GST structure for developers?
The new GST structure reduces developer input tax costs, making housing projects more affordable and potentially accelerating inventory clearance.
How will the simplified GST structure impact buyer sentiment?
The simplified GST structure is expected to improve buyer sentiment by making housing more affordable and accessible, thus boosting demand and market liquidity.
What regulatory changes will the GST reform bring under RERA?
The GST reform will bring regulatory clarity and strengthen transparency under the Real Estate (Regulation and Development) Act (RERA), helping developers, financial institutions, and homebuyers navigate the sector more efficiently.
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