Homebuyers Await GST Benefits as Real Estate Sector Seeks Clarity
Homebuyers may have to wait to benefit from reduced GST rates on construction materials, as real estate industry leaders await clarity from cement manufacturers. The potential cost reductions could be significant, but the impact is expected to be felt only in October.
GstReal EstateHomebuyersConstruction CostsCement ManufacturersReal Estate MumbaiSep 21, 2025
Executives are particularly concerned about the timing and extent of the cost reductions. G Ram Reddy, president-elect of the Confederation of Real Estate Developers’ Associations of India (CREDAI), stated, “We are yet to get clarity from cement manufacturers about how much benefit will be passed on to builders. We are expecting to see some impact in the first week of October, following which the builders can decide how much construction cost can be reduced.”
The government’s decision to lower tax rates on essential construction materials such as cement, marble, and granite, following the GST Council’s recommendations, is poised to benefit the real estate sector. According to experts, this move is expected to reduce project costs for developers and homebuyers, potentially leading to increased affordability and accelerated project launches.
G Hari Babu, national president of the National Real Estate Development Council (NAREDCO), expressed optimism about the potential benefits: “We are hopeful that the cement industry will also pass on these benefits to the real estate sector so that the ultimate benefit reaches customers in the form of reduced housing costs. If the cement industry chooses not to pass on the benefit, the real estate sector may consider seeking legal opinion on the matter and, if required, request intervention from the government. Our objective is not confrontation, but to ensure that the benefits of GST reforms are fairly transmitted across the ecosystem and ultimately reach the end consumers.”
Construction costs are projected to reduce by about Rs 1,000 per square metre, or 3-5%, according to industry executives. In some cases, the reduction could even be up to 10%. “This advantage can be directly passed on to customers, making homes and commercial projects more affordable. Such a move will build customer confidence and provide much-needed momentum to the sector,” said Hari Babu.
Once the cement industry passes on the benefit, it will directly reduce project costs, enabling developers to offer more competitive pricing. This will help deliver better value to customers, improve affordability, and contribute positively to the growth of the entire real estate sector. Harsh Vardhan Bansal, president of NAREDCO Delhi, added, “In addition to cement, the benefit to the customers can also be passed on from the savings on air conditioning. A lot of developers give apartments by installing the AC, and the cost saved on GST reduction can now be passed on to the buyer.”
The real estate sector is closely monitoring the situation and remains hopeful that the benefits will be passed on to consumers, ultimately leading to a more vibrant and affordable housing market.
Frequently Asked Questions
What is the current uncertainty in the real estate sector regarding GST benefits?
The uncertainty lies in how much benefit will be passed on by cement manufacturers to builders and, subsequently, to homebuyers. The real estate industry is awaiting clarity on this.
When are the benefits of reduced GST rates expected to be felt by homebuyers?
The benefits are expected to be seen in the first week of October, according to industry executives.
How much are construction costs expected to reduce due to the GST changes?
Construction costs are projected to reduce by about Rs 1,000 per square metre, or 3-5%, and possibly up to 10% in some cases.
What other materials besides cement are expected to benefit from the GST rate reduction?
Essential construction materials such as marble and granite, along with air conditioning, are also expected to benefit from the GST rate reduction.
What is the real estate sector's stance on ensuring the benefits reach consumers?
The real estate sector is hopeful that the cement industry will pass on the benefits to the real estate sector, ensuring that the ultimate benefit reaches customers in the form of reduced housing costs.
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