Will Buying a House Get Cheaper with GST Rate Cuts Taking Effect on Navratri 2025?
The GST Council’s decision to cut tax rates on key construction materials like cement, granite, and marble is expected to lower project costs for developers and provide some relief to homebuyers from September 22, 2025.
Gst CutsConstruction CostsHome PricesReal EstateNavratriReal EstateSep 22, 2025
The reforms take effect from Monday, September 22, the first day of Navaratri, a move Prime Minister Narendra Modi described as a ‘GST bachat utsav’ in his address to the nation on September 21.
The revised tax structure now has two main tiers, with most goods and services taxed at 5% or 18%, while ultra-luxury items face a 40% levy. Previously, GST was applied in four slabs: 5%, 12%, 18%, and 28%, with an additional compensation cess on luxury and sin goods. 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%). A cut on the key construction materials, such as cement, is expected to reduce overall construction costs by 3-5% in the country, say real estate experts.
With GST on key materials like cement dropping from 28% to 18%, construction costs are expected to fall by 3-5%, potentially reducing home prices by 1-1.5% for buyers. This is likely to make homeownership more attainable, especially in affordable and mid-segment housing, say real estate experts. Developers will benefit from reduced GST on essential construction materials, leading to significant cost savings.
G Hari Babu, national president of NAREDCO, said that the GST reforms will bring significant benefits to the real estate sector. It is estimated that construction costs will reduce by around ₹1000 per square meter. 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.
The government’s decision to reduce GST on cement is a very welcome and progressive step. 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, he said. Babu said that 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. But if 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, he said.
The government's decision to cut GST rates on various products will increase purchasing power of consumers and boost demand for residential properties in the upcoming festive season, according to realtors' body CREDAI. The association, which has 13,000 members from across India, said the construction cost is expected to come down because of the reduction in GST rates on cement and few other building materials. It said at the recently concluded Natcon in Singapore that the benefit of GST rationalisation would be passed on to customers, provided cement companies and other manufacturers of building materials bring down their rates.
CREDAI chairman Boman Irani had said, 'GST rationalisation has generated a feel good factor among people. There is a positive sentiment among consumers, which is a good sign ahead of festival season'.
CREDAI president Shekhar Patel said the reduction in GST rates, coupled with tax incentives in Budget 2025 and reduction in repo rates by the RBI, would give a huge filip to housing demand. 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.
That said, if you’re looking to buy an apartment this festive season, don’t expect instant price drops, especially in ongoing projects that are already in advanced stages of construction and have completed most 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, experts said.
Frequently Asked Questions
When do the GST rate cuts take effect?
The GST rate cuts take effect from Monday, September 22, 2025.
How much will construction costs be reduced by the GST cuts?
Construction costs are expected to be reduced by approximately 3% to 5% for developers.
Will home prices be affected by the GST cuts?
Home prices are expected to be reduced by 1% to 1.5% for buyers, depending on the project stage.
Which materials are affected by the GST cuts?
Key construction materials such as cement, granite, marble, bricks, tiles, sand, paints, and varnishes are affected by the GST cuts.
Will ongoing projects see immediate price reductions?
Ongoing projects that are already in advanced stages of construction and have completed most material procurement are less likely to see immediate price reductions. Developers may offer festive discounts, flexible payment plans, or customised deals instead.
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