Builders Welcome GST Reduction on Cement, Say it Will Reduce Costs, Benefit Homebuyers

New Delhi, September 4, 2025: The GST rate has been rationalised with a simplified two-slab structure of 5 per cent and 18 per cent.

The GST Council has also reduced the tax rate on cement from 28 per cent to 18 per cent, a decision expected to boost the real estate sector. Moreover, the rate on marble and travertine blocks, granite blocks and sand-lime bricks and stone inlay work was reduced to 5 per cent from 12 per cent.

The affordable housing sector will benefit the most as builders can pass lower construction costs to buyers.

Builders praised the decision to reduce GST on cement and other construction materials.

“We welcome the government’s decision to fulfil real estate developers’ demand to reduce GST rates on cement and other construction materials like sand and bricks,” said Manoj Gaur, CMD, Gaurs Group.

“Coming at a time when the country prepares for the festive season, it augurs well for the sector and boosts demand. Coupled with the reduction in the repo rate, it will add to the affordability of real estate purchase.”

Mohit Goel, MD, Omaxe Ltd., said, “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.”

At Omaxe, “we see it as an opportunity to accelerate our vision of creating sustainable, community-centric developments in metros and high-growth tier 2 markets such as Chandigarh, Lucknow, Indore and Bhopal. This balanced approach to taxation will not only benefit homebuyers but also strengthen the broader housing ecosystem”.

Amit Modi, Director, County Group, said, “The GST cut on cement is a direct relief for residential real estate. Cement alone makes up nearly a third of construction costs. So, this move could trim overall project expenses. For homebuyers, that translates into tangible savings of lakhs on under-construction homes.”

With the festive season underway, this announcement is perfectly timed to boost sentiment, nudging fence-sitters to commit. Beyond affordability, it also gives developers more room to maintain quality while keeping prices in check.

Sahil Agarwal, CEO, Nimbus Realty, said, “Bringing GST on cement down is a meaningful relief for residential projects, where cement is a major cost component. The cut will ease overall construction expenses and allow developers to pass benefits directly to buyers.”

For homeowners, this means substantial savings on under-construction properties while for developers, it ensures better cost control without compromising on quality. “Coming during the festive season, the move will also encourage many buyers to take the plunge.”

Gautam Kanodia, Founder, KREEVA and Kanodia Group, said, “With the new GST regime, the government has tackled one of the highest-cost inputs in construction. In real estate, since materials carry varying GST rates that directly shape project costs, reducing it on cement alone eases expenses by several percentage points. This, in turn, could soften property prices for buyers.”

Sandeep Chhillar, Founder and Chairman, Landmark Group, said, “The real estate market stands to benefit from the recent GST simplification, and the relief will surely reach buyers. Developers will certainly see healthier margins from lower input taxes. They now have greater room to maintain world-class standards at more competitive costs.”

With the festive season ahead, when the demand is at its peak, “we see this as a chance to convert tax reform into consumer confidence”.

Salil Kumar, Director, Marketing and Business management, CRC Group, said, “Reducing GST on construction materials is a reform that resonates with both domestic and global stakeholders. For developers, it lowers input costs; for buyers, it signals affordability; and for investors, it demonstrates policy stability and responsiveness.”

Commercial assets like offices, malls, and hospitality will see improved viability while residential projects become more competitive in pricing.

Sanjay Sharma, Director, SKA Group, said, “The GST rate cut on cement and construction materials is a welcome move that will ease project costs and enable developers to pass on benefits to buyers. This will strengthen homebuyers’ purchasing power, improve affordability and boost demand across housing segments, especially in the festive season.”

Rajjath Goel, MD, MRG Group, said, “The new two-slab GST will simplify compliance, lower costs for consumers and boost festive demand—helping us drive stronger sales from Diwali onwards. Rationalisation will also bring transparency, ease of doing business, and renewed confidence among homebuyers.”

This reform is a win-win for both businesses and the common man, setting the stage for sustained growth in the real estate sector.

Ashok Singh Jaunapuria, MD and CEO, SS Group, said, “The move towards a simplified two-slab GST regime can be a structural game-changer for the real estate sector. By easing tax complexities and reducing the overall burden on critical inputs, it not only makes housing more affordable for end-users but also strengthens developer confidence to launch new projects.”

On the commercial side, rationalisation lowers operational costs, which can accelerate the pace of Grade-A office, retail and hospitality developments. Importantly, this clarity will help both domestic and global investors view Indian real estate as a more transparent and resilient asset class, fuelling long-term sustainable growth.

Prateek Tiwari, MD, Prateek Group, said, “The timing of the GST cut on cement couldn’t have been more strategic. Festivals in India are associated with optimism and new beginnings, and homebuying is a natural extension of that sentiment. By reducing one of the heaviest tax burdens on construction, the government has created space for developers to sweeten deals, hold prices steady or offer more flexible plans.”

For the sector, this is not just cost relief—it’s demand acceleration. “We expect this festive season to reflect a clear surge in site visits and bookings.”

Yash Miglani, MD, Migsun Group, said that by reducing GST on construction materials, the government has provided significant relief to both homebuyers and developers.

“Cutting tax on cement and on works like tiles, bricks and stone is a visionary decision. This will lower the cost of housing projects, speed up delivery and make home buying easier for common people. At the same time, this move will also strengthen infrastructure development and create a positive environment across the real estate sector.”

Ishaan Singh, Director, AIPL, says, “The proposed two-slab GST structure can ease project costs by rationalising rates on construction materials like cement, steel or paint that heavily influence both housing and commercial projects. For homebuyers, that could mean a reduction in effective prices, especially in the first-time buyer segment.”

In commercial real estate, lower input costs improve project viability, making assets more attractive for occupiers and investors. “Developers are likely to pass relief through, boosting confidence and festive-season demand.”

Vishesh Rawat, VP, and Head of Marketing, Sales and CRM, M2K Group, said, “The reduction of GST on cement is a welcome relief for the housing sector given its substantial share in construction costs. By easing project expenses, this reform directly translates into cost savings for buyers, especially those considering under-construction properties.”

Shaurya Garg, MD, North Wind Estates, said, “The decision to rationalise GST on cement, sand, bricks and other inputs will act as a strong catalyst for the real estate industry. Lowering construction costs will encourage developers to deliver projects at more competitive prices, benefitting homebuyers directly.”

Umang Jindal, CEO, Homeland, said, “The GST reduction on cement, announced at a crucial festive juncture, is set to energise the housing market by reducing costs for developers and creating renewed optimism among buyers. By easing the tax burden on one of the most essential construction materials, affordability improves, particularly for first-time buyers and the affordable housing segment.”

With interest rates stable and sentiment already positive, this reform acts as a catalyst for fence-sitters, giving them the confidence to move forward with their homebuying decisions during this festive season.

Gurpal Singh Chawla, MD, TREVOC Group, said, “The reduction of GST rates on key construction materials is a timely and progressive decision that will benefit all stakeholders in the real estate ecosystem. This move enhances the sector’s overall competitiveness and is poised to give a strong boost to real estate growth.”

At a macro level, it aligns with the government’s push for infrastructure-led development, further strengthening demand and investor confidence across the sector.”

Vikas Dua, Founder and Director, Chintamanis, said, “Truly a Diwali gift for the Indian consumer by the GST Council. The rationalisation of GST slabs marks a progressive step for the broader economy. It is not just about real estate—it is about giving a much-needed boost to the entire ecosystem.”

When agriculture, industry, and intermediaries benefit, the overall economy strengthens, and that ripple effect inevitably supports real estate growth as well.

“While for the real estate sector, the changes may not appear transformative on a standalone basis, the reduction of GST on cement is a long-awaited and welcome relief. More importantly, the collective impact of these measures will drive greater efficiency, affordability and confidence across the economy.”

Dr. Amish Bhutani, MD, Group 108, said, “Offices and retail developments are highly capital-intensive, and this cut in material cost significantly strengthens project economics. For developers, it enables faster rollouts and sharper delivery timelines; for occupiers, it translates into higher quality premium workspaces at more competitive rentals, further stimulating demand across the segment.”

Mohit Batra, Regional Director, Realistic Realtors, said, “The decision is a positive move for both residential and commercial real estate. For homebuyers, it helps reduce costs in the mid- and affordable housing segments while for developers of offices, retail, and hospitality projects, it boosts project viability.”

This dual benefit is likely to drive stronger demand from both buyers and investors.

Saurabh Saharan, Group MD, HCBS Developments, said, “The timing couldn’t be better; it lands during the festive season when families are ready to invest in homes. By lowering one of the highest construction costs, the government has effectively increased buyers’ purchasing power.”

With developers able to hold prices steady or pass on benefits, buyers now get more value for their money. This strengthens their ability to act decisively, turning festive optimism into transactions.

Ankit Kansal, MD, 360 Realtors, said, “Cement comprises 10-15 per cent of the overall housing construction cost. Consequently, the GST reduction will decrease the input cost significantly, lowering the construction cost. This can be transferred to end-users making the housing sector more affordable. The biggest beneficiary will be the affordable homes sector while mid-income and higher-income homes will also get a buying boost.”

The revised GST cement rates can give a huge push to the growing affordable sector. Moreover, the timing is also apt as it is the festive season. “Reduced GST rates will further renew the positive sentiments in the housing industry.”

Bhupindra Singh, COO, RISE Infraventures, said, “The exciting part about the GST cut is not just the lower tax outgo, but the certainty it delivers to the real estate sector.”

In housing, reduced levies on key inputs like cement immediately narrow the gap between buyer affordability and pricing, particularly in the affordable and mid-income segments.

“On the commercial side, especially in office and retail, rationalised costs enhance project viability and improve investor confidence. Together, these shifts make both housing and commercial assets more compelling, reinforcing momentum across India’s real estate spectrum at a time when demand is already gaining strength.”

Sakshee Katiyal, Chairperson, Home & Soul, said, “The government has directly increased homebuyers’ purchasing power. Cement is a critical cost driver and this reduction allows developers to contain prices, especially for under-construction projects.”

For buyers, this gives them more room to stretch budgets or upgrade choices. In effect, the reform doesn’t just lower costs; it enhances affordability, enabling families to move from aspiration to action in their homebuying journey.

Sunil Goel, MD, Numax Realcon, and Co-founder, Omaxe Limited, said, “Reducing GST on cement is more than a financial relief—it’s a trust-building measure. Buyers often wonder if policy reforms actually reach them. By lowering one of the heaviest-taxed inputs, the government has ensured tangible benefits flow into pricing, particularly for under-construction projects.”

Udit Jain, Director, ONE Group, said, “For homebuyers, every rupee counts, and the GST cut on cement brings real relief. Lowering input taxes directly softens construction costs, which means developers have more headroom to keep entry-level housing within reach. At a time when rising prices often push buyers into delay, this step can be the trigger that converts aspiration into action.”

Ashwani Kumar, Pyramid Infratech, said, “Reducing GST on key construction materials is likely to highly benefit the real estate and infrastructure sector. It will make a substantial difference in the project cost for the developer community. Hence, enabling them to pass on the benefits to homebuyers.”

It’s a strategic reform that will enhance homebuyers’ affordability while empowering developers to deliver projects more sustainably and profitably.

Sunny Katyal, Co-founder, Investors Clinic, said, “The decision will propel real estate growth and provide momentum to infrastructural development. Moreover, the reduction in GST on most goods will also have a multiplier effect and boost economic growth, which in turn will also benefit the real estate sector.”

Harvinder Singh Sikka, Chairman, Sikka Group, said, “This decision by the government has brought relief not only to the real estate sector but to the entire construction industry. It will lower project costs and make timely delivery easier.”

Coming during the festive season, this move will strengthen homebuyers’ confidence and infuse fresh energy into the market. At the same time, faster infrastructure growth will generate more employment opportunities, directly benefiting the economy.”

Manit Sethi, Director, Excentia Infra, said, “The recent GST regime is a structural win for the real estate sector with the housing segment availing the benefits. It will make property more affordable. This would renew buyers’ interest, especially in emerging tier 2 markets, where demand for homes is quietly strengthening.”

By lowering the tax burden on key construction materials, developers will be able to pass on savings to homebuyers, creating momentum in emerging markets.

Kushagra Ansal, Director, Ansal Housing, said, “The reduction in GST rates on construction materials will infuse new energy into the entire sector. With the cost of essential materials like cement and tiles coming down, project financing and delivery will become easier.”

Homebuyers will be able to purchase houses at more affordable prices, and developers will also be able to complete projects on time. This is a step that will prove highly beneficial for both the industry and consumers.

Ajay Tyagi, CSO, Betterchoice Realtors Pvt Ltd, said, “It is a direct shot in the arm for home affordability. For under-construction homes, buyers could see lakhs in savings depending on the ticket size. At a time when affordability is being challenged by rising land and compliance costs, this step ensures developers can hold prices stable.”

It gives families confidence to take the plunge into homeownership, making the dream of a first home more achievable during this festive season.

Sankey Prasad, CMD, Colliers India and Middle East, said, “The recent GST rationalisation marks a critical step toward simplifying India’s indirect tax regime and bringing parity across sectors. For real estate, this creates a more predictable and transparent tax environment, which is essential for both homebuyers and developers.”

Lower effective rates on construction materials and allied services will help moderate cost, while clarity on ITC treatment will enhance compliance and confidence. Together, these measures are expected to stimulate demand, improve affordability and accelerate project execution—unlocking growth in housing and commercial real estate, and supporting the government’s vision of broad-based, sustainable urban development.

Anurag Mathur, CEO, Savills India, said, “GST 2.0 is a pivotal reform aimed at streamlining tax structures and enhancing transparency, thereby providing a strategic boost for the economy. For the real estate sector, it promises improved input credit flows and reduced compliance complexities, potentially lowering project costs and boosting homebuyer sentiment.”

Cement and ready-mix concrete now come under 18 per cent GST (down from 28 per cent). Bricks, tiles, and sand have fallen sharply to 5 per cent from 18 per cent, and paints and varnishes are now at 18 per cent (down from 28 per cent).

“These changes will bring down overall construction costs going forward as it will result in a reduction of GST burden by about 20 per cent 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. On a broader scale, the GST reform is expected to stimulate economic activity, strengthen investor confidence, and reinforce India’s position as a business-friendly destination.

“We wholeheartedly welcome the GST Council’s move on rate rationalisation ahead of the festive season. The housing sector, particularly, stands to benefit from GST reduction on input materials like cement as this will ultimately reduce home prices for consumers and create sustainable demand across segments,” said Pradeep Aggarwal, founder and Chairman, Signature Global (India) Ltd.

“The move to rationalise GST slabs is a crucial development that brings much-needed clarity and simplicity to the real estate taxation system. By easing the overall tax burden on housing, it is likely to boost buyer confidence and encourage quicker, more confident purchasing decisions,” said Ashish Agarwal, Director, AU Real Estate.

“For developers, having a more predictable and streamlined tax structure means fewer hurdles and smoother progress on projects. This change is set to inject new energy into the real estate sector, paving the way for steady growth and reinforcing India’s stature as a vibrant housing market.” 

Anshuman Magazine, Chairman and CEO, India, Southeast Asia, Middle East and Africa, CBRE, said, “The reduction of GST rates on cement and construction materials is a decisive step that provides much-needed relief to the real estate sector. With cement, steel, and other inputs typically accounting for nearly 40–45 per cent of total construction costs, this reduction will meaningfully lower project expenses. Developers can now pass on part of these savings to homebuyers, improving affordability and stimulating demand across segments.”

This timely reform comes as a festive season boost, creating the right conditions to spur homebuyer sentiment and drive purchase decisions. This step will also accelerate the government’s larger vision of housing growth and infrastructure-led economic development.

G Hari Babu, National President, NAREDCO, said, “The GST rationalisation is a very important step, and we welcome it wholeheartedly. It shows the government’s intent to make GST simpler and more balanced. This move brings special relief to real estate and its allied industries. Lower GST on key materials, like cement and steel, will directly reduce costs.”

Projects will become more viable and progress faster. Affordable housing will gain the most as reduced construction costs can be passed on to homebuyers. This will make homes more accessible and push forward the government’s Housing for All vision. The entire value chain of housing and infrastructure will benefit from this reform.

Niranjan Hiranandani, Chairman, Hiranandani and NAREDCO National, said, “The GST rationalisation is a festive bonanza for Indian consumers and a strategic boost for the economy. By enhancing purchasing power, stimulating consumption, and helping contain inflation, this reform creates a multiplier effect that will propel India’s GDP growth beyond 8 per cent.”

At a time of global uncertainty, such fiscal stimulation underscores the resilience of our domestic economy and strengthens confidence in India’s growth trajectory. Industry and consumers alike stand to benefit from this progressive step.

“The GST Council’s decision is a landmark step that will strengthen financial efficiency and accelerate project execution across the real estate sector. For the luxury housing space, it ensures developers can maintain uncompromising quality while optimising costs and timelines,” said Ankush Kaul, President, Sales, marketing and CRM, Central Park.