India’s housing market entered a recalibration phase in late 2025 after the GST Council announced sweeping tax reductions on key construction materials, a move that quietly reshaped affordability for both homebuyers and self-builders. Introduced at the peak of the festive season, the policy reduced indirect tax pressures at a time when price-sensitive demand was under strain, offering measured relief rather than dramatic price resets.
Under the revised structure, GST on cement and ready-mix concrete was lowered to 18 percent from 28 percent, while bricks, tiles, sand, and stone blocks such as marble and granite were taxed at 5 percent. Paints and varnishes were also brought down to 18 percent. Industry experts estimate that these changes trimmed construction input costs by 1-2 percent at the project level, translating into potential buyer savings of Rs 1-3 lakh on homes priced between Rs 50 lakh and Rs 1 crore. Developers, however, have largely avoided headline price cuts. Instead, the benefit has filtered through in subtler ways festive discounts, flexible payment schedules, and limited-period booking incentives. A senior housing analyst noted that passing on savings outright remains difficult for projects already under construction, given locked-in procurement contracts and financing structures. “The impact is real, but it is being absorbed strategically rather than visibly,” the analyst said.
The mid-income housing segment has emerged as the biggest beneficiary. Projects aligned with salaried buyers often supported by housing finance and government-linked schemes have seen improved deal flow as modest tax savings compound with developer incentives. Industry executives suggest that the revised GST framework has restored some balance between rising land prices and household affordability, particularly in suburban and peripheral markets. Beyond apartment buyers, the GST construction tax cuts have delivered clearer gains for households building on owned plots. Lower tax rates on cement, bricks, tiles, and stone have reduced overall construction bills by nearly 2 percent for standard homes, improving budget flexibility and allowing households to invest incrementally in energy-efficient materials or better-quality finishes. Urban planners say this could support more durable and resource-efficient housing stock over time. Looking ahead to 2026, the real test lies in new launches. As developers recalibrate pricing models under the lower tax regime, buyers are expected to gain stronger negotiating leverage, especially in competitive markets. Experts advise purchasers to seek transparent, all-inclusive pricing and focus on lifecycle affordability rather than headline discounts alone.
While the GST cuts are unlikely to trigger a housing boom, they mark a meaningful shift towards a more predictable and cost-efficient construction ecosystem one that supports inclusive urban growth without compromising long-term sustainability goals.
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