India Year Ender 2025 GST Cuts On Cement Marble Tiles Ease Construction Costs
India’s real estate and construction sector ended 2025 with renewed momentum after the GST Council reduced tax rates on key building materials, easing long-standing cost pressures across housing segments. Cement was brought down from 28% to 18%, while bricks, tiles and sand fell from 18% to 5%. Marble and granite blocks were also cut to 5%, offering relief to developers and individual homebuilders alike. While the immediate impact on headline property prices was limited, the policy reset has begun reshaping affordability calculations nationwide.
The timing of the GST cuts proved significant. Rolled out in September, the revised rates coincided with peak festive demand, enabling developers to use tax savings strategically. Instead of announcing across-the-board price reductions, many builders channelled the benefits into targeted discounts, flexible payment schedules and booking-linked incentives. Industry executives say this approach helped protect margins while stimulating buyer sentiment in a market still adjusting to higher interest rates.For urban homebuyers in the ₹50 lakh to ₹1 crore segment, which accounts for a substantial share of new housing demand, the savings were modest but meaningful. Analysts estimate that lower GST translated into developer cost reductions of around 1–2% per apartment, equivalent to ₹1–3 lakh depending on project scale and material intensity. Even such marginal relief proved influential for middle-income households weighing affordability against rising living costs.
The impact was more direct for individuals constructing homes on their own plots, particularly in Tier-2 and emerging urban centres. Cement typically accounts for about 15–16% of total construction costs, with bricks, tiles, boards and stone finishes adding another 6–7%. Reduced GST on these materials lowered upfront expenses and improved cash flow during construction. Tax experts estimate that a standard single-storey home project could now cost roughly 2% less overall purely due to revised material taxation.Beyond affordability, urban planners say the GST cuts may have broader implications for construction quality and sustainability. Lower material costs reduce the incentive to compromise on specifications, encouraging better compliance with safety norms and more efficient building practices. Over time, this could support resource-efficient construction and improve the quality of housing stock in fast-expanding urban peripheries.
Looking ahead to 2026, the real impact of the GST reform is expected to be clearer in new project launches. Developers recalibrating cost structures from the planning stage are likely to reflect the revised tax regime more transparently in pricing. For buyers, experts advise seeking all-inclusive cost disclosures and focusing on overall affordability rather than headline discounts, as lower GST rates gradually stabilise the housing market.
