GST Slabs Reduced to 5% and 18% to Boost Housing Affordability

Tax

INDIA: The central government has proposed a significant reform in the Goods and Services Tax (GST) system, reducing it to just two slabs: 5% and 18%. This move is expected to lower housing costs, benefit homebuyers, and provide relief to developers grappling with high construction expenses. Currently, the housing sector faces multiple GST rates on building materials. For instance, cement and paint are taxed at 28%, while steel, tiles, and sanitaryware attract 18%. These elevated input costs increase overall project expenses, contributing to higher housing prices.

The proposed simplified GST structure will also ease tax compliance for developers and improve cash flow, enabling better project planning. Reduced taxes on key construction materials are likely to stimulate investment in both residential and commercial real estate. For homebuyers, the reform promises improved affordability. At present, buyers of under-construction properties pay GST along with state-level stamp duty and registration charges, which together can add around 13–14% to the total property cost.

Source: Central Government