By Arosh John | Real Estate Consultant & Founder – John Real Estate, Thane Real Estate News
A Reform Packaged as a Diwali Gift
On 3rd September 2025, in the 56th GST Council meeting chaired by Finance Minister Nirmala Sitharaman, the Government of India officially approved the Next Gen GST Reform.
The structure has been simplified — two main slabs, 5% and 18% — with a new 40% slab for luxury and sin goods. The earlier 12% and 28% brackets have been scrapped.
The Government confirmed that the revised rates will be effective from 22nd September 2025. One of the most awaited changes has also been delivered: GST on cement has been reduced from 28% to 18%.
Why This Matters to Real Estate
Cement usually makes up 10–12% of construction costs, and the earlier 28% slab was a heavy burden. With GST now at 18%, the overall saving works out to about 1% of a project’s cost.
It may sound minor, but in a sector where margins are thin and buyer sentiment is sensitive, this relief matters. Developers get breathing space, and in competitive markets, they may pass part of this on to buyers.
Segment-by-Segment Impact
- Affordable Housing (up to ₹45 lakh): Stays at 1% GST. No change here, except input relief may support new launches.
- Mid-Segment Homes: Likely to gain the most. A 2–3% effective saving could show up in pricing or festive offers.
- Luxury Housing: More complex. Interiors and premium fittings may now attract the 40% slab, pushing developers toward offering more core-and-shell units.
Beyond the Numbers
In my view, the cement reduction is more than just arithmetic. It is a sentiment driver. Buyers hear “construction costs are down” and it nudges confidence, even if the flat price itself doesn’t fall drastically.
For developers, it provides a reason to push festive launches. For infrastructure and public housing, where cement volumes are massive, this is meaningful relief and may even speed up execution.
But Let’s Be Clear
The biggest affordability barriers remain untouched:
- Stamp duty and registration charges are state-level and not under GST.
- Development premiums and approvals in metros like Mumbai and Thane still form 20–30% of project costs.
So while this GST reform is positive, it will not drastically reduce property prices in metros.
Editor’s Take
The Next Gen GST Reform 2025 is the most important GST change since 2017. For real estate, it is a confidence booster, not a reset button.
- Developers gain modest cost relief and a stronger marketing pitch.
- Mid-segment buyers may find just enough savings to make a decision.
- Affordable housing is unchanged.
- Luxury housing must adapt to higher costs on interiors.
Overall, this reform is timely and helpful. It strengthens sentiment, supports new launches, and gives the market momentum heading into the festive season. But the real affordability story still depends on state-level charges and land costs, which lie outside GST.
About the Editor
Arosh John is a Thane-based real estate consultant with over 10 years of experience advising buyers, NRIs, and investors. As Founder of John Real Estate and Thane Real Estate News, he provides fact-checked insights, project reviews, and market analysis to help buyers and investors make informed decisions.
Disclaimer
This article is based on the official decisions of the GST Council’s 56th meeting (3rd Sept 2025), chaired by Finance Minister Nirmala Sitharaman, as confirmed by the Government of India. The revised rates, including the reduction of cement GST from 28% to 18%, will be effective from 22nd Sept 2025. This content is for informational purposes only. Buyers and developers should consult CBIC circulars and professional advisors for transaction-specific guidance.
