Experts note the proposed changes aim for simpler rules. Developers expect tax breaks from this move. Homebuyers should see lower home prices too.
The government plans a two-tier GST system. It would have just 5% and 18% rates. Real estate experts think this tax simplification will cut developer costs. Buyers will also benefit from these changes.
Anshuman Magazine, a CBRE executive, stated the construction sector wanted lower GST rates. He believes simplification and reduction would positively impact costs. Cement, a key material, would see cost relief.
Magazine mentioned tax cuts could help commercial property. This comes as export tariffs make investors hesitant. They worry about investing in new warehouses or factories.
Global trade policy worries have slowed decisions. Many businesses delay large investments. They wait for clearer trade rules.
Magazine added that reducing construction taxes could help. It offers a buffer against market swings. This supports ongoing sector growth.
Currently, real estate faces varied GST rates. Cement is taxed at 28%. Steel and tiles face 18%. Paint also has an 18% rate. These input costs directly influence project expenses and home prices.
Prime Minister Modi announced GST reforms earlier. He promised lower tax rates by Diwali. This was part of next-generation reforms.
What this means for buyers.
Pradeep Aggarwal of Signature Global sees benefits for housing. A two-slab system aids GST compliance for builders. It also cuts input costs. This improves cash flow. Home prices should drop for buyers.
Aggarwal believes tax clarity helps planning. The sector can build with more confidence. This better meets buyer needs. He expects reforms to boost confidence. Sustained housing market growth is likely.
Subhashendra Kumar, CFO at Trehan Iris, agreed. Tax changes should lower overall project costs. Builders can then offer better prices to buyers.
Aman Sharma of Aarize Group also commented. Lowering taxes on building materials helps. Simpler rules make things easier. This should lead to more affordable homes.