Developers believe the two-tier GST will simplify things. It should cut project costs. This will make homes easier to buy. It will boost buyer confidence. CREDAI also thinks this change can restart stalled projects. It will encourage new ones.
India’s tax system is changing. The government is simplifying GST. There will only be two rates: 5% and 18%. Prime Minister Modi announced this reform. It aims to lower costs for businesses. It will also reduce tax burdens. This should help key economic sectors.
Analysts say the new GST could transform real estate. This sector has struggled with high taxes. Demand has also been slow. The current GST has four rates. These are 5%, 12%, 18%, and 28%. Construction items like cement face high taxes. Cement is taxed at 28%. Steel, paint, and wiring are at 18% or 12%.
The new plan should move most 12% items to 5%. Many 28% items will move to 18%. This lowers building costs. Builders can then offer lower prices to buyers.
Real Estate Impact
Lower building costs mean cheaper homes. Affordable housing now has a 1% tax. This will become even better. Material costs will fall. Mid-range and luxury homes are taxed at 5%. Prices might drop if builders pass on savings.
Yashank Wason of Royal Green Realty agrees. He said the new GST is good. It simplifies taxes. It lowers project costs. Homes will be more accessible. This will increase buyer interest.
CREDAI expects more supply. Stalled projects can restart. New projects can begin. This is especially true in smaller cities. Costs matter more there.
Some items will stay at 18%. This ensures quality building. It also maintains development speed. The new system shows policy stability. Builders have wanted this for a long time.
Buyers will see clearer pricing. Homes will be more affordable. The simpler tax system makes deals easier. Financial planning becomes simpler. First-time buyers benefit most. This helps the government’s housing goals. It makes starter homes more attractive.