Will Buying a Home Get More Affordable with GST Rate Cuts Starting Navratri 2025?

Buying a home is one of the biggest financial decisions in India, and even small changes in policy or tax rates can make a big difference to buyers. This Navratri 2025, homebuyers have a new reason to cheer. From September 22, the first day of Navratri, the government has rolled out GST 2.0, a simplified and more affordable tax system for construction materials. Prime Minister Narendra Modi called it a “GST bachat utsav”, promising lower costs for developers and more affordable homes for buyers.

But will this reform immediately reduce housing prices? Or will the benefits take time to reach end-users? Let’s dive into the details.

What Changed Under GST 2.0?

Until now, India’s Goods and Services Tax (GST) had four slabs: 5%, 12%, 18%, and 28%, along with a compensation cess on luxury and sin goods. This often created confusion and kept the tax burden high for essential building materials such as cement and paints.

Under GST 2.0, the structure has been simplified into two main tiers 5% and 18% while ultra-luxury items face a 40% levy. For the real estate and construction sector, the biggest relief comes from tax cuts on core materials:

• Cement: Reduced from 28% → 18%
• Ready-mix concrete: Reduced from 28% → 18%
• Bricks, tiles, and sand: Reduced from 18% → 5%
• Paints and varnishes: Reduced from 28% → 18%

These changes are expected to bring down overall construction costs by 3–5% across the country. For a sector where material costs account for nearly 60% of project expenses, this is a significant reform.

Also Read: GST Rate Cuts: Is Building on Your Own Plot Cheaper Than a Gated Apartment?

Impact on Developers

Developers are among the biggest beneficiaries of GST 2.0. A reduction in cement GST alone is projected to lower costs by ₹1,000 per square meter of construction. This saving can make projects more financially viable and help developers price homes more competitively.

Industry bodies such as NAREDCO and CREDAI have already welcomed the reform. According to them, reduced GST rates will not only bring down input costs but also restore customer confidence at a time when demand is picking up.

For developers, especially those working on affordable and mid-segment housing, the reform is a game-changer. Lower tax burdens give them greater flexibility to offer festive discounts, customise payment plans, and launch new projects at more attractive price points.

Impact on Homebuyers

The big question remains what does this mean for homebuyers?

Experts estimate that the 3–5% reduction in construction costs may translate into a 1–1.5% fall in home prices. While this may sound modest, the savings add up significantly for mid-income buyers. A 2–3% reduction could mean ₹1–3 lakh in savings on a typical apartment purchase.

This is particularly important for first-time buyers, who often struggle with high upfront costs and large loan requirements. By lowering entry barriers, GST 2.0 or GST bachat utsav could make homeownership more attainable.

Affordable and mid-segment housing will see the maximum benefit, since material costs form a higher proportion of the overall project budget compared to luxury housing. Coupled with festive season offers, flexible payment schemes, and reduced loan rates, buyers in this segment may finally find themselves in a sweet spot.

Will Prices Drop Immediately?

While the reform has created positive sentiment, industry experts caution against expecting instant price cuts.

For ongoing projects, most developers have already purchased and stockpiled key materials like cement and steel at older GST rates. In these cases, buyers are more likely to see festive discounts or special schemes rather than a direct cut in base prices.

However, for new project launches, the benefits of GST 2.0 will begin to reflect more directly. As fresh procurement cycles start under the new tax structure, developers will enjoy cost savings that can be passed on to buyers. Over the next few quarters, homebuyers may see more competitive pricing in the market, particularly for newly launched projects.

In short: Immediate price drops are unlikely, but the benefits will gradually flow through the system.

Industry Voices

Industry leaders have strongly endorsed the move:

• G Hari Babu, National President of NAREDCO: He called GST 2.0 a progressive step, estimating that project costs could be reduced significantly if the cement industry passes on the benefits. If not, he hinted at possible legal steps or government intervention.
• CREDAI: Representing over 13,000 developers nationwide, CREDAI believes GST rationalisation will increase consumer confidence, boost affordability, and fuel housing demand during the festive season.
• Anurag Mathur, CEO, Savills India: He highlighted that GST 2.0, when combined with repo rate cuts and tax incentives from Budget 2025, will provide a huge boost to the housing sector. He expects affordable and mid-segment housing to benefit most, creating momentum across both residential and commercial real estate.

These voices underline the consensus that GST 2.0 or GST Bachat Utsav is a structural positive for the real estate market.

Wider Economic Impact

The benefits of GST 2.0 are not limited to homebuyers and developers. The entire economy stands to gain.

1. Higher Purchasing Power: Lower construction costs mean developers can price homes more affordably, boosting demand.
2. Commercial and Industrial Growth: Warehousing, retail, and office sectors will also benefit as project costs reduce.
3. Job Creation: A more active construction sector translates into employment opportunities across skilled and unskilled categories.
4. Multiplier Effect: With housing contributing heavily to GDP, a positive cycle of growth, demand, and investment is expected.

By making construction cheaper and housing more affordable, GST 2.0 provides a much-needed stimulus to the broader economy.

Also Read: GST 2.0: Will Lower Construction Taxes Make Apartments More Affordable This Festive Season?

Outlook for Festive Season & Beyond

The timing of GST 2.0 is strategic it coincides with the festive season, traditionally a peak period for property transactions. With GST bachat utsav in play, developers are expected to roll out attractive offers to capture renewed demand.

Over the next few months, the following trends are likely:

• Higher new launches at competitive price points.
• Increased buyer confidence leading to faster absorption of projects.
• Affordable and mid-income housing to dominate sales momentum.
• Steady recovery in commercial and warehousing projects.

In the long run, GST 2.0 will strengthen the fundamentals of the housing sector, making it more transparent, affordable, and consumer-friendly.

Conclusion

So, will buying a house get cheaper from today, the first day of Navratri 2025? The answer is yes, but gradually. While ongoing projects may not reflect instant price cuts, the real impact of GST 2.0 will be visible in new launches and upcoming festive season sales.

By simplifying the tax system and reducing GST on key building materials, the government has taken a bold step to make housing more affordable. Branded as a GST bachat utsav, this reform strengthens buyer sentiment, boosts developer confidence, and sets the stage for long-term growth in India’s real estate sector.

For homebuyers, this festive season could mark the beginning of a more affordable homeownership journey.