The Confederation of Real Estate Developers’ Associations of India (CREDAI) has pledged to pass on the benefits of the recent GST rate cuts on construction materials directly to homebuyers. The move is expected to make housing more affordable, particularly in tier-2 and tier-3 cities where construction costs account for a larger share of property prices compared to metros.
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GST Benefits and Cost Reduction for Buyers
Speaking at the 23rd edition of NATCON 2025 in Singapore, CREDAI Chairman Boman Irani emphasized that reduced GST on essential construction inputs like steel, cement, tiles, and finishing materials should help developers bring down overall costs.
- “We will pass on the benefits of GST cuts to buyers. If the property price reduces, GST liability falls, and consequently, stamp duty also decreases,” said Irani.
- However, he clarified that the extent of the reduction depends on how quickly suppliers of cement, steel, and other inputs reflect these tax cuts in their prices.
Greater Impact in Tier-2 and Tier-3 Cities
Irani pointed out that smaller cities may see a more visible impact than metros like Mumbai or Delhi.
- In metro cities, land costs dominate the property price, reducing the relative effect of construction cost cuts.
- In contrast, in tier-2 and tier-3 markets, where land is more affordable but construction costs are significant, the GST cuts could lead to a substantial dip in property prices.
Echoing this, Shekhar Patel, President of CREDAI, gave a practical example:
“If GST on cement drops by 10%, a bag costing ₹350 could fall by about ₹30. We now need to monitor how this reduction translates into actual construction savings.”
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Stamp Duty Still a Challenge
While GST cuts are welcome, CREDAI flagged high stamp duty charges as an area that still burdens homebuyers. Since stamp duty falls under state government jurisdiction, developers cannot control it.
“Even if GST and construction costs are rationalised, stamp duty remains a big pain point for buyers and needs urgent attention from state authorities,” Irani added.
Real Estate as a Hedge Against Inflation
Irani also highlighted the long-term wealth-building potential of real estate.
- “If you buy a home today for ₹40 lakh, with natural inflation of 7–10% annually, its value will rise proportionately over time,” he explained.
- He called real estate the “only true hedge against inflation,” stressing that unlike idle money, property not only preserves value but compounds wealth over years.
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Optimism Among Buyers
According to Patel, the GST announcements have already lifted market sentiment.
- “We’ve seen a surge in buyer inquiries, especially in the mid-segment housing range of ₹1–4 crore,” he said.
- He added that homebuyers now feel reassured that the government and developers are working together to make homes more affordable.
The Road Ahead
CREDAI is still evaluating the full impact of the GST cuts and expects clearer insights by the end of the month. While much depends on material suppliers and state policies around stamp duty, the industry body reiterated its commitment to transferring maximum benefits to buyers.
