Buying or building a home is one of the biggest financial decisions for any family. With GST 2.0 coming into effect from 22 September 2025, the cost of construction is set to change. Many building materials are now taxed at lower rates, which could reduce overall project expenses. In this blog, we’ll explain the new GST reforms in simple terms, compare before vs after, and see how it affects homebuyers and developers.

 

What is GST 2.0 & Why It Matters

GST 2.0 is the government’s updated tax framework designed to simplify slabs, ease compliance, and reduce the burden on essential sectors like housing.

Key changes under GST 2.0 for real estate and construction:

  • Cement: reduced from 28% → 18%

  • Tiles, paints, coatings: reduced from 28% → 18%

  • Bricks, sand, raw stone & marble: now 5% (earlier 12–18%)

  • Steel & iron products: remain at 18% (no change)

  • Overall, fewer tax slabs: most goods now fall under 5% or 18%, while luxury/sin goods move to a higher 40% bracket.

These reforms are expected to bring down the cost of building homes and improve affordability.

 

GST 2.0: Before vs After

Material / Category

Old GST Rate

New GST Rate (GST 2.0)

Impact for Homebuyers & Developers

Cement

28%

18%

Big relief – savings in thousands on large projects.

Tiles & Ceramics

28%

18%

Flooring, wall tiles, and interiors become more affordable.

Bricks / Sand / Raw Stone

12–18%

5%

Core construction materials see a major cost drop.

Steel / Iron Products

18%

18%

No change – still a significant part of construction cost.

Paints & Coatings

28%

18%

Finishing and interiors cost less, boosting affordability.

Ready-to-Move Homes

Exempt

Exempt

No GST – continues to be the most tax-friendly option.

Under-Construction Homes

12% (general) / 8% (affordable)

5% (general) / 1% (affordable)

Direct savings for buyers booking under-construction properties.



What It Means for Homebuyers

  • Lower project costs: If developers pass on the benefit, homebuyers could see reduced apartment prices.

  • Better affordability: Affordable and mid-segment housing may get a direct boost due to cheaper materials.

  • Greater transparency: A simplified GST system makes it easier for buyers to understand how taxes are included in property costs.

  • Ready-to-move homes: Still exempt from GST, so no change there.

What It Means for Developers

  • Reduced material costs improve margins and make projects more financially viable.

  • Inventory impact: Builders need to clear stocks purchased under old GST rates before benefits fully show.

  • Marketing advantage: Projects highlighting “GST-inclusive pricing” or “post-GST 2.0 savings” can attract more buyers.

Challenges to Keep in Mind

  • Material savings may only reduce overall construction cost by 3–5%, not a huge drop in total home prices.

  • Land costs, labor charges, registration fees, and stamp duty remain unchanged.

  • Whether buyers actually benefit depends on developers passing on the savings transparently.

Buyer Tips in 2025

  1. Ask builders for detailed cost breakdowns to check if GST benefits are passed on.

  2. Compare pre- and post-September 2025 project prices.

  3. Prefer projects launched after GST 2.0 came into effect.

  4. Remember: GST is only part of the cost—location, quality, and delivery still matter most.



Conclusion

GST 2.0 is a welcome change for the real estate sector. By cutting down taxes on essential building materials like cement, tiles, and bricks, it reduces construction costs and creates hope for more affordable housing. However, the real impact depends on transparency in pricing and whether developers pass on these benefits.

At JKB Housing, we are committed to honest pricing, on-time delivery, and creating homes that reflect the best value for buyers—now strengthened by GST 2.0 reforms.