How GST Reduction Will Reshape Affordable, Mid-Segment, and Luxury Homes
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In 2025, the Indian government introduced a landmark GST reform aimed at simplifying the tax structure and reducing tax rates on construction materials. This major revision is popularly referred to as GST 2.0, which changed earlier complex multi-rate slabs into a simpler two-slab system. The 5% for merit goods including affordable housing, and 18% standard rate for non-essential goods, with luxury goods retaining a higher slab. Among the materials most impacted are cement, bricks, sand, and paint—basic ingredients of home construction. This tax cut is poised to reshape India's booming real estate market by directly lowering construction costs and encouraging affordable housing development, while also subtly influencing mid-segment and luxury home markets. This article explores the impact of GST reduction on these housing segments, providing insights for buyers, developers, and investors in 2025. Impact of GST Reduction on Affordable Housing GST Affordable housing...