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The 56th GST Council meeting has announced sweeping reforms for the housing sector, slashing tax rates on construction materials in a move that could lower home prices and drive demand ahead of the festive season.
The decision reduces GST on cement from 28 percent to 18 percent and on granite blocks from 12 percent to 5 percent. Other construction inputs, such as paints, tiles, and electricals have also seen rates fall from 28 percent to 18 percent.
Together, these cuts are expected to ease input costs for developers, improve project viability, and accelerate housing delivery, particularly in the affordable and mid-income segments.
Relief for Developers and Buyers
For developers, the reform comes at a crucial time. Housing sales traditionally surge during the festive season, and the GST cuts are likely to provide relief after two years of price escalation.
Lower taxation is expected to reduce construction costs significantly, give developers more flexibility in pricing, and enable them to transfer part of the savings to consumers while maintaining viability.
Several reports mention industry analysts believing that the move will also speed up the completion of stalled or delayed projects and give a fresh push to the government’s vision of expanding homeownership across income groups.
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Odisha Housing Market to Benefit
In Odisha, the impact is expected to be particularly significant. Rising demand in major cities such as Bhubaneswar, Cuttack, Rourkela, Puri, and Berhampur has faced cost pressures due to high input taxes.
With the new GST rates in place, the average price of apartments in Bhubaneswar, currently around Rs 5,500 per square foot, could decline by as much as Rs 500, according to observations made by The Times of India.
Similar reductions are anticipated across other urban centres, with overall construction costs projected to fall by 3 to 5 percent. This easing of input costs is likely to bring renewed affordability for prospective buyers and allow developers to expand projects targeted at the mid-income and affordable housing segments.
Wider Economic Ripple Effect
The wider economic effects are expected to extend beyond real estate. Lower input costs in construction will have a multiplier effect on allied industries, including steel, logistics, and fittings, while also supporting faster rollout of housing and infrastructure projects.
With the Reserve Bank of India expected to maintain stable interest rates, the GST reform is likely to provide a dual push by reducing purchase costs and sustaining buyer confidence.
The timing of the decision is also seen as critical. The festive season traditionally accounts for a large share of annual home sales, and with consumer sentiment already recovering, the GST cuts are expected to act as a catalyst for stronger demand.
