Buying a house will become cheaper due to the new GST rule, these people will benefit the most..

The government is soon making such a plan, which can make both building and buying a house cheaper. The government is currently considering making the current GST rates easier and uniform. If this new system is implemented, then it will directly benefit those who are planning to buy a house.

Currently, different taxes are levied on things used in building a house, like cement, steel, tiles, paint, etc. Cement and paint are taxed up to 28%, while things like steel are taxed at 18%. This increases the cost of the entire project, and it directly affects the price of the house. If the government makes these tax rates uniform and lower, then the builder's cost will be reduced, and that benefit can also reach the home buyers.

Impact on affordable housing

Affordable houses still attract only 1% GST, so there will be no major change in it. But if ITC is implemented, then the builder's expenses can be reduced a little more, which can provide some relief here as well.

Tax relief amid rising costs
The cost of building a house has jumped tremendously in the last few years. There has been an increase of about 40% in construction costs between 2019 and 2024. An increase of more than 27% has been seen in just 3 years. In such a situation, if there is a reduction in tax on materials like cement and steel, then both the developer and the buyer can get relief.

The middle class will get the most benefit.
For the middle class, which is already facing the brunt of inflation, this GST reform will be no less than a relief. Lower tax means lower cost, and this will have a direct impact on the final price of the house. This can also reduce the burden of EMI a little.

Luxury homes may have the opposite effect.
While medium and affordable homes are expected to get relief, the new system may be slightly harmful for luxury projects. If expensive materials like imported fittings and expensive finishing items are put in the 40% tax slab, builders will either have to increase prices or reduce profits.

Disclaimer: This content has been sourced and edited from TV9. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.