Will have to buy a house cheaper
The government is soon making such a plan, which can make both to build and buy houses cheap. The government is currently considering making the current rates of GST easier and uniform. If this new system is applied, then it will get a direct benefit to those who are planning to buy a house.
Currently, different taxes are levied on the things used to build houses 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 reduces these tax rates equally and, then the cost of the builder will be reduced and that benefit can also reach the home buyers.
Affordable i.e. affordable houses still take only 1% GST, so there will be no big change in it. But if the ITC is applied, then the cost of the builder may decrease slightly, due to which some relief can also be found here.
In the last few years, there has been a tremendous jump in the cost of building a house. Between 2019 and 2024, construction expenses have increased by about 40%. In just 3 years, an increase of more than 27% has been seen. In such a situation, if there is a tax cut on materials like cement and steel, then both developer and buyer can get relief.
This GST improvement will not be less than any relief for the middle class which is already facing inflation. Low tax means low cost, and it will directly affect the final price of the house. This can also make the EMI burden slightly lighter.
While medium and affordable houses are expected to get relief, the new system for luxury projects may be a bit harmful. If expensive materials such as imported fittings, expansive finishing items are put into 40% tax slab, the builders will either have to increase prices, or reduce profits.
