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GST 2.0 Reform to Lower Construction Costs and Boost Housing Demand: Insights from Savills India CEO

The recent announcement of GST 2.0 marks a significant reform that is poised to reshape the Indian economy—especially the real estate sector. According to Anurag Mathur, CEO of Savills India, this new structure will help streamline taxation, improve transparency, and simplify compliance for developers and stakeholders.

In a statement, Mr. Mathur noted that the revised GST slabs will directly contribute to cost efficiencies in construction. Key changes include:

• Cement and ready-mix concrete now taxed at 18%, down from 28%
• Bricks, tiles, and sand reduced to 5%, from 18%
• Paints and varnishes also brought down to 18% from 28%

These revisions are expected to reduce the GST burden by approximately 20% across various segments including residential, commercial, industrial, and warehousing. This cost advantage is likely to be passed on to homebuyers—especially in mid-segment and affordable housing—thereby improving overall affordability and encouraging homeownership.

Furthermore, with the festive season approaching, the timing of this reform is strategic, and likely to drive housing sales momentum in urban and semi-urban markets.

Mr. Mathur adds, “The GST reform will not only reduce project costs but also uplift buyer sentiment. Overall, this move is expected to boost economic activity, attract investment, and reinforce India’s standing as a business-friendly destination.”