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With the central government proposing to simplify country’s GST system and keep items under only two slabs 5 percent and 18 percent, real estate experts believe that this simplicity in the tax structure will reduce the cost of developers and benefit homebuyers.
In upcoming sweeping reforms, the GST on automobiles – currently in the highest tax bracket – will be restructured to resolve classification disputes related to engine capacity and vehicle size, ultimately benefiting the common man, according to government sources.
CA Pritam Mahure and Associates has come out with an in detail study material on topic “GST and Real Estate – All provisions and Case Laws at one place” on 01.07.2025 which also happens to be ‘GST Day’.
The Uttar Pradesh GST department has issued notices to more than 500 real estate developers across cities including Lucknow, Agra, Kanpur, Aligarh, Noida, and Meerut. Authorities are demanding detailed information on the purchase of Floor Area Ratio (FAR) from development authorities dating back to July 1, 2017, due to uncertainty over whether these transactions attract the standard 18% GST.
2025 Edition Book on Demystify GST for the Real Estate Sector
Vimalendra Singh, Chief Business Officer (Residential), Mahindra Lifespace Developers Ltd said that the real estate sector is optimistic about measures to reduce construction costs and enhance affordability. “A reduction in GST on cement and allowing input tax credits for under-construction properties would drive growth. Increasing the home loan tax exemption limit would benefit middle-income buyers, especially with rising urban housing prices. Infrastructure investments remain a priority, and enhanced connectivity in smaller cities could unlock new development opportunities. These measures would strengthen the sector and support sustainable growth,” says Singh.
A Group of Ministers (GoM) meeting held in Goa on Tuesday could not reach consensus on most proposals regarding the goods and services tax (GST) for the real estate sector, sources said.
As the government gears up for the 55th GST Council meeting, likely to take place in November 2024, the council’s nominated Group of Ministers (GoM) has begun holding meetings. The GoM on “boosting the real estate sector under GST,” headed by Pramod Sawant, Chief Minister of Goa, is scheduled to meet on September 24.
The issue of tax implications of transferring leasehold land has come to the fore once again as the authorities have started to issue notices to recover dues for such a transfer. This has sparked a significant debate among industry stakeholders as it is expected to have a major impact on future transactions and the broader real estate market.
