GST cuts won’t make your dream home cheaper: Wealth advisor reveals the hidden math

AhmadJunaidBlogAugust 22, 2025376 Views

The government’s proposed GST reform is being hailed as a relief for homebuyers, but according to Dime founder Chandralekha MR, the biggest winners may not be buyers at all—it’s the developers. Writing on LinkedIn, she warned that while cement and construction material taxes are set to drop, under-construction property buyers may see little to no benefit.

“Your dream home will get cheaper at least that’s what everyone thinks,” Chandralekha wrote. “But the complete tax picture reveals persistent challenges for homebuyers.”

The reforms propose a shift to two main slabs—5% and 18%. Cement, currently taxed at 28%, will move to 18%, reducing costs by ₹2–3 lakh per apartment. But Chandralekha cautions that buyers won’t see the benefit because under-construction properties don’t qualify for Input Tax Credit (ITC). That means developers enjoy the savings, while buyers are left paying full prices unless builders voluntarily pass them on.

She also highlighted hidden costs that blunt the impact of GST cuts:

Stamp duty remains 6–8% of property value.
Registration charges are unchanged.
Luxury fittings may face GST as high as 40%.

In her example, a ₹1 crore apartment may appear ₹20 lakh cheaper on paper, but after accounting for duties and charges, the buyer actually pays about ₹50,000 more.

“The math becomes brutal when you realize 5% GST sounds great until stamp duty adds another 8% to your purchase,” she noted, adding that developers are “secretly celebrating while buyers think they’re getting a deal.”

She said most construction materials under the 28% slab are expected to move to 18%, citing reports. However, without contractual safeguards, nothing compels developers to pass on these savings.

Her advice to prospective buyers: