GST ON REAL ESTATE – What it has to offer

GST on real estate has been the talk of the century and with the recent advancements in technology, and due to the elevation in the standards of living, in the recent times owning a home has become a dream for every citizen.

Thanks to the changes that have been bought by the GST council in the 33rd GST council meeting held on 24th February 2019 subjecting to Real Estate, with regards to managing the taxes that were exempted to give an affordable housing policy to all. It is also bought to the notice of reducing taxes in all the materials used for construction.

According to Arun Jaitley, the finance minister, “The move will provide a boost to the real estate sector. The sector is burdened with a huge inventory. The cuts would make owning a home cheaper for the common man. In both cases, builders will not be able to claim the input tax credit (ITC) which they used to get when the tax slabs of 8 per cent and 12 per cent were applicable.”


In the 33rd GST council meeting, points of discussion were:

  1. GST for Under Construction projects is reduced to 5% from 8%.

For the buildings that are halfway in its construction or those that have just begun its construction, the taxes have come down to 5% from its earlier number of 8%.

  1. GST for Affordable housing is reduced to 1% from 8%.

If the area of the house is less than 90 sq.m in non-metropolitan cities and less than 60 sq.m in metropolitan cities,and the property value is less than 45 Lakhs, then the whole scene is an agenda of Affordable housing. From its earlier tax of 8%, the numbers have come down to an incredible value of 1%.

  1. Immediate Tax on development rights such as TDR, FSI, JDA, Lease are to be exempted from residential properties where GST is payable.

TDR is a Transfer of Development rights and they are generally calculated in a building for an owner if they want to expand the super built up area of the building in the future. FSI is Floor Space index which is a very important factor to be considered while calculating the taxes of the property. It is the ratio between the super built up area and the total land.

JDA is Joint Develoment Agreement that is an understanding between the real estate developer and the land owner to create and develop the land from its present state.

The good news is that all these acronyms are tax exempted making way for the growth and development of the property.

  1. About 80% procurement of materials must be from a registered dealer.

  2. 15% of a commercial building will be treated residential for GST.

 DISCUSSIONS on Realestate GST


GST on Construction Material

Construction of a home means getting all the necessary construction materials at affordable prices. Fortunately, the GST council has reduced the rates of the such fundamental elements.


18 %

Cement, Marble, Granite

28 %

Marble Granite Blocks, Sand Lime bricks and Fly Ash bricks

12 %

Natural sand, pebbles, gravel, blue metal

5 %


28 %

Since all the major construction materials are imposed tax, the annihilation is done accordingly so as to balance the financial and real estate sector of the country.



Tenants will be charged GST only if their annual rent value reaches 20 Lakhs. Any value less than 20 Lakhs as the rent, the tenant is not to be levied tax.

The tenants can now breathe with this relaxation in the range from 10 Lakhs earlier to 20 Lakhs now.


Though the upscale of the implementation of GST has favored few and not favored the other few sections of the society, we truly feel it is an outstanding approach to give an opportunity for every citizen to make a home for themselves at taxes that are gravel sized.


The whole idea of affordable housing is to create room to give everyone a home by 2020. This will very much be validated soon as the GST council has favored the people in an intention to aid them build a home for themselves.

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