The Group of Ministers (GoM) on GST rationalisation has cleared the Centre's proposal to simplify India's GST structure into just two slabs: 5% and 18%, eliminating the existing 12% and 28% rates.
The decision, which forms part of the government's broader GST reform roadmap announced on August 15, aims to reduce tax complexities, streamline compliance, and support long-term economic growth.

Impact on the Real Estate Sector
Industry experts believe the reform could have a transformative effect on the housing market by improving pricing efficiency, transparency and buyer sentiment.
- One leading real estate analyst called it a "game-changing step", noting that a simplified tax regime can enhance affordability and encourage faster decision-making by buyers.
- Developers will continue to pay 18% GST on contract services, but lower input tax costs are expected to ease project expenses.
- Improved liquidity, streamlined compliance, and investor confidence are seen as natural outcomes of this structural reform.
"By reducing project costs and enhancing affordability, the two-slab system will likely unlock pent-up demand and improve housing sales momentum," said a senior industry consultant.
What It Means for Homebuyers
The revised GST framework could translate into direct savings for property buyers. Projects previously taxed at 12% may now fall under the 5% slab, potentially reducing the overall purchase cost by several percentage points, depending on the project size and location.
This shift is expected to particularly benefit first-time homebuyers and middle-income families, making housing inventory more accessible and improving market liquidity.
Tax experts also emphasised that the reform will bring regulatory clarity under RERA (Real Estate Regulation and Development Act), helping developers, lenders, and buyers operate in a more transparent ecosystem.
Broader Market Outlook
With the government targeting structural reforms across indirect taxation, analysts believe the simplified GST structure could boost demand in both residential and commercial real estate, strengthen investor sentiment, and accelerate inventory clearance.
The reform, if implemented effectively, is expected to act as a catalyst for the real estate sector, fostering affordability, transparency and long-term growth.