The Goods and Services Tax (GST) is a unified indirect tax system that was introduced in 2017 as a means to replace multiple state and central taxes in India.
In real estate, GST plays a key role, especially in the case of under-construction flats. While ready-to-move homes are exempt from GST, buyers of new or under-construction properties typically pay GST as part of the total cost.
In early September 2025, the GST Council made several important changes to this tax, simplifying it further by creating two clear slabs. With most sectors receiving a lower slab rate, this is particularly good news for potential customers looking to buy buy property in Thane.
Here we take a deeper look into what these changes may mean for the real estate industry.
GST Reforms
The Indian Government has approved a simplified two-tier tax structure with rates of 5% and 18%, to reduce cost for customers and also potentially offset an increase in prices due to rising tariffs. The new rates will be effective from 22 September 2025, and show a positive trend for real estate with lower charges on construction materials.
The move is likely to make housing more affordable thereby affecting both developers and buyers. For people aiming to purchase budget homes in Thane, this new tax structure could offer better pricing and more options.
Impact for Homebuyers
1. Lower Construction Costs
The reduction of GST rates from 28% to 18% on key material cement is expected to be a major boon. Lower costs will enable developers to build affordable housing which benefits customers looking for new construction in Thane. For someone interested in an under construction flat in Thane, this means developers might have more room to offer price discounts, launch-time schemes, or better amenities within the same cost.
2. Reduced Final Prices
With lower cost of materials top developers such as Ace Realty can build new flats in Thane at budget prices, the benefit of which may also reach the buyer. Further, they may also be able to offer price discounts, launch-time schemes, or better amenities within the same cost.
3. Transparent Pricing
With GST on materials reduced and no change in housing tax slabs, developers will be able to show clear pricing details. This reduces the risk of hidden costs for buyers while also making it easier to compare prices and benefits of budget homes in Thane to secure the best deal.
4. Increased Focus on Affordable Housing
Developers working in the affordable segment (under ₹45 lakhs) receive maximum advantages. Affordable housing refers to homes with a carpet area of up to 60 square meters in metro cities and 90 square meters in non-metro cities. Affordable housing GST is maintained at 1% (without input tax credit). For buyers looking to purchase a 1 BHK under 50 lakhs in Thane, this is great news.
Conclusion
For anyone looking to buy property in Thane, the recent GST rate changes offer an opportunity for lower final prices with the same amenities. Here, even though the GST slab on homes has not changed, the reduced tax on essential raw materials can offer a huge cost relief to developers, and consequently buyers.
