Latest GST reduction of the Government of INDIA and Home Loans are now without GST

On September 22, 2025, major relief for homebuyers, as the Government of India has announced significant changes in the Goods and Services Tax (GST) regime. This practice will be effective by September 22, 2025, home loans will now be exempted from GST, bringing much clarity and affordability to borrowers. The announcement comes as per the government’s strategy to make housing much more efficient and accessible in the real estate sector.

What is new in GST for Home Loans?

Previously, GST was levied at 18% on the processing fees and additional costs, and supplementary related charges in home loans, while principal and interest remained exempted. With the new GST changes, home loan borrowers will no longer pay GST on these charges, eliminating additional costs such as processing, legal, and foreclosure fees.

GST Benefits for Home Buyers

This new GST 2.0 is expected to ripple across the real estate market:

• Lower Borrowing Cost: the revised GST relief for homebuyers, which includes reduced upfront fees and improved affordability.
• Boost the Market: A strategic move towards strengthening the scheme, like PMAY (Pradhan Mantri Awas Yojna), where a government subsidy provides relief.
• Encouragement for first-time buyers: reducing the transactional cost directly translates into savings on the processing, legal, and foreclosure charges.
• Positive Real Estate Outlook: With little tax burden, the residential projects are expected to rise, especially in the urban market.

GST Charges in Real Estate: A wider Impact

The real estate sector has a long demand for tax rationalisation to encourage both developers and homebuyers. As per the new GST regime, under construction property continues to attract 5% GST (without ITC), and the affordability increases to 1% the housing loan GST exemption is being hailed as a landmark move.

Industry experts confirm that this reform will:

• Improve transparency in home financing.
• Strengthen demand in metro cities like Kolkata, Mumbai, and Bengaluru.
• Encourage real estate companies to design more buyer-friendly offerings.

What it Means for Homebuyers in Kolkata

As a prospective buyer in Kolkata, this particular significance of the city’s residential market has witnessed steady demand from real estate companies in Kolkata, such as Sugam Homes, which delivers quality and affordable housing projects.

Wrapping Up

This government announcement brings a wave of optimism for the housing sector. With the housing loan GST exemption, homebuyers can focus on investing in a suitable property without the stress of an extra tax burden.

At Sugam Homes, a trusted real estate company in Kolkata, we welcome this good news and realise the dream of homeownership for every citizen of the country. With our thoughtful designs, projects are more affordable and efficient. Sugam Homes continues to update every news related to real estate and supports the vision of ”Housing for All.”