The Goods and Services Tax Council on Sunday approved a cut in the tax charged on sales of residential properties under construction. The council announced that a tax rate of 5% as against 12% until now, BloombergQuint reported.

The new tax rate is applicable to all construction projects that do not fall under the affordable housing category. The council also decided to lower the tax rate on affordable housing projects to 1% from 8%.

Finance Minister Arun Jaitley said the move to reduce the tax rate on sales of non-affordable housing properties would give a “boom” to the real estate sector, and make housing affordable to the middle class.

Jaitley also announced that affordable housing in Bengaluru, Chennai, Kolkata, Delhi and the National Capital Region, Mumbai and Hyderabad will have a carpet area of up to 60 square metres and will cost up to Rs 45 lakh. “We expanded the definition of affordable housing so that aspiring people can buy better houses,” he said. The move will be implemented from April 1.

The finance minister said northeastern states have demanded a review of the tax on lotteries. Currently, state-run lotteries are taxed at 12%, while those run by the state’s agents are levied GST of 28%.

A group of ministers headed by Maharashtra Minister of Finance and Planning Sudhir Mungantiwar recommended that a single tax rate – 18% or 28% – be levied on all lotteries. However, council members from Punjab and Kerala were unable to attend the meeting on Sunday, Jaitley said, adding that the decision on lotteries will be taken at another meeting.