Property prices to go down with GST rollout
Jul 12, 2017 Real Estate News
As a relief to the home buyers in India, the Ministry of Urban Development and Housing and Urban Poverty Alleviation recently declared that implementation of GST will bring down the prices of properties.
The Ministry stated that the landmark tax regime is being welcomed as a positive reform. The only people opposing it are the ones who habitually avoid paying taxes and look for ways to escape tax.
GST regime along with the recently launched Real Estate (Regulation and Development) Act (RERA) is bound to benefit the consumers in the real estate market. In addition to the tax benefits, the benefit of input credit will also be passed on to the consumers under the new law. The builders are also put under a scanner to make sure that they do not indulge in malpractices at the cost of the consumer’s interests.
In order to make these benefits accessible to the people, the centre and the state need to implement RERA in an effective manner. The Government is putting in efforts to make the laws effective. Land and Housing are State subjects and the State Governments need to be active in order for the new system to work properly.
The ministry also assured that t will work on the issue of delay in the delivery of housing projects, that is causing a lot of distress among buyers and investors.
In May this year, the GST Council had decided to levy 12 percent GST on the construction of a complex, building, civil structure or intended for sale to a buyer, wholly or partly. According to this decision, the value of the land was included in the amount on which tax was to be calculated. But recently, the GST rate for real estate has been raised to 18 percent and the cost of land has been excluded from the calculation of tax liability.
It is hoped that all these efforts put together would turn the market in the favour of the buyers and bring corrective changes in property prices.
The Ministry stated that the landmark tax regime is being welcomed as a positive reform. The only people opposing it are the ones who habitually avoid paying taxes and look for ways to escape tax.
GST regime along with the recently launched Real Estate (Regulation and Development) Act (RERA) is bound to benefit the consumers in the real estate market. In addition to the tax benefits, the benefit of input credit will also be passed on to the consumers under the new law. The builders are also put under a scanner to make sure that they do not indulge in malpractices at the cost of the consumer’s interests.
In order to make these benefits accessible to the people, the centre and the state need to implement RERA in an effective manner. The Government is putting in efforts to make the laws effective. Land and Housing are State subjects and the State Governments need to be active in order for the new system to work properly.
The ministry also assured that t will work on the issue of delay in the delivery of housing projects, that is causing a lot of distress among buyers and investors.
In May this year, the GST Council had decided to levy 12 percent GST on the construction of a complex, building, civil structure or intended for sale to a buyer, wholly or partly. According to this decision, the value of the land was included in the amount on which tax was to be calculated. But recently, the GST rate for real estate has been raised to 18 percent and the cost of land has been excluded from the calculation of tax liability.
It is hoped that all these efforts put together would turn the market in the favour of the buyers and bring corrective changes in property prices.
