Will resale properties become costlier under the GST?
An observation has made strides in the Indian real estate market that the Goods and Services Tax (GST), is just relevant to under-development projects and subsequently, ready possession properties are absolved from the GST. Notwithstanding, the tax calculations under the new administration, for the real estate, are not all that basic.
Also, with input credit being available to developers, purchasers who buy after the Occupancy Certificate (OC) has been without a doubt won’t need to manage the extra taxes that are a piece of the arrangement in the present market.
Is it true that under construction properties will be costlier, compared to ready to move in properties?
The development of an building, civil structure, or a section thereof, expected for sale to a purchaser, completely or halfway, is liable to 12 for each penny impose with full input tax credit (ITC), subject to no refund in the event of overflow of ITC. At the end of the day, residential construction services, will welcome GST at the rate of 12 per cent, which will apply to developers pitching residential units before finishing of development to the home buyers.
Developers keep up that price competitiveness is significant, in the present market situation. The real estate sector as of now needs to manage numerous taxes, for example, service tax, VAT, excise duty, and so on. GST will apply to the materials that a developer obtains, for building a residential project. Consequently, it will directly affect the overall cost of construction. The tax burden on home buyers may increase, with four-tier GST taxation structure.
Will the GST impact the stamp duty on buying property? What about registration charges, maintenance charges etc?
Road tax, toll charge, stamp duty, electricity duty, tax gathered by panchayat/muncipality won’t get subsumed in GST.
So there would be no major or direct effect on increment or reduction of stamp duty and registration charges.
Be that as it may, you can see a roundabout effect through increment in cost of properties due expanded GST rate on works contract however than show costs.
What’s more, to note RERA Act have additionally been got passed so it might likewise prompt expanded in costs of properties at least by 10%.
What are the problems that developers are facing to register projects where regulator has been put in place?
According to me, implementation of RERA is likely to bring in transparency in the sector. RERA will protect the interest of the homebuyer and ensure timely delivery of projects.
There won’t be any issues if you have all documents in your hand.
With RERA, there will be a consolidation in the market and hence only fewer players may exist those who are genuine.