Real estate sector is one of the most significant sectors of the Indian economy. Earlier, there were several taxes applicable including service tax and VAT. With the emergence of Goods & Service Tax (GST) indirect taxation in the real estate industry has seen a complete transformation.
GST’s significance for the homebuyer
The purpose of GST is to introduce tax neutrality. Before GST came, there were several real estate concepts like service tax, VAT, stamp duty etc. They were levied and calculated differently in every state. GST seems to have put an end to all these difficult taxes and has introduced a standard taxation for every state. Thus, the buyers don’t have to worry about complicated property registration.
Affordable housing for everyone
The government’s vision to offer housing for all by 2022 is driving the affordable housing segment with incentives pertaining to tax. Besides, GST exemption given for affordable housing projects has paved the way for more affordability. This acts as a benefit to the lower and middle income groups.
Observe and buy
Because of GST, buyers have the chance of observing the property prices and then take a call on buying. The reduced GST has a major role in motivating the under construction and affordable projects.
The emergence of GST will be advantageous to the NRI community that wishes to invest in real estate inside the country. A comprehensive concept like GST that gives no worries regarding multiple taxation and indirect taxes will definitely have a positive impact. Though the buyers have to pay a bit more when the standard GST rate is high, they can be happy regarding the less complicated taxation structure.
GST was hyped as a highly beneficial aspect for the real estate sector. This can be the right time to invest in a property; prices have come down in the past few years. There can be extra taxes imposed by the state government; however, there is still relief for homebuyers because the total prices for residential properties will be low.
In the long run, the Indian real estate segment will gain from the GST introduction. The affordable housing segment, which comprises the maximum population of buyers in India, will be especially benefitted. That said, according to the welcome given by the homebuyers for GST, it can be considered a boon or a bane. The homebuyers can have a firm grasp of this tax structure and then act accordingly.