Why should Home Buyers Wait for GST Rollout for Buying a Property?
Jun 20, 2017 Real Estate News
India biggest tax reform Goods and service Tax (GST) is set to roll out in full force from July 1. Buyers are confused right now whether they should wait for GST applicability or buy the property now. Is it the good time to invest in property or not?
According to experts buyers who are looking to invest in a property should wait until July 1 and for the GST to roll out for the same. Even though the service tax will increase from 4.5 percent to 12 percent, there are some benefits that are hard to miss. All the cascading and intermediate taxes will be removed and only a single tax will be applicable on the property. Not only buyers but the developers will also be benefited by buying the launching the projects post GST. This will make the properties much cheaper and affordable for the buyers.
In most states, the value added services are not mentioned in the invoice even though the buyer pays them.
Buyer fear whether the developers will pass the tax credit benefit to the buyers or not. To tackle it the government has proposed anti- profiteering measures.
Many developers are offering pre GST discounts. The experts warn the buyers against it as it is the trick of the developers to sell their unsold inventory and clear their dues by collecting the money through the same.
Developers in Noida and Greater Noida are advising the buyers to clear all of their existing dues to save themselves from paying a service tax of 12 percent from July 1. Experts are against any such idea.
The tax credit will not be applicable to the projects that are near completion or have been completed. It is only applicable for the projects launched after July 1.
Experts and developers are divided and stand on different grounds when it comes to the application of GST. There’s still confusion regarding the different segment of the housing like affordable housing and the luxury segment. Developers and the government are working closely to tackle any issues regarding the same.
Although the stamp duty of 5-8 percent that is charged currently will continue to be charged the same under GST as well.
Developers are cheering for the unified tax regime which will replace all the other taxes the government charged them. The cost of raw materials will go up increasing the cost of construction.
According to experts buyers who are looking to invest in a property should wait until July 1 and for the GST to roll out for the same. Even though the service tax will increase from 4.5 percent to 12 percent, there are some benefits that are hard to miss. All the cascading and intermediate taxes will be removed and only a single tax will be applicable on the property. Not only buyers but the developers will also be benefited by buying the launching the projects post GST. This will make the properties much cheaper and affordable for the buyers.
In most states, the value added services are not mentioned in the invoice even though the buyer pays them.
Buyer fear whether the developers will pass the tax credit benefit to the buyers or not. To tackle it the government has proposed anti- profiteering measures.
Many developers are offering pre GST discounts. The experts warn the buyers against it as it is the trick of the developers to sell their unsold inventory and clear their dues by collecting the money through the same.
Developers in Noida and Greater Noida are advising the buyers to clear all of their existing dues to save themselves from paying a service tax of 12 percent from July 1. Experts are against any such idea.
The tax credit will not be applicable to the projects that are near completion or have been completed. It is only applicable for the projects launched after July 1.
Experts and developers are divided and stand on different grounds when it comes to the application of GST. There’s still confusion regarding the different segment of the housing like affordable housing and the luxury segment. Developers and the government are working closely to tackle any issues regarding the same.
Although the stamp duty of 5-8 percent that is charged currently will continue to be charged the same under GST as well.
Developers are cheering for the unified tax regime which will replace all the other taxes the government charged them. The cost of raw materials will go up increasing the cost of construction.
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