GST cut, RERA have made realty buyer’s market, will come into effect from Apr 1
The government has made buying homes easier by slashing the Goods and Services Tax (GST) tax on under-construction properties. Rates have been cut from 8% to 1% for affordable homes and from 12% to 5% for regular units. Moreover, the size of what constitutes an affordable home has been too been revised. A 60 sq. mt unit in a metro and 90 sq. mt home in a non-metro, valued at up to Rs 45 lakh, will now fall under affordable housing. Reduced GST tax rates will come into effect from 1 April, so wait for a month before you buy realty.
The government, however, has also eliminated input tax credit (ITC) benefit to builders, which the builders were required to pass on to buyers. Elimination of ITC could impact the base prices of properties. “In the affordable segment, sellers may marginally increase the product prices to partially compensate for their loss due to loss of input tax credit,” says Shveta Jain, Managing Director, Residential Services, Savills India. Prices could rise in the mid-range and luxury projects.