I have a bungalow for sale in Pali Hill Bandra on a 300 meter plot.
3900 sq feet +1000 sq feet garden+ 300 sq feet backyard space+ 1200 sq feet terrace
Ground plus 2 levels
2017 has been revolutionary for the real estate industry as there have been several regulatory changes and practices that have been implemented with the only purpose of making it an organized sector. First, it was the roll out of the Real Estate Regulatory Act (RERA), now another development that has taken place is the recent introduction of the Goods and Services Tax (GST).
GST has increased the total incidence of tax from 5.5% to 18%. Earlier, an individual had to pay different taxes, however; the scenario now has changed. The tax regime will subsume taxes like excise tax, service and value added tax, octroi or the local body taxes. A unified tax will now be applicable on all goods and services which is segregated into three tax slabs consisting of:
CGST, SGST and IGST
The Council responsible for the new tax regime has decided four-tier tax structure for the the real estate industry – 5, 12, 18 and 28%.
How will GST will help real estate developers?
According to a few real estate developers and builders, the implementation of GST and RERA will increase the prices in the state by 5% to 6%. Developers will have to pay goods and services tax on the below list of things:
Under the new regime, the construction materials will come under the 18% and 28% tax slab. According to a report released by CRISIL, the cement will be taxed at 28%, while steel will be taxed at 18%. Other inputs like paint and white goods, will come under 28% tax slab. The housing unit will taxed at 12%. This rule is applicable for real estate companies in Navi Mumbai as well as all states in India.
How will GST help home buyers?
A uniform tax means home buyers are saved from the implications of triple taxation, thus bringing down the compliance costs. Earlier, developers used to charge diverse taxes due to ambiguity of taxes to be charged. The new tax regime will bring transparency and a structured tax policy, therefore, bringing clarity among home buyers.
As only a few days have passed to the implementation of GST, for home buyers in Navi Mumbai, this will bring straightforwardness into the sector without causing any tax confusions.
For home buyers, who are searching for dream homes in Navi Mumbai or Mumbai, the roll out of GST will be beneficial as it promises to eliminate tax ambiguities.
GST and affordable housing:
Affordable housing will also be liable for tax at 12% . Let us understand this policy with an example:
For example: A prominent builder has launched an affordable project, which offers 1BHK at Rs. 6 Lakhs and a buyer is required to pay down payment of around 10% while the remaining would be financed by the banks. Affordable housing is exempted from service tax, the builder imposes zero tax as the rate is all inclusive. It is likely that the government may come out with a clarification regarding the applicability or continuing exemption under the GST. For the affordable housing, which is basically an initiative under the Pradhanmantri Awas Yojna, the overall impact of GST will remain be neutral, but full of gains.
As stated by the Finance Minister, affordable housing will not be impacted by GST. This comes in the wake of the ‘Housing for all by 2022’, an initiative by the Union Cabinet chaired by the Prime Minister, Shri Narendra Modi.
If you’re looking for affordable homes or luxury apartments in Navi Mumbai, visit Akshay Argade. We will assist you in getting the right value for your property based on market research and our expertise.