Housing prices in Rajasthan:
The Goods and Service Tax (GST) Council in its 33rd meeting that has been conducted on 24th February 2019 has made a decision to lower the tax burden reducing GST.
Property prices, which had grown exponentially in the state, are expected to fall, as the GST council’s decision of cutting the tax rate on under-construction properties will be implemented from 1st April 2019.
On the under-construction properties, consumers will now have to pay 5% of goods and service tax (GST), as against the existing 12% while on affordable housing to 1% from the current 8%. GST council has also increased the scope of affordable housing to those costing up to Rs 45 lakh and measuring 60 sq-mt in metros and 90 sq-mt in non-metro cities.
Statistics of buying a flat after GST rate slash
In the present condition, if a buyer buys a flat worth Rs.1 crore, he has to pay approximately 18% as a tax, including registry, stamp duty, and GST, which is a huge amount. Now a buyer will have to pay Rs.5L, instead of Rs.12L as GST Tax. This could prove to be a major relief for the homebuyers.
Similarly, a buyer buying a house falling under the affordable housing scheme class will be benefited considerably too. If a flat cost is Rs.20L (under the affordable housing scheme), the buyer will have to pay Rs.20000 instead of existing Rs.36000. As the bracket of affordable housing is increased to Rs.45L in the GST Council meeting, this will also ease middle-income groups.
Homebuyers believe that this move would bring cheer for them and the Rajasthan real estate market which was facing a slowdown. At the same time, it is expected that the market will recover in the months to come.
On the other hand, the developers believe that the lower tax burden on home buyers is expected to drive demand in the affordable segment which, successively, will keep developers engaged in building more affordable homes.
The decision is expected to help the government as well constantly move towards reaching its target of ‘Housing for All 2022′. Furthermore, the move would also inspire developers to construct houses in the government’s scheme, which are not yet getting takers.
