Telangana realty sector rejoices as VAT removal and single window clearances will come to force soon
Real estate players in Hyderabad say project execution delays will be reduced with a string of reforms initiated by the government. The newly bifurcated state has initiated many reforms in the real estate sector and the builder community is very happy as they feel that they will save time with the proposed single window clearance system.
This is a win-win situation for both, the developers and the home buyers. This move will indirectly help the home buyers save on the pre-EMIs to an extent. The Telangana chief minister K Chandrashekar Rao (KCR) had announced the scrapping of VAT on real estate transactions and agricultural land conversion tax. KCR had announced about this during the recently held property show in the newly formed state of Telangana.
VAT is 1.25 % of the transaction value. This has been an annoying issue for the real estate players. The government also had agreed to allow the builders to pay the impact fee in installments instead of upfront payments.
The impact fee, which comes into play for the constructions of five-storied plus complexes, puts an additional burden on the builders. The impact fee ranges from Rs 70 to 100 per square feet and when we consider large apartment complexes, the amount reaches into lakhs and sometimes crores which is difficult for the developers to pay in one shot. The impact fee increases with the increase in the number of floors. In some cases, the impact fee paid is to the tune of Rs one crore.
Source- Financial Chronicle
Apartment complexes, Indian real estate players, K Chandrashekar Rao, Property show, Real estate players, single window clearances, Telangana real estate, VAT removal
