GST – PROS AND CONS ON REAL ESTATE.

THE BENEFITS OF GST FOR BUSINESS MAN :

  1. UNIFORMITY OF TAX RATES AND STRUCTURES

GST will ensure that  the indirect tax rates of this structures are common across the over country, thereby increasing certainty and ease of doing business. In this words, GST would make doing of  business in the countreis  tax neutral, irrespective main choice of place of doing business.

 

THE BENEFITS OF GST FOR REAL ESTATE DEVELOPER CAN BE SUMMARIZED BELOW:

 

  1. UNIFORMITY OF TAX RATES AND STRUCTURES

GST will ensure that indirect tax rates and structures are common across the country, navimumbaihouses thereby increasing certainty and ease of doing business. the other word, GST would be make doing business in this country tax neutral, irrespective of the choice of the place of  the doing business.

 

THE BENEFITS OF GST FOR REAL ESTATE DEVELOPER CAN BE SUMMARIZED BELOW:

 

Under new tax for regime, the properties developer or the builders in this subject to be central excise duties, vat and entry taxes (levied by state) on construction material cost. Different services are under this regime like the labor charges, navimumbaihouses architect fees, approval charges and legal fees etc. Developers pay service tax of 15%.

 

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img1: Real Estate Navimumbai

 

Real estate developers also struggle with the challenges of multiple-taxation and the cumulative burden eventually gets passed on to the buyer. But the significant change in the tax rate and the lower transportation and logistics costs under  GST will reduce overall cost. navimumbaihouses Now they are free from all other taxes and they can now claim input tax credit and the profits.

 

 IMPACT OF GST BILLs ON REAL ESTATE :

 

  1. IMPACT ON RESIDENTIAL REAL ESTATE:

If we are look at the topest residential properties sector, sales are not be just impact by tax rates but also by the sentiment, and also on account of the trust deficit which the Real Estate Development & Regulation   Act RERA now seek to be address. That said to if costs do go higher unders GSTs, lowers prevailing currents home loans rates could assuage impact to some extent. navimumbaihouses There is a burden above Buyers and investors as well as developers that the final ticket size of homes will increase even if the Government levies GST at 12%, as compared to the existing service tax rates.

  1. IMPACT ON RENTAL HOUSING

Credit of input GST will be available to a developer, if the completion certificate is obtained before the sale is executed. whereas this facility is not available if the developer chooses to rent out any property. navimumbaihouses GST is equally applied for rental houses under use as an accommodation. as such tenants are going to face spike in the rental charges of a an accommodation under the GST system since there is no service tax applicable in present scenario.

  1. IMPACT ON AFFORDABLE HOUSING

Although GST is a wide topic to speak about, it is just going to replace multiple taxes under one line. it will definitely affect the people who are in search of property at various levels. here is a short overview on the impact of GST over rental housing.

developers charge home buyers with VAT and service tax when they book the house before the project is completed. these taxes are kept transparent in the agreement. navimumbaihouses Further they charge the non-creditable taxes like Special Additional Duty (SAD), Countervailing duty (CVD), Central sales tax (CST), Entry tax, Excise duty are all included in the base price which are not kept visible to the customer.

Now this GST regime overtakes all the above taxes and keeps everything transparent. hence there will be only one tax common to all home buyers.only thing is that the stamp duty will continue to be imposed irrespective to the projects under construction or ready for possession.

  1. IMPACT ON COMMERCIAL REAL ESTATE

When it comes to GST’s impact on the commercial office real estate market – with the existing service tax for commercial leases at 15%, GST would be likely neutral overall at 12% slight savings, and at 18% slight increase.

 

BENEFITS OF GST FOR HOMEBUYERS:

 

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img2: Real Estate Navimumbai

 

  • The actual GST rate on under-construction properties is 18 per cent. However, the effective tax on such properties would be 12 per cent as under the new regime developers will be allowed input tax credits.
  • Currently, a homebuyer has to pay several indirect taxes, including excise duty, value-added tax and service tax, which amounts to a tax outgo of about 11 per cent, excluding stamp duty.
  • However, the option of getting full input set-off credit that developers enjoy on under-construction projects would not be applicable on ready-to-move-in flats.

Visit: https://navimumbaihouses.com/ 

 

 

Disclaimer: The views of this expressed above are for informational purposes only based on the industry reports & related news stories. Navimumbaihouses.com does not guarantee the accuracy of this article, completeness, or reliability of the information & shall not be held responsible for any action taken based on the published information.

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