Decoding price swings in housing sector post-GST
The Centre has proposed a 12% Goods and Services Tax (GST) on the sale of houses from July 1. Let us have a look at the current taxes and analysis the taxes applicable post-GST.
In Maharashtra, home buyers will have to shell out 6% more for stamp duty charged by the state. Currently, buyers pay an overall 11.5% tax on a unit, which includes 6% as stamp duty, 4.5% as service tax and 1% as VAT. Under GST, there will be a 12% flat tax rate on the cost of a unit. This results in an overall tax rate of 18%.
According to the industry experts, the overall price of a unit is expected to be brought down by the real estate developers post-GST as they will get input tax credits on raw material such as steel, cement and sand.
If a project is in the initial stages, there is a higher chance that a consumer will get the benefits of these lower costs incurred by the developer. But if a project is 80% complete, major benefits are unlikely. It also depends on how much credit realtors are willing to pass on to the customers. Experts also feel that the difference in final pricing will not be over 1-3%.
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Via:: Stock – India Infoline