GST Is Expected To Have Positive Effect On Real Estate

Posted by propertypivot on March 9th, 2017

The bill has been passed unanimously in both the houses during the month of August 2016. Since then, each and every expert is coming up with assumptions on how this new bill will affect the real estate in India.

GST will result in all the individual, central and state taxes to be merged together under one tax. As of now, both the central and state governments impose a number of different taxes on real estate properties which sometimes even result in dual taxation. GST will make the scene much clearer and transparent for all the states.

A brief intro of Goods and Service Tax

Goods and Service Tax or GST is basicallyindirect tax that that would be levied by the government on Indian nationals. As of now, we are paying a number of different taxes and with GST everything will be merged together. The taxes imposed by central and state governments individually on goods and services will no longer be valid and only one taxation method will be implemented. The real estate market in India will see a definitive change with the introduction of GST.

The effects of GST on Real Estate in India

The new tax is going to be highly beneficial for the real estate market.  We were paying different taxes like Service Tax, VAT, and Stamp Duty etc. while making a transaction related to real estate in India. Now with the implication of GST, we will only have to pay one tax that would cover every tax associated with real estate transactions.

As of now, any buyer pays 3.75 percent of the total amount of Service Tax. Other 1 to 5 percent of the agreement value is paid as VAT. Finally, a large percentage of the amount is paid as stamp duty to the state government. Other than that, sales tax, entry tax, customs duty, excise duty and many other taxes are paid by the builders which eventually raise the price of the property. After GST comes in action, the overall money spent that rounds up to around 30 percent to 40 percent will come down to 15 percent to 18 percent. So you can expect a good fall in the overall prices of real estate and it is the best time to initiate your search for best property in India.

Still, these are still going to be assumptions until actual implementation of GST in the real estate market. The effects of the GST will be visible after 1^st April 2017. Until that time comes, we can only expect that GST is going to have a positive effect on the rising cost of the properties in India and the buyers will get some relief in terms of the final cost of the property.

So while the GST implementation is getting ironed out, this does seem like a promising time to select the best property in India and plan for your investment.

Author Bio: The writer is a blogger. This article is about Best Property in India