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Checkout The Latest 10 Development In Gst Exemption For Under Construction Properties
It will be cheaper to buy your dream home from April 1st as the government not only lowers the GST rate for all units under construction, but also extends the definition of the affordable housing sector.
After GST board meeting, Finance Minister Arun Jaitley said the relief of the real estate industry would provide housing for all and meet the expectations of the new middle class.
Here are 10 things to the new GST rates for the real estate industry:
1) The VAT on components that are not in the economically affordable housing sector has been reduced from 12% to 5% without the IT Tax Credit (ITC). The goods and services quota for affordable housing has fallen to 1%, while the ITC has not risen by 8%.
2) The discount applies to the property under construction or the unit to be checked in if no proof of completion is issued at the time of sale. Properties that have completed the construction work are subject to the stamp duty, not the goods and services tax.
3) The GST Committee has also redefined the economically affordable housing sector and there are no evaluation thresholds. Property under construction at a cost of Rs 450,000 is now considered an affordable housing project and attracts a GST of 1%, if not ITC.
4) Although the price limit for affordable housing for subways and non-metro projects is 450,000 rupees, the requirements for the carpet area are different. Only land with 60 square meters of carpet (Delhi - NCR, Bangalore, Chennai, Hyderabad, Mumbai - MMR and Calcutta) and 90 square meters of non-subway is capped at 450,000 rupees to qualify for 1%. Excise duty.
5) According to the new definition of affordable housing, you can buy a two-bedroom house (60 m²) in a subway city and a three-bedroom house (90 m²) in non-subways and only 1% pay the GST.
6) The new GST rates in the real estate industry will apply from 1 April.
7) According to Anarock Property Consultants, there are 5.88 lakh unsold homes in India's seven largest cities, of which 34% are below Rs 40 lakh. "With affordable housing, now defined in Rs 45 lakh, more properties qualify for this category. The GST cut, combined with this critical amendment to the definition, will result in increased sales of homes in this budget area - a win-win situation for builders and buyers, "said Anarock Chairman Anuj Puri.
8) Chairman and Managing Director of Knight Frank India, Shishir Baijal, estimates that lowering the GST can potentially reduce the payout of buyers by 6% to 7% of the total cost, depending on the category. The increase in sales will also reduce the unsold stock that has affected the real estate sector, he said.
9) The reduction in GST rates would stimulate demand for under construction dwellings, which had slowed as buyers preferred ready-made dwellings that did not attract GST, said MSS Mani, partner of Deloitte India.
10) Under the new GST tariffs, contractors cannot claim the ITC. "Certain categories that are not eligible for input tax rebate are a departure from the basic principles of a good GST, resulting in traceability issues and an opaque transaction," said Mani.
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