Homebuyers will be paying a uniform
rate on their purchases under the Goods and Services Tax (GST) regime that will
bring down the cost of their purchase. A buyer will now have to pay 12 per cent
GST for buying a home. Under the outgoing regime, buyers of under-construction
properties had to pay multiple taxes, including service tax and value-added
tax, which made the purchases comparatively expensive.
"The real estate sector was heavily
taxed, and we welcome a single stable 12 per cent GST rate, inclusive of the
value of land and with full input tax credits. We are of the view that the
actual tax impact under GST would equal or would be lower than the existing
multiple indirect taxes on the sector.
However, much clarity is needed on whether
or not affordable housing will become more affordable under the current regime.
"There are few things where we are still waiting for clarity such as whether
affordable housing will remain out of the ambit of the GST or not.
However, while the pricing of houses is
going to dip down, staying in them is likely to get costlier under the new
regime. Owners of flats will have to pay 18 per cent GST on MAINTENANCE
CHARGES. The existing rate at which maintenance charges are taxed stands at
15.55 percent. This included 15 per cent service tax, 0.5 percent Swachh Bharat
tax, and 0.05 percent non-agriculture tax. In effect, the change in rates will
amount to an additional burden of 2.5 percent on homeowners.
The tax is applicable to property
owners paying over Rs 5,000 as maintenance charges. This, however, does not
include utility bills or property tax or STAMP DUTY. Similarly, housing
societies that collect maintenance charges from flat owners and the ones that have
an annual balance of over than Rs 20 lakh will have to pay these charges. In
this case, too, utility bills, stamp duty, and property tax would not be