On July 1 last year, the Goods and Services Tax (GST) had shaken up the real estate sector, already reeling from the after-effects of the two jolts of
Real Estate Industry Hopeful About Budget 2018-19 | market update | Real Estate
The real estate industry has been severely impacted by different reforms like GST, RERA and demonetisation. The real estate industry is looking forward to the budget 2018-19for getting some relief through measures like infrastructure status and lower taxes. Last year, the real estate industry suffered a huge decline in home launches as it underwent different structural policy reforms. Compared to 1,75,822 home launches in 2016, the figure dropped to 103570 units in 2017. The players of the industry are looking forward to rationalisation of the GST rates from the current 12 percent to 6 percent. They are also expecting that the stamp duty will be brought under the ambit of GST.
According to Naredco National President Niranjan Hiranandani if the rationalisation of GST takes place and brought it down to 6 percent and input tax credit is given, there will be a revival and thus demand will increase. In the pre-GST period, the service tax was around 4.5 percent and VAT was 1 percent which resulted in the total tax of 5.5 percent. The costs of the consumer increase eventually as stamp duty continues to remain even after post-GST and the rates differ from one state to another. The real estate sector is expecting that the state government will either merge with the existing rates of GST or reduce the rates. Brotin Banerjee, Tata Housing Managing Director and CEO said that they are hopeful that the burden of stamp duty and registration on properties will either be reduced or merged with GST. The financial burden of the consumer will be lessened if the reduction of the taxes and add-on costs and brokerage charges take place.
Infrastructure status will be allotted to real estate sector and would help the developer to receive construction funds at lower rates. In the long run, it is going to benefit EWS and LIG consumers as the projects could be made affordable to the consumers. Certain tax sops are also being expected by the industry like increasing the Rs 2 lakh tax deduction limit for housing loans. Deep concessions are expected in income tax which is around Rs 5 lakh per annum for home buyers. Reforms in land acquisition are also expected by the real estate industry. The issues related to the land costs with are very high will also be addressed and focused. Many private players will be boosted by lowering the costs for land acquisitions.