Real Estate is one of the crucial sectors of Indian economy and plays an important role in recruiting employment in India. Real Estate ranks second just after agriculture sector. With the Goods and Services Tax (GST) planned to replace multiple levels of taxation, let’s look out how it’s going to impact on real estate industry.
According to experts, GST would bring a fair transparency in real estate sector and would minimize deceitful transactions. So, the implementation of GST will definitely be a positive sentiment booster among property buyers. Though, the end-consumer satisfaction also depends on the final price of the property as it is driven by market conditions than on costing principles.
Currently, sale of land and buildings does not fall in GST boundaries but expected to be taxed within a year. On the other side, land and building construction would be beneficial with the price declared for cement, bricks and iron under GST. So the realtors believe that ready to use properties would be highly preferred by home buyers as GST does not implement for the time. However, these properties may have a high price as it is not beneficial of input tax credit.
In real estate sector there is always a huge unrecorded expenses for each project. Due to GST implementation this percentage would cut down which would benefit the real estate sector. So the impact of GST on real estate sector is expected to be neutral under GST as it is going to have a lot of transparency and accountability.