The GST Council on Sunday made an announcement declaring significant cuts on GST, which concerns the real estate industry in India. There have been two principal areas where the GST has been cut down.
For under-construction houses, whose completion certificate has not been issued yet, the GST has been brought down from a high 12% to a mere 5%. This will act as a strong boost for the real estate sector, as more and more potential home buyers will actually take the next step to a deal closing. As a result, more money will flow in during the construction phase, and it will ease out construction progress.
The council has also cut GST rates on affordable housing to 1%, from a current 8%. Also, it has expanded the scope of affordable housing for those costing up to 45 Lakhs, measuring 60 sq metres in metros and 90 sq metres in non-metro cities.
“This (GST reduction) decision will certainly give boost to construction sector”, said Finance Minister Arun Jaitley.
We expect real estate sales to boost significantly, after the tax rates are implemented from 1st April, 2019.
To Be Noted: GST is not levied on real estate properties for which completion certificate has been issued at the time of sale.
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