Since the inception of GST, a major question in every home-buyers mind is, “Will GST reduce prices of residential real estate?” or “Will the prices remain high?”
Currently, a homebuyer has to pay several indirect taxes, including excise duty, value-added tax and service tax, which amounts to a tax outgo of about 11 per cent, excluding stamp duty. With the launch of GST ‘how it works’ might already be on your mind. Since the GST is to subsume multiple indirect taxes, it will simplify tax compliance and minimize the scope for double taxation. So, there is clear reason for home buyers to cheer, even if they have to pay slightly more in case the standard GST rate is high.
GST itself is expected to add about two per cent to India’s gross domestic product (GDP). That is a substantial boost to the economy. If the economy does well, obviously, there will be more demand for real estate, and it will be a boost for the sector.