The Hindu Business Line : AP Govt to study options to cut taxes on apartments

“Taxes such as value-added tax, service tax and stamp duty were resulting in significant increase in the cost of flats, making it difficult for first-time buyers.”

Our Bureau

Hyderabad, Sept. 9 With the overhead costs (taxes) increasing significantly for home buyers, the State Government has agreed to study the issue and see if it could reduce tax rates.

Responding to a query by builders at a real estate summit organised by a private television channel on Saturday, Mr K. Rosaiah, Minister for Finance, asked them to submit a detailed proposal.

A panel comprising Mr Rosaiah, Mr Dharmana Prasada Rao (Minister for Revenue), Mr Botsa Satyanarayana (Minister for Housing), Mr C. Sekhar Reddy, President of Builders’ Forum, and Mr Hari Challa, Managing Director of Aliens Group, took part in the discussion.

The panel deliberated on how to offer affordable housing for the middle-class buyers.

Burden of levies

Mr Reddy pointed out that taxes such as value-added tax, service tax and stamp duty were resulting in significant increase in the cost of flats, making it difficult for first-time buyers.

Responding to this, Mr Satyanarayana said that the Government could offer flats at lesser rates (than the private builders) as they don’t focus on margins.

“We are able to give (flats) at lower prices as we don’t have overheads in terms of managerial manpower.

“We have decided not to increase the price of flats (under Rajiv Swagruha) more than five per cent even if the cost of inputs goes beyond that,” he said.

Some builders wanted the Government to see to it that there was good connectivity to the housing projects taken up by the private builders. Mr Rao said the Congress Government had succeeded in making thousands of acres accessible for housing development in the State.

“We unlocked huge tracts of land by repealing the Urban Land Ceiling Act.

“This, in fact, is one of the reasons for reducing the cost of the land in urban areas,” he said.

The Outer Ring Road project too would trigger real estate development along the 168-km road around the State Capital.

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