Garima Singh The government has cleared the air on the applicability of the Goods and Services Tax (GST) for buildings and ready-to-move-in flats, say real estate experts. With this, secondary market transactions in realty properties with completion certificate are expected to see a spurt.
The government clarified recently that no GST need to be paid by buyers of constructed property — complex/building and ready-to-move-in flats where the sale takes place after the issue of the completion certificate by the competent authority.
However, the GST is applicable on sale of under-construction property or ready-to-move-in flats wherein the completion certificate has not been issued at the time of sale.
“The secondary realty market segment does not attract the GST, so buyers eyeing ready-to-move-in units may certainly evaluate this option rather than paying 12 per cent GST on homes on the primary market,” said Anuj Puri, Chairman, Anarock.
‘Hot favourites’
Puri added that ready-to-move-in projects with the completion certificates will become hot favourites.
“Before the GST, there was a huge demand for under-construction properties than finished homes due to cheaper rates and availability of more options. However, now, there has been an increase in the number of buyers opting for resale properties due to a trust deficit,” said Manoj Gaur, Managing Director, Gaursons Group.
The Centre has also said the builders are required to pass on the benefits of the lower tax to buyers.
“With the developers expected to pass on the benefits of lower GST to the buyers, it will lead to regulation of housing prices in the industry,” said Jaxay Shah, President, Credai.