Yet another revolutionary decision by the Government: Ashok Mohanani, Ekta World
The expected cut down in GST rates for under construction projects to 1% & 5% for affordable housing will be great push for the sector, it will been seen as yet another revolutionary decision by the Government, bring in a wave of relief to the buyers. Homebuyers can once again look/opt to invest in properties if there is a reduction in the tax rates and more over it will assist developers in clearing off their unsold stock. And on the other end, the decision to charge an additional 1% stamp duty surcharge on value of property may act as a mild dampener to roaring spirits.
Under construction segment will largely benefit: Om Ahuja, K Raheja Corp
The GST rate cut will provide respite to the overall real estate market however this will be a momentary infusion of notional positive sentiment. While the under construction segment will largely benefit from this, with input tax credit benefit developers losing the same, prices of the apartment will start looking northwards considering developers lose the input tax credit.
Positive for homebuyers and developers: Farshid Cooper, Spenta Corporation
The 33rd GST council meeting was positive for homebuyers and in turn for developers. The issues regarding transaction costs and affordability which have plagued the sector over the last 18 months or so has been addressed. With the reduction in the rates of under construction buildings to 5% from 12% the developer fraternity will be relieved as this could potentially be the catalyst to boost demand for under construction homes. Further, the reduction in rates from 8% to 1% for the affordable housing sector will help the sector grow and go a long way in achieving the honorary prime minister’s vision of housing for all by 2022. Also, doing away the ITC (Input Tax Credit) will make GST compliance for easier and more cost-effective for developers. That said, without ITC developers will now have to deal with increased cost of 18% (which is the GST rate for most construction-related items) and account for the same when planning cash flows and project costs.