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  • Category: Miscellaneous

    A small request to the Government: Cut GST rate on property

    The Government is going to table the budget for the next financial year very soon. Now various parties (not political) and groups are submitting various demands before the Government. In this connection, I think that the present Government has been taking various measures to encourage people to have their own home. To facilitate this, the Government has been steadily reducing interest rate on home loans offered by banks and other financial institutions.

    However, I have noted that the GST rate for real estate is presently 12% of the sales consideration. Before the imposition of GST, the Service Tax was 4.5% and VAT was 1%. So, to facilitate Government's aim to help people to have their own home, I propose that the GST rate on property must be cut down to 5% instead of present 12%. This step would undoubtedly help common people to have their own home.

    What is the opinion of other Members on this issue?
  • #621420
    It is a good request. definitely, that will be good if the government brings down the GST rate on real estate transactions is brought down to 5% from the present 12%. Many middle-class families are trying to buy a shelter either as an apartment or an individual house, by taking loans from the banks. The government is trying to help them by bringing down the interest rates on loans and some income tax rebates also. Becuase of these incentives only many employees is thinking of going to their apartment or an independent house. As suggested by the author if the GST is brought down the old rate of tax, there will be a lot of encouragement to the people and go for land or building on loans. A real point to be looked in to by the Government very seriously.
    always confident

  • #621438
    In fact the Telangana Real Estate owners have convened a meeting and the deliberations were sent to the Finance Minister Arun Jaitely to reduce the tax on properties. There was a lull in real estate after the bifurcation of AP into two states. Adding fuel to that the demonetization effect has made the situation further worst and now the new GST rates of 12 percent is forcing people to rent the home and keep the money safe in bank and earn interest , instead of going for housing loan with big interest that wont serve the purpose. Hope our Finance Minister would seek response from all.
    K Mohan
    'Idhuvum Kadandhu Pogum "
    Even this challenging situation would ease

  • #621469
    A good proposal if we look at it from the perspective of first time home buyers and people who want to own a site for their future plans of building a house or giving it to their children. Is the high GST to discourage illegal investments/people from selling properties often? Many of us belonging to the middle class have big EMIs and if you check, the biggest chunk would be the loan for a home or a plot of land. The registration charges and GST would make the new owners feel the pinch. So, a move to reduce this would be welcome for the true first time home owners. I use the term true homeowners because there are many who keep buying houses and property as part of real estate investments and for commercial purposes, for this group, the Government can keep it high, I don't mind as the true aim or reason behind buying a property is not for a 'home to live in' but a place to grow their money.

  • #621478
    The implementation of GST was a hasty decision without proper homework on the rates and the upper cap. There was lot of adhocism in implementation of this. Some of the rates were so called rationalised owing to the political compulsions in Gujarat. Reduction of the interest on the home loans and other loans is the compulsion of the government after demonetisation. The interest rates on the bank savings have been also reduced owing to the increased liquidity of the banks.

    The construction sector has been worst hit after demonetisation. The sole reason was not black money but many other factors, If government wants to set right this sector, they have to rationalise the GST rates for this sector. This sector is also a sector which generates considerable employment. Let us hope for the better.

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