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How Will GST Impact Apartment Purchasing?

by SA Homes, Posted on 20/12/2017

Planning to buy an apartment, but afraid of GST?

GST or “Goods and Service Tax” is a value added tax which is chargeable at all levels of supply chain. The main purpose of GST is to improve and simplify the business in the country and reduce the tax burden. According to the researchers, the construction sector in India contributes more than 5% to the nation’s GDP and 78% of gross capital.

GST is not applied directly to the end product, the process begins from the manufacturing stage itself. But many people, especially in the rural areas are not aware of it and are getting manipulated from those who misuse the concept.

The GST rates have been finalized for different sectors which also include construction and real estate.

According to GST Council, the rate will be 18% for all the property which is under construction,  but due to input tax credits which the builder has to avail, the rate on this kind of property will be around 12%.

So, the cost for Under construction properties will be much cheaper than ready-to-move-in properties.

Still afraid of GST? Here are some of the benefits that buyers can gain!

  • Before 1st April 2017, if you bought a property at a certain amount of price you will need to pay a certain percentage of the price as service tax to the government. But after implementation of GST,  properties under construction are exempted from service tax.
  • Value Added Tax (VAT) state subject lies between 1% and 5% of the property value. But Once GST is implemented it can simplify tax structure and reduce the process of taking legal actions.
  • The impact of GST is going to be beneficial for apartment or property resellers since they do not have to pay any indirect taxes, except in the case of under-construction property transactions.

Now, as you’re clear about the concept of GST while buying an apartment, just relax and concentrate on finding suitable apartments for you & your family.

If you are Looking for spacious & reasonably priced flats in Palakkad, then look no further. Check out our various projects in Kalpathy and other areas.

SA Homes is one of the well-known property developers in South India, Kerala, with a solid reputation for building comfortable living spaces.

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