Will GST make homes expensive?
Come July 1, under-construction projects will attract a goods and services tax (GST) rate of 12%. Amid all the hullabaloo over the unified tax regime in the country, speculation is rife on would it lead to a hike in property prices?
The members of CREDAI (RNE) Raj Nagar Extension, believe that property prices will go up once the new tax regime kicks in. They feel RERA and GST will push price trends with a 10-20% spike in property prices.
“Taxes are being rationalised which will lead to increased transparency. There will be more clarity post-GST in terms of taxes. Under GST, the under-construction projects are going to attract 12% tax, where previously it was about 4.5%. This will push the market and we can expect an increase in prices. Steel will also attract 18% GST, which will further put stress on prices,” says Manu Garg, Director, Carol Infrastructure Pvt Ltd, who was speaking at a press conference held by CREDAI, RNE chapter.
“Cement has seen both highs and lows in the past and it directly impacts the construction cost. Any increase in cement prices will directly influence the construction cost of a project. The government is also working on the correction of minimum wages. From here, the market will only move ahead so the best time to buy a house is now. Home loan rates are low and the market gives end-users and investors the right climate to buy,” adds Garg.
General Secretary of CREDAI RNE, Gaurav Gupta says that the best time to buy property is now as prices are attractive and home loan rates are cheapest at this point in time. “The market offers attractive prices for home buyers. Home loan rates are the cheapest and affordable homes are getting subsidies from the government,” explains Gupta.
The GST rate for steel has been finalised at 18% which is expected to be beneficial in the long run for other sectors as well. Cement prices are expected to go up marginally, as it has been put in the 28% tax slab from the earlier 23-24%.