Real estate players on Monday said the new GST rates to come into effect from April 1, 2019, would wean customers off investing only in ready-to-occupy homes, while igniting interest in under-construction projects.
Property consultancy firm Anarock’s consumer sentiment survey stated that 49% buyers wanted to opt for ready properties in 2018 and out of the remaining, only 5% preferred newly launched projects. “The recent rate cuts will give a major boost to the under-construction or newly launched units as not just buyers but long-term investors will be once again attracted to enter the real estate market,” Anuj Puri, chairman, Anarock, said.
Knight Frank India’s chairman and managing director Shishir Baijal said the move would improve affordability among home buyers. “The reduction in GST can potentially reduce the price by 6-7% on the overall purchase, pushing realty sales. It would, in turn, bring down the unsold inventory,” he said.
According to different reports, Pune has close to four quarters of unsold inventory in the residential sector – over 80% of it in the under-construction phase.
However, not everybody was impressed by the move. Rohit Gera, managing director, Gera Developments, said, “The reduction of GST for under-construction homes is merely a transfer of the tax from the customer to the developer since the input tax credit is done away with… Eliminating the ITC reverses all the gains made in bringing the smaller service providers into the system and incentivizes black money transactions.”
Source: Times Of India.