Buying House is going to be more costly henceforth as Govt. has decided to impose Tax @ 10% on 33% of the Base price of the property. This will result into hike in total price by 3.3% than what it is currently. Govt. plans to include charges like development fee, Parking Fee and premium location charges on base price usually paid after the completion of project.
To elaborate it in a broad way, a house which costs 10 Lacs now before the execution of the new amendment will costs around 10.33 Lacs once the new rule is going to get implemented. This new price may increase further if all the above mentioned charges are levied over an above the Base price.
However Govt. is considering to exempt those who have done the booking of the Flat before the notification date as confirmed finance ministry official.
This new decision of Union Budget will widen the definition of construction service and will impose tax on under construction properties as well. This new rule will get implemented only after final nod of Indian Parliament and service Tax will levy if payments were made before the completion of the project.
Though the real estate company’s are not really very happy about the decision as this could have an adverse effect on the real estate market but Govt. remains firm on the decision of levying Taxes. As per Revenue minister this new charges will not affect the market as the customer’s will have to pay only 3% – 4% extra on what they are paying now.
But the fact remain same that buying houses will get costly not only because of this new Govt. policy but also as today all major Banks like ICICI , HDFC etc has decided to increase the lending rates which was lowered by Govt. during recession period. So the overall impact on consumer could percolate down the line to the entire Real estate Market which is about turn around leaving behind the recession crisis…….