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Impact Of GST On Under Construction Homes And Ready-To-Move-In Properties

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Impact Of GST On Under Construction Homes And Ready-To-Move-In Properties

After RERA Act, it is GST that promises to standardize the real estate sector. At present, a home buyer has to pay several indirect taxes to buy a home like excise duty, value-added tax and service tax. All this amounts to 11% and does not include stamp duty.

With GST, all these taxes have been subsumed and the buyer will now have to pay 12% tax for purchase of any property, excluding stamp duty. However, this only stands true for under-construction properties and not on completed ready-to-move-in apartment homes. While the entire input credit — excise duty and Central sales tax on construction materials that are paid by developers — will also be allowed; unlike earlier.

The government released a statement, “The builders are expected to pass on the benefits of lower tax burden under the GST regime to the buyers of property by way of reduced prices/installments. It is advised to all builders/construction companies that in the flats under construction, they should not ask customers to pay a higher tax rate on installments to be received after imposition of GST.”

According to E&Y report from 2015, the real estate sector accounts for 5% India’s GDP, making it the second largest employer in India. However, the industry faces many issues like macro-economy conditions and fiscal policies. One such challenge was the multiple indirect taxes levied by each state such as VAT, Stamp duty, Service tax, registration fees and so on.

GST simplifies tax compliance and eliminates the chances of double taxation. Thus, giving home buyers a candid reason to cheer up even though the standard GST tax rate is slightly higher. Since with GST it is expected that cost of projects will fall for developers, it would mean cheaper homes for consumers too. For builders the actual tax effect will lower due to the input tax credit on raw materials than the present taxes.

Mr. Nayan Shah quoted, “Mayfair has always been a RERA complained company.

We were transparent with our customers. When RERA came it was so very easy for us, to be the first developer in the country to be RERA complained & RERA registered.

There’s a second confusion going on in the market about GST.

A good news I want to give about GST is that for all of us, if you were to buy a home in any of Mayfair’s projects like Mayfair Greens at kandivali, Mayfair Legends at Malad, Mayfair Hillcrest at Vikhroli, Mayfair Virar Gardens at Virar or the Page 3 pent house at Versova; all these projects are GST free. They are GST free because they are ready to move-in with occupation certificate.

GST is primarily applicable to under-construction projects. Hence, when you buy a home from Mayfair, in any of these projects the GST is not applicable and you save 12% on the total cost of the flat.

So, I feel that the right time for us to offer you your dream home is today and the right time for you to buy is today. So, come and take advantage of this unique, once in a life time opportunity.”

Builders at present are scaring customers of the price hike since they can’t claim any tax credit for taxes paid before July 1. The amount of tax that a property buyer will have to bear depends on his property. If you are moving in a ready home or if your under construction property is almost ready and have paid 90 to 95% price, you will have to pay flat 12% tax on the remaining amount. However if you have just bought an under-construction unit that costs 1 crore and just paid 20 lakhs of it then the remaining 80 lakhs will invite 12% GST tax.

Hence given the current scenario it makes perfect sense to invest in a ready-to-move RERA compliant home which is 12% GST free and you can save up to 39 lakhs.

For people who wish to buy ready homes after GST rolls out, the good news is that they can negotiate on the prices based on the credit available to the developers for taxes paid on raw materials. Prices can fall up to 5%. This will especially benefit lower segment homes than the luxury segment.

Also Read: Realty NXT Supports Mayfair Housing’s Initiative To Save The Poisar River

Special Reports

INIT Makes The Difference To The Ajmera 1150 Home Delivery

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INIT Makes The Difference To The Ajmera 1150 Home Delivery

Ajmera Realty is a trusted name in the real estate industry. They joined hands with INIT  to delivery 1150 homes. INIT had to come up with something impressive as Ajmera holds a legacy of 42,000 happy customers in the 49 years of their operations.

Ajmera Realty wanted to show their delivery commitment and dedicates a rare tribute to all its customers by delivering 1150 homes to 1150 families this festive season. They wanted their customers to know that this remarkable feat has been made possible only because of them and their faith in the company.

This was the brief the design agency worked on and INIT came up with different TVCs to really capture the epitome of this home delivery moment. They called it – ‘Delivering Homes, Delivering Happiness’. The ads and TVCs went on social media platforms as well as national television channels.

In order to showcase Ajmera’s strength and focus towards delivery, they created four Tvcs that catered to different target audiences. The whole idea behind the TVCs was for people to understand the magnitude of Ajmera Realty and the brand it has become today.

The first TVC shows two men playing chess. The father is questioning about a new car and designation of his prospective son-in-law. The father objects to her daughter staying in a rented home and this is where the son-in-law breaks the news – ‘ghar se leke khushiyan tak, sab kuch permanent hai’. The Tvc is aimed at youngsters, so they realize that to buy a home age is not a factor. It can be bought at any time and the youth should really give it a thorough consideration.

The second TVC motivates the consumers to think about owning a home instead of switching to a new rental home often. The ad shows a man complaining about changing his rented home 3 times in the past 5 years and talking about the problems that tag along in such situations. The message is lucid, ‘ghar nahi developer badlo. Temporary ghar ko ab permanent karlo’.

Govind Rai, Director, INIT  said, “Ajmera Realty wanted to make an impact with 1150 deliveries at one time. Being in the industry for years we know the importance of such a gigantic step. We offered them a unique strategy that would appeal to all classes of people and at the same time make them take notice of the brand.”

The next ad is aimed at the people who have bought a flat with Ajmera. In a meeting room a man is giving a presentation about the revenue and sales to his boss and team mates. However, he inculcates his new home and amenities in his dialogue. Everybody applauses and the vo comes as ‘Sabko pata hai ke khud ka ghar milna koi celebration se kaam nahi’. The idea behind the ad is the happiness that one can’t deny about owning a home. No matter who it is and where he lives or works at, it is the happiest day of his life when he buys a home and the lingering thought behind it – why can’t the next ‘he’ be you?

Dhaval Ajmera, ‘With the possession of 1150 homes we wanted to send a wave of happiness to our customers who would receive possession and also give people the hope that it is very much possible for them too. We are giving possessions in 6 projects all with different budgets and locations. Thus, conveying another fact that we offer a range of homes according to different target audience.”

The possession is being given in Ajmera Aeon and Zeon, New Era, Ajmera Stone Park, Ajmera Pristine, Villows and Ajmera Aria projects.

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Pune Smart City Targets Rs 100 Crore Grant From World Bank

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Pune Smart City Targets Rs 100 Crore Grant From World Bank

On the basis of designing performance-based programmes for smart city, the Pune Smart City Development Corporation Limited (PSCDCL) is eyeing for Rs 100-crore grant from the World Bank. The central government has set criteria to give out money which includes smart city projects their progress and execution. However, PSCDCL is losing out on the progress criterion as its launched projects are moving at a very slow speed.

Rajendra Jagtap, CEO PSCDCL, said, “We have decided to take part in the fast-track round to get grants for Pune’s smart city projects. There are three categories, which we need to fulfil. Except for some problems faced in the execution of projects and their progress, we are sure we are fulfilling all the mentioned criteria. The World Bank will be giving Rs 100 crore for every city in every state that fulfils the criteria. We are quite ahead in Maharashtra, compared to other cities in the state. So, we are confident of getting Rs 100 crore. Before I took charge as the CEO, there was a delay in floating tenders for the Smart City company. Therefore, there has been a little delay in execution and progress of the projects.”

“Owing to people’s protests against some projects, we faced a problem in starting and executing projects. The Aundh area street design project is one such example. Now, we have decided on people’s participation before starting projects in their area,” said senior PSCDCL official explaining reasons for a delay.

The 14 smart city projects that have kicked off are:

  • Livelihood through The Lighthouses of Pune;
  • Slum rehabilitation of Dr Babasaheb Ambedkar vasahat Aundh;
  • Street and pedestrian walkway;
  • Central command and control centre for public transport;
  • Vehicle health monitoring;
  • Passenger information through mobile app and website;
  • City common mobility card;
  • Traffic demand modelling project;
  • Pune maximum solar city;
  • Plastic bottle recycling project;
  • Smart lighting;
  • 100 percent grievance redressal system for water with the help of PMC care;
  • Quantified cities movement;
  • The garbage vehicle monitoring management system.

Out of these 14 projects, The Lighthouses of Pune, PMC care, plastic bottles recycling project, mobile application project and the central command and control centre for public transport project have been completed. Nonetheless, the remaining projects are still underway even after starting more than a year ago.

A screening framework has been prepared, comprising three sections — Part A, B and C in order to facilitate the screening of states and short listing of SPVs which are interested in participating in the Indian Smart Cities Programme. SPVs should be presented on November 30 after all information is furnished by the state. December 11 is the last date of receiving the submission from the state/union territory.

Also Read: Almost 52 Percent Of Residential Units Registered Under MahaRERA Remain Unsold: Report

 

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Special Reports

FS Realty Bags The 9th Realty Plus Excellence Awards (North) 2017

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FS Realty bags the 9th REALTY PLUS EXCELLENCE AWARDS (NORTH) 2017

RealtyNxt congratulates FS Realty for winning the Emerging Developer of the Year award at the 9th Realty Plus Excellence Awards 2017 (North). The First Stone Group is an Asset Management Company with an array of verticals and a single vision of integrating excellence and enriching people’s lives. First Stone Realty is its vertical which is doing some remarkable work in the real estate sector.

In the first year of its inception, the company has launched 9 projects and has over 6.5 million sq ft under construction. FS Realty is building upon those small desires and creating abodes that truly inspires a good life. Not only an innovative and forward-thinking company but it works with some of the best talents from the country and abroad which sets it apart from the rest.

All of their residential projects have a clearly defined niche which in turn targets a set audience. They offer a range of homes right from luxurious, royal and palatial living to budgeted, near to nature and customized homes. No matter what your dream home is, FS Realty has etched it to reality.

Charan Khangarot MD and CEO said, “It is very motivating when your efforts are not only noticed but also awarded. We thank the Realty Plus Excellence Awards for recognizing us. We could not have asked for more. Overwhelmed and boosted, there is a lot in store from FS Realty, the team is all the more excited to put its best foot forward”.

Their projects truly define their vision of ‘Shaping a better world’. FS Realty became the first developer in Rajasthan to get all their projects RERA compliant.

Jaypore – The Palatial Living, located in Vidhyadhar Nagar, is a project that offers ancient aristocratic flavors for modern day maharajas. It is an ultra-luxurious palatial abode that encompasses all the requisites of a royal home.

The Crown is a jewel located on the Tonk Road. It offers 3 and 4 BHK homes which provide the utmost luxury and solace at a price that will easily fit your budget. The Crest is spread in 65000 sq ft landscape surrounded by tropical gardens. It offers 3, 4 and 5 BHK homes located in Jagatpura.

Coronation offers customers meticulously designed 2, 3, and 4BHK apartments which have been exclusively customized to complement the taste of true connoisseurs. Pinnacle is 3 and 4 BHK apartments will impress those who wish to view the entire world beneath them. It stands 20 stories high and is set to become an architectural marvel with a panoramic view of the city.

FS Realty customers have genuine faith in the company and its projects because they offer complete transparency and even customize payment plans for them.

Also Read: INIT Mumbai Wins The Prestigious Realty Plus Excellence Awards 2017

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