GST
GST and Real Estate in India
GST Impact on Real Estate
The Goods and Services Tax (GST) is a progressive tax change replacing the previous complex tax structure. It significantly impacts the real estate sector, which accounts for about 5% of India's GDP and is the second-largest employer in the country.
Key Points
- Under-construction properties taxed at 18% (9% SGST + 9% CGST)
- Effective tax rate of 12% after land value deduction
- Stamp Duty and Registration charges are outside GST
- Simplified taxation process for buyers
- No GST on completed properties with Completion/Occupation Certificate
Important Things to Know
- GST aims to bring efficiency into the tax system
- 12% GST levy, but buyers should understand Input Tax Credit (ITC)
- No GST on renting residential property
- GST applicable on commercial property rent exceeding Rs 20 lakh annually
- No change in stamp duty and registration costs
Implications of GST on Real Estate
GST has simplified the taxation process for real estate transactions. It reduces ambiguity and replaces multiple taxes with a single tax. The impact varies depending on the property type and stage of construction. Buyers and developers should be aware of the new tax structure to make informed decisions.
