According to the property consulting firm, tax on properties may not increase under the new tax regime. The general perception was that with the 12% GST rate, the tax would go up from 5.5%.
Knight Frank, India’s Chief Economist and National Director (Research) Samantak Das said “We expect there will not be any upward impact of tax burden on buyers for under-construction projects after the rollout of GST. Apparently, with the 12% GST, there is a difference of 6.5% on tax rates as compared to the pre-GST rate of 5.5%. But a lot of efficiencies have been brought in through GST”.
Developers are working on the new tax regime and trying their level best not to pass on any extra tax burden to home buyers. It is expected that there will be no adverse impact on the buyers with the implementation of GST. While if tax burden will pass on to the buyers then it would result in a drop in sales.
Das added that “For new projects, it is expected that base prices would be revised so that post GST, price value of homes remains the same as in pre-GST era”.