Housing sales to rise if GST reduced on under-construction flats: CREDAI

Realtors body CREDAI Friday said housing sales will rise if GST rate on under-construction flats is reduced to 3 and 5 per cent as likely to be recommended by a group of ministers under the GST council.

A panel of state ministers Friday favoured lowering GST on under-construction residential properties to 5 per cent, from 12 per cent currently.

The Group of Ministers, under Gujarat Deputy Chief Minister Nitin Patel, was set up last month to analyse tax rates and issues/challenges being faced by the real estate sector under the Goods and Services Tax (GST) regime.

In its first meeting, the GoM also favoured slashing GST on affordable housing from 8 per cent to 3 per cent.

Reacting to the development, CREDAI President Jaxay Shah said people will start buying homes if GST rates get reduced.

He said people are currently postponing their decisions to buy under-construction flats because of high GST rate of 12 per cent and 8 per cent on affordable homes.

The move is aimed at reducing the impact of GST on the end-consumer and simplifying the compliance requirements on the developer, Shah said.

The growth in volume of housing sales will add to the advantages of GST regime and spur real estate led economic growth, he said.