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What is the Impact of GST on Real
Estate Sector
How will GST Impact Real Estate?

GST, which is one of the longest awaited tax reforms and has got
unanimous permission from both houses of parliament.

We know that real estate sector provides about 7.8% to India’s GDP and
real estate is the second largest employment generator. The enactment of
this tax law will alone explain the challenges faced by the real estate
industry and support the sector to come out of its long rest.
GST Impact Real Estate

The impact of GST on real estate in
terms of outflow for developer &
consumer will depend on the last rate
of GST.

Major thing is to know what will be the
final rate of GST because if the rate is
larger than the current rate, then it will
raise the final value of purchasing the
home.
Impact of
GST Bill on
Real Estate
GST Impact Real Estate

GST will decrease the value of purchasing
houses for buyers as they have to pay
Service Tax and VAT on purchase of
residential unit when booked previous to
their completion, developers have to give
excise duty, custom duty, CST, Entry tax
which is non-creditable tax cost, on their
professional side, which is covered in the
cost of units.

The GST regime is intended to replace all multiplication of taxes and the
builders will have to pay a larger amount in the 4-tier taxation but would
take input credits eventually.

The GST will be applied to the materials that is required by the builders
for completing the residential projects. So, it will immediately affect the
overall cost of building construction.
conclusion

The impact of GST on real estate sector is very much likely to be in the
hands of buyers as the rate of tax can certainly delight with its economical
zone. However, no pre-assumption can be made in the scenario as the
real estate sector is a highly volatile industry and can fluctuate with high
frequency.
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