The economy has been affected globally due to the Coronavirus pandemic. As a result, both the real estate markets and investors have been experiencing a slump like never before. In the effort to stimulate the market, the Government of India has reduced the GST rate on real estate and its transactions significantly. As a result of this move, it is believed to have a positive impact of GST on home buyers and real estate agents. Let’s cover how GST has affected real estate and home buyers.
The Impact GST has on Real Estate
It has been reported that the real estate industry in India contributes between 6 and 8 percent of India’s Gross Domestic Product (GDP). It is just second to India’s GDP from the IT industry to employment generation. Hence it is evident that the Government of India will take the impact of GST on real estate seriously. As a result, the changes have enabled the real estate industry to enjoy:
Decrease In Construction Cost
With the introduction of GST, multiple taxes were subsumed under a single tax allowing developers to enjoy increased selling prices. The cost of logistics has also decreased while consumers are looking for already constructed properties. Top builders in Pune and everywhere are using this benefit to sell more properties while getting back into the business post-pandemic.
This new process has given more transparency to the real estate agents and accountability to every person involved in the business. As a result, the new GST rules have increased the faith among the buyers, which is beneficial for the industry.
The GST has changed how the real estate market performs. Exempting the residential properties that are used for rental has benefited the market considerably. Also, the process has gained significant popularity among homeowners and even real estate agents.
The Impact of GST on Home Buyers
Any prospective buyer looking for a constructed property in India has experienced a positive impact of GST on homebuyers. Some of the benefits that real estate builders in Pune can offer home buyers with the GST in place are:
Properties categorized under affordable housing enabled buyers to enjoy the benefit as the taxes were dropped for the category. Therefore, the decline in the price of affordable housing will have a positive impact on the buyers.
The GST rules placed for the buyers of non-affordable housing have led to increased sales in constructed properties. Though the change is not as significant as affordable housing, the overall cost for non-affordable housing has decreased, thus allowing new home buyers to purchase the properties.
Move Towards Constructed Properties
As real estate developers were building new properties, and due to the financial instability, people stopped purchasing. However, the GST is reduced for already constructed properties. As a result, the already constructed house became more affordable. As a result, there has been a significant tilt in the market where buyers opt for constructed properties. This has proved to be beneficial for both the buyer and the real estate industry.
As a home buyer, if you are looking for constructed houses in Pune and nearby areas, choose the real estate agent with care. Find a trustworthy developer, and you can enjoy your dream home while saving money with the new GST rules in place as a homebuyer.