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real estate

Priya Kashyap (Student) (7053 Points)

06 March 2019

how can buyers avail the benefit of tax reduction on affordable housing for the new GST rate of 1%????

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CA CS Chirag (Practicing CA) (834 Points)
Replied 06 March 2019

The finance minister said that currently GST is levied at 12 per cent on normal residential houses and 8 per cent on affordable homes, after considering one-third abatement on account of land cost. The Council has decided that after removal of ITC, the rates will be 5 per cent for normal housing properties and 1 per cent for affordable housing
the GST Council, on February 24, 2019, slashed tax rates for under-construction flats to five per cent and affordable homes to one per cent, effective April 1, 2019. Currently, the Goods and Services Tax (GST) is levied at 12 per cent with input tax credit (ITC) on payments made for under-construction property or ready-to-move-in flats, where the completion certificate is not issued at the time of sale. For affordable housing units, the existing tax rate is eight per cent.

For the properties for which construction already begun transitional provisional will be notified soon.

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pritesh (CA Final student) (7101 Points)
Replied 06 March 2019

33rd GST Council Decisions: *GST on Real Estate*

1. GST Council clears the proposal of lowering GST rates in real estate; Council clears the proposal of levying *5% with out ITC for non-affordable housing & 1% without ITC for affordable housing*:

2. Sources add that in terms of cost, council decides to consider residential properties with cost of Rs 45 lakhs as affordable & In terms of size, 60 sqmts for metros & 90 sqmts for non-metros to be considered affordable housing.

*Effective from 1st April 2019*