GST AND RERA HAVE BEEN A GAME CHANGER FOR REAL ESTATE

The real estate sector with the roll-out of game-changing policies such as GST and RERA has emerged  out as a  strong  market. Demonetization’s impact started to taper off slightly, while real estate investment trusts (REITs) did not take off this year as expected. Affordable housing came out of the shadows and affordably-priced units have been selling like hot cakes in most cities. India’s Tier 1 cities are expected to move up from their current 36th rank in JLL’s 2018 Global Real Estate Transparency Index (GRETI) on the back of continued improvements in structural reforms, implementation of RERA and GST aimed at making India a modern economy. The GST regime has shown up as a transforming tool for the real estate market.  The real estate sector has experienced a tough time in the past years consistently.  The GST has eliminated the complicated multiple taxation system and has brought simplified taxation process into the picture. Both the buyers and the interested buyers are taking this enactment as a good news.  Sources have suggested that  National Real Estate Development Council (NAREDCO) believes that the 12% GST on the projects undergoing construction will boost the sector.

“The GST is definitely one of the biggest reforms which have made the taxation process simpler and transparent for all. There would be one simplified tax instead of the number of taxations. The tax on tax element has been removed from the picture which is the  biggest ease up for all of us. The icing on the cake is that the GST council is keeping the affordable housing plan in mind so that there are no complications seen while executing the low-cost housing projects.  There are developers and other private body members who have time and again requested the council to reduce land prices and work upon making the residential property easily accessible for the lower margin groups. The lack of transparency in the prior taxation system was amid things that kept the interested buyers in a dubious state.  After the enactment of both GST and RERA, the buyers won’t have to ponder much while going for the desired investment  of land or property. The RERA is bringing in the transparency in the real estate sector which was much needed. Being a developer, it’s important for us to have credibility and accountability amid the investors and such law enactments help us do exactly the same” says Pradeep Aggarwal, Chairman, Signature Global.

Its clear that the GST council has kept the affordable housing policing in mind so the new taxation regime would be beneficial to all. The prior multiple taxation process was complicated for both the buyers and us. Moreover, the lack of transparency related to the tax charges used to keep most of the investors unresolved. Now, after the enactment of GST, the investors and buyers don’t have to knit their brows while purchasing any land or property. It’s indeed a positive change as both the newly introduced enactments; RERA & GST are working in the same direction by assuring transparency and credibility in the real estate sector.