Faizan

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Reduced GST rates, Now you have one more reason to buy a home

There is expected to receive a major boost in demand for Residential properties, following the government’s decision to cut the goods & services tax (GST) rates to 5% from effective rate of 12% for the under-construction projects. The government has reduced the GST in a major push to the affirmed objective of ‘Housing For All by 2022’ to marginal 1% for affordable housing while revising the definition of under-construction homes.

Prior to this declaration, the under-construction residential houses attracted rate is 18% and the effective rate is 12% after factoring one-third abatement for the value of the land/ground. The effective GST rate for affordable home was 8%. Ready houses/apartments that have received an occupancy certificate (OC) do not attract GST.

The government is focused on its schema of pushing affordable homes, which is visible in the decision of the government to reduce the GST to a mere 1% for this segment. The lower tax burden on home buyers is expected to push demand in under-construction homes which, in turn, will keep builders to build more affordable homes.

The reduction in the GST for under-construction projects is the most decisive move that will encourage the demand and sales of property and will give the necessary tonic to the demand in the under-construction sector, which has been suffering from low sales levels for last many years.

Aspiring homebuyers now have a more and better range of options to choose from, as the definition of affordable housing is widened, more builders can mobilize projects across the country.

According to experts, the reduction in GST rates with an expanded definition of affordable housing, combined with incentives proposed in the budget and the reduce the prime lending rates by the Reserve Bank of India, supports the sops for the under-construction residential real estate market.

The much-awaited reduction in GST can reduce the buyer’s payout by 6% – 7% on overall purchase, depending on the category.

 

February 25, 2019 / by / in
RBI will make loan affordable & give a boost to the economy
The rate cut by the RBI will give a boost to the Indian economy by providing affordable Loans to small businesses and homebuyers Said by Finance Minister Piyush Goyal.
RBI’s decision to reduce the repo rate by 25 basis point from 6.5 percent to 6.25 percent and change of stance to ‘Neutral’ will give a boost to the economy, lead to affordable credit for small businesses, homebuyers etc and further boost employment opportunities,” Goyal said in a tweet.
It is a very balanced and pragmatic policy statement said by Economic Affairs Secretary Subhash Chandra Garg with Welcoming the RBI’s decision.
“Assessment of growth and inflation is quite realistic and underlines low inflation and high growth path for India for 2019-20. Welcome change of stance to neutral and rate cut by 25 bps. Also welcome removal of FPI restriction,” Garg tweeted.
It was fixed that no foreign portfolio investor (FPI) should be given an exposure of more than 20 percent of its corporate bond portfolio to a single corporate, including exposure to entities related to the corporate. As a part of the review of the FPI investment this was decided in corporate debt undertaken in April 2018.
Exemption were given to FPIs from this requirement till end-March 2019 to adjust their portfolios on their new investments.
The RBI in its sixth bi-monthly policy said it is now proposed to withdraw this exposure limit, In order to encourage a wider spectrum of investors to access the corporate debt market.
February 8, 2019 / by / in , , , ,