GST rates on housing slashed: Details here

Business

24 Feb 2019

GST rate on affordable housing slashed from 8% to 1%

In a big favor to home buyers, the GST Council, on Sunday, slashed GST on affordable housing to 1%, down significantly from the previous 8%.

Further, the Council also also lowered the GST rate on other under-construction housing properties to 5% from an effective 12%.

The decisions came at the 33rd meet of the GST Council.

Here are the details.

The rates come into effect from April 1 this year

"We wanted to give a boost to the real estate sector as well as give relief to the middle class, neo-middle class and the aspirational middle class class. This will come into effect 1 April 2019," Finance Minister Arun Jaitley told reporters.

Affordable housing

Which properties are considered affordable housing

Which properties are considered affordable housing

Properties which have a maximum price of Rs. 45 lakh, and have carpet area of up to 60 sq meters in metro cities, or up to 90 sq meters in non-metro cities will fall under the 'affordable housing' slab and will be charged 1% GST.

Under-construction properties that fulfill the aforementioned criteria will also fall under the affordable housing slab.

Love Business news?

Stay updated with the latest happenings.

Yes, notify me

However, taxes cannot be adjusted

However, there's a catch. Unlike the case earlier, builders will not be able to adjust taxes paid on raw materials like cement and steel with the final tax liability on under-construction housing projects.

Other details

Builder lobbies had long been demanding a tax reduction

The decision by the GST Council to slash taxes on housing is broadly based on the recommendations of a ministerial panel headed by Gujarat Deputy Chief Minister Nitin Patel.

It also comes on the backdrop of long-standing demands by builder lobbies like the Confederation of Real Estate Developers' Association of India (Credai) and the National Real Estate Development Council to slash GST rates.

Share this timeline

Affordable housing

Arun Jaitley

GST

GST Council

Real Estate

' Association of India

Confederation of Real Estate Developers

Finance Minister Arun Jaitley

Gujarat

Gujarat Deputy Chief Minister Nitin Patel

National Real Estate Development Council

Nitin Patel

Real Estate Developers

Share this timeline

Ask NewsBytes
User Image

Next Timeline