New Delhi, January 31, 2019:
India is the fastest growing wealth market in the world with HNWI population growth at 20% so did their wealth in 2018 (Karvy India wealth report 2018). However, there is clear evidence that this category of Indians prefers to wait and watch before investing in physical assets. There is a perceived anticipation for long-term benefits of RERA, GST and Demonetisation; RERA brings in transparency and accountability on the part of all developers, in turn raising credibility of the industry at large. GST at this point is liable without any Input Tax Credit availability to end buyer- given that some relief is given in this regard- certainly it is much needed and welcome policy on behalf of the government to support the industry. Demonetisation has had a positive effect on the home loan rates due to increased liquidity in banking institutions.
On the builder’s end, sustaining through this liquidity crunch has forced us to absorb some of this GST burden. We have seen that even for genuine buyers and investors of aspirational real estate, the GST has been a pain point for buyers adversely affecting sales, as buyers have to settle for smaller sized properties, which may not be as aspirational. What we have experienced is that the Individual homebuyers cannot claim Input Credit on GST; we would like the Union Budget to offer some relief of GST on real estate by linking personal income tax to GST accrued on large Investments. At the same time, lower GST percentages and/or higher discounting for land value (Currently at 1/3 has been set) would be very helpful to the industry at large.
Corporate Comm India(CCI Newswire)
