The Government of India has reduced the GST taxes of Under-construction houses from 12% to 5%. They also reduced the tax imposed on affordable houses to 1% from 8%. This Reduction will be effective from April 1.
So, What are affordable houses? Houses which costs up to Rs 45 Lakh and with a carpet space of 60sq meters in metro or 90sq meters in non-metro are considered as Affordable Houses. This move by the GST council will prove to be beneficial for the middle-class families and there will not be an input tax credit for materials such as cement, steel etc.
A huge benefit for real estate buyers as they were deterrent to buy under construction houses at the previous GST rates. Since now the taxes are reduced it’s a good time for people interested in real estate investment. Officials say that the decision was based after suggestions of a panel led by Gujarat deputy Chief Minister – Nitin Patel.
Cities that are designated as metro cities are Mumbai, Chennai, Bengaluru, Hyderabad, and Kolkata apart from Noida, Greater Noida, Delhi, Ghaziabad, Faridabad, and Gurugram.