Property prices may escalate, claim builders

With the introduction of the Goods and Services Tax (GST), the real estate business will be hit in the coming few days, claim builders and brokers. They, however, add that GST will clean the industry of malpractice and there will be an influx of buyers soon. They hint that real estate prices may also escalate.

Builders and brokers need to have a GST number to carry out sales, while some have already got it, many are still in the process of acquiring one. The present tax rate is between five to six per cent. Under GST, the real estate sector is set in the 12 per cent tax slab, which will be the main reason for prices escalating claim builders.

"GST is the third tool unleashed by the Centre, after demonetisation and RERA, to clean up and simplify buying of real estate in India. Although this has affected the real estate sales for one to two months, we are confident that each initiative will have a major impact of pulling the sector out of its current troubles," said Sunil Mishra, Chief Strategy Officer, makaan.com

Manohar Shroff, Vice President, MCHI-Navi Mumbai claims that there will be a transparent market soon and consumers will benefit at the end of the day. "Builders will be affected and will charge more taxes. But home buyers will understand all of it and the situation will be clear," he said. Meanwhile, brokers claim that this Diwali will not prove beneficial as it will take that much time to clear the confusion.