Union Finance Minister Arun Jaitley announced reduction in Goods & Services Tax (GST) for affordable housing to 1 percent, from the previous 8 percent, in 33rd GST Council meet. Residential property priced at Rs 45 lakh or below will now taxed at 1 percent. Slashed tax on under-construction residential houses to 5 percent from 12 percent. The new tax rates will be implemented from 1 April 2019.
The move has been taken to boost the residential segment of the real estate sector, a statement released by the Finance Ministry stated.
“Real estate sector is one of the largest contributors to the national GDP and provides employment opportunity to large numbers of people. ‘Housing for All by 2022’ envisions that every citizen would have a house and the urban areas would be free of slums. There are reports of slowdown in the sector and low off-take of under-construction houses which needs to be addressed,” the statement read.