New Delhi: Ahead of the general elections, the GST council on Sunday slashed the rates of under-construction houses to 5 per cent from 12 per cent. Similarly, the GST on affordable houses has been brought down to 1 per cent against the current 8 per cent.
The move would boost buying of under-construction houses as the current GST rates forced buyers to go for ready-to-move-in properties.
The 33rd reconvened meeting of the Goods and Services Tax (GST) reduced the rate of affordable housing to one per cent from eight per cent.
Currently, the GST is levied at 12 per cent on payments made for under-construction property or ready-to-move-in flats and in cases where completion certificate is not issued at the time of sale. Tax, however, is not levied on buyers of real estate properties for which completion certificate has been issued at the time of sale, Finance Minister Arun Jaitley told reporters after chairing the meeting.
The move will give a boost to the real estate sector, and make housing affordable for middle class, neo-middle class and aspirational class, Jaitley said.
The revised GST rates for real estate sector will come into effect from April 1, 2019.
Earlier, a panel of ministers on real estate sector led by Gujarat deputy chief minister Nitin Patel had suggested bringing down the rates on under-construction properties to 5 per cent, without input credit, from 12 per cent and for affordable housing, 3 per cent from 8 per cent.
