In a huge relief for home buyers, Union Finance Minister Arun Jaitley announced reduction in Goods and Services Tax (GST) for affordable housing to 1 percent, from the previous 8 percent, in the 33rd GST Council meet on Sunday, 24 February.
Residential property priced at Rs 45 lakh or below will now fall under the category of ‘affordable’ and will be taxed at 1 percent, the GST Council announced.
The criteria for affordable housing in Bengaluru, Chennai, Delhi-NCR, Hyderabad, Kolkata and Mumbai MMR region, the finance minister said, will have carpet area of up to 60 square metres and will be priced up to Rs 45 lakh. As for non-metro cities, the criteria will be defined based on carpet area of up to 90 sq metres and cost up to Rs 45 lakh.
Arun Jaitley✔@arunjaitley
In its 33rd meeting the GST Council has accorded big relief to Real Estate Sector. GST rate on affordable housing has been reduced to 1% from 8% & for others from 12% to 5% for both without ITC.This will give boost to housing for all & fulfill aspirations of Neo/Middle classes.
“The Council has expanded the definition of affordable housing so that aspiring people can buy better houses,” Bloomberg Quint quoted Jaitley as saying.
The council has also slashed tax on under-construction residential houses to 5 percent from 12 percent, Jaitley said.
The new tax rates are expected to be implemented from 1 April 2019.
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