Will GST Help Property Buyers? - Home Loan Blog - Tata Capital

Will GST Help Property Buyers?

Mar 10, 2017

Implementation of Goods & Services Tax (GST) is one of the key objectives of current government, and rightly so. It is being hailed as one of the biggest economic reform since 1991. And if estimates are to be believed, then it is expected to add about 1-2% to India's GDP in few years.

But all that macro level thinking is fine. You as a prospective property buyer are more concerned about how it will impact you. Isn't it?

What you want to be answered is that does it make sense to purchase the house before implementation of GST or after it?

But unfortunately, there is still a lot of fog around GST in general. Many experts are still not clear about a lot of things as government itself is yet to come out with sector specific details.

Currently, the two main taxes levied on real estate transactions are service tax and VAT. But how both these taxes will be combined into one and implemented as GST, especially in case of real estate transactions is anybody's guess.

The government will definitely miss the 1st April 2017 deadline for implementation. But even then, it will happen sooner than later. Many are of view that even though GST will be a big positive for the economy, it will not have much impact on property prices. There as it is a slowdown in real estate sector and lack of demand. So frankly, its still too early to say anything about the actual impact of GST on property prices and home loans.

If you are a buyer and want to purchase a house for personal use, then you might not have much leeway in terms of timing your purchase. But if you are an investor in real estate, it might make sense to wait for some more time to see what emerges from GST implementations.