If M Venkaiah Naidu has his way, the stamp duty on affordable homes may soon be abolished. He spoke about this while addressing the Confederation of Real Estate Developers’ Associations of India (CREDAI).
Stamp duty is a state subject, with the Ministry for Urban Development and Housing writing a letter to all states to exempt affordable houses from it. Stamp duty envisages a transaction has occurred between a buyer and seller and ranges between 4% and 11% of the property value.
Homes under the affordable housing scheme enjoy service tax exemption as well. Service tax rates are around 5.35% of the property value (at the time of sale). This scheme is implemented under the National Mission for Urban Housing.
He also stated that the government is keen to ensure there is no increase in tax in the housing sector. One key point he stressed on was the Goods and Services Tax (GST), which the Centre plans to implement it in July. This tax will eliminate cascading effect of tax, helping entities save on it, reducing confusion regarding multiple tax tiers as well.
While stamp duty has not been included under the ambit of GST, the Ministry of Urban Development and Housing has sent a recommendation to the Ministry of Finance asking for exemption of service tax on affordable homes.
Additionally, he also stressed on including the real estate sector under GST, stating that this would benefit the industry by avoiding cascading of tax.
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