NHB bats for slashing GST rates for realty

It may turn out to be a major booster to the country’s real estate sector with the housing finance companies’ regulator National Housing Bank (NHB) currently negotiating with the finance ministry to lower the effective Goods & Services Tax (GST) from the current 12% rate. In this connection, the regulator is factoring the lowering of land prices that could ease the tax burden and help in prop up residential sales, said sources. They added that the regulator is likely to push for lower GST rates for affordable housing category especially although the general category, which is also under consideration at an effective rate of 6%. Real estate builders have also recently met finance and housing ministry officials to suggest a similar change in the current GST rate. Currently, under-construction properties attract 18% GST and allow abatement of one-third of the apartment value towards land cost taking the effective tax rate to 12%. Sources further added that housing regulator is of view that at least low-cost and affordable housing need to be given the benefit of lower rates.