Realty implications: Homebuyers may see some rise in prices after GST

A higher rate may offset benefits for an under-construction property

Homebuyers could see a rise of 1-3 per cent in overall cost under the new indirect tax regime.

The goods and services tax (GST) has brought the real estate sector partially under its ambit by taxing works contracts at 12 per cent, exclusive of stamp duty. 

“Under current service tax, with abatement rules, the effective service tax for under-construction properties is 4.5 per cent. Over this, states have value-added tax (VAT) of 3.5-4.5 per cent. The total is not more than 9.5 per cent in any state,” said Anuj Puri, chairman, Jones Lang Lasalle Residential (JLLR).

Currently, real estate taxation