CREDAI Bengal Chapter has said that new property tax will make property transactions costlier. It will adversely affect property transactions as well as the realty sector.
KOLKATA: The state government of Bengal has proposed new tax on property transactions. This was presented in the Finance Bill 2013.
The proposal has been harshly welcomed by the CREDAI Bengal chapter which stated that this bill would hit the property transactions in the state.
The Confederation of Real Estate Developers’ Association of India also said that this will not only affect property transactions but also the realty sector as a whole.
The valuation of the properties is not accurate. Further the state authorities have given the valuation which is far higher than the actual market price.
As the valuation is higher than the actual prices, the property owners are to pay higher tax. Moreover they will have to pay additional taxes in case of any property transactions.
The central government has initiated a new tax on property transactions and purchases. Under this new system too, the tax is levied on the basis of assessed valuation. It is, however, different from the newly proposed tax system in Bengal.
Under the central government’s proposal the tax is fixed on the sale price of the property. The tax is not levied on the property on the basis of sale-price at the time when the project was under-construction.
Harsh Vardhan Patodia, CREDAI Bengal chapter chief, said that the developers in the state are highly affected by this. He added that in most of the cases the valuation is far above the actual prices.
The developers say that this new property tax will affect both buyers as well as developers. The property transactions will fall down, leading the developers into greater doom.
Once the valuation is higher than the actual prices, the buyers will have to pay additional stamp duty. The registration will become costlier. Realty developers fear that there will be no property transactions in the state.