Real Estate Sector Wants FM To Lower Costs Of Finance

Real estate players of India hope that Finance Minister’s upcoming budget will bring down the costs of finance for the construction sector. Finance minister is likely to announce new Budget which is expected to boost the real estate sector on February 28.
real estate sector wants Financial Minister to lower the financial costs.

Real estate sector wants Financial Minister to lower the financial costs.

Real estate developers expect that the new budget which the Finance minister of India will announce on February 28 will contain provisions to boost the real estate sector. Builders and other realty players expect the cost of finance for the construction will be brought down by the new budget. They demanded that it will be enabling them to provide housing units at lower costs.

Real estate developers are also hopeful of faster clearance for their projects. Many at a time, the delay takes place due to the longer time taken for gaining the clearance. The delay in gaining clearances leads to delayed deliveries. Further the cost also gets accelerated in meantime, developers claimed. All these affect home buyers onto whose shoulders the additional cost is loaded. Continue reading

CREDAI Report on Application of Service Tax

Tax Service
According to CREDAI, the Confederation of Real Estate Developers Association of India, due to the application of service tax as per the union budget 2010, the property prices will experience an increase.

All of us are aware of the fact that this service tax has come into effect since July 1. For those who don’t, a quick recap says that an introduction of “deeming provision” took place in Union Budget 2010 which brought realty within the horizon of service tax.

According to the president of CREDAI, Mr Chitty Babu, there will be an increase of around 2.5% in property prices on account of the levy. Additional to this, in locations like Tamil Nadu where land registration and sale of building are done separately, a hiatus of 66.3% has been granted, thus, service tax will be applicable on the balance.

Finally, this whole tax would come just on the shoulders of buyers. This fact has even been admitted by some developers that they would charge extra from the buyers themselves to pay this tax.

What Should the Buyers do?

Delhi Properties - Real Estate India - Unitech Location
The apartment buyers were already burdened by the day by day increasing property rates, and now come another burden to their door. Since last month, many developers have been demanding the buyers to start paying up the service tax announced in Union Budget, 2010, i.e. a 2.5% tax.

However, this service tax will be imposed only on the under construction residential project or where the building has not yet received its occupation certificate. Some sources revealed that some developers admitted that they asked purchasers to pay this tax.

On the other hand, buyers say that they were not told about this additional taxation at the time of booking of flats. A market source told that although the buyers are raising voice against this game played by builders, but they do not have much choice. As they are forced to pay the development charges, society fees, hefty parking charges and other various charges, they will have to pay this tax too.