Exemption from the Service Tax May Not Affect Property Prices

September 3, 2007	(1 votes, average: 4 out of 5)  Loading ...
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The exemption from the service tax net may lead to a rise in buyers’ purchasing power. Investors also predict the possibilities of a downslide in property prices. However, builders have mixed responses; most of them share the investors’ notion.

The city builders had not loaded the service tax on the existing property rates. Hence, the service tax is not likely to affect the property rates, feel construction majors.

Upholding the argument, Mr. S.R Kulkarni, President of Marathi Bandhkam Vyavasayik Sanghatana comments that the property buyers generally calculate the possible service tax they might be require paying in future.

However, experts predict the service tax to break property prices as it was too high at 12.5% of the value of agreement minus the cost price of land. Paying such a prohibitive tax will certainly influence buyers’ budget. The service tax for the flat with a price tag of Rs 30 lakh is estimated to be over Rs 5 lakh.

Most builders are thinking to take an undertaking from buyers saying that they would pay the tax in case it is made applicable. They are also considering appealing all PBAP members to refund the money to buyers after the case is withdrawn in the High Court.

News Published Under:   Real Estate India |

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