Real estate players are planning to absorb the post-GST additional tax burden of five to six per cent post to prevent further slump in sales as demonetisation hangover continues in the sector.
“We had talked to several builders and all of them are trying hard to absorb the additional tax burden of five to six per cent due to GST,” Knight Frank chief economist and national director Samantak Das said.
“Already sales volume on a national level of the first half of 2017 (Jan-June 17′) is down by 11 per cent and in Kolkata it is down by 22 per cent. If additional tax burden is passed on, then sales will further dip,” he said.
GST on real estate is 12 per cent and in the pre-GST period, taxation was about six to seven per cent. New launches of properties have crashed 41 per cent, lowest in the last seven years of the first half average in top eight cities of the country, Das said adding, in Kolkata, new launches have declined by 18 per cent. In the city, Rajarhat emerged as the area with highest number of residential units launched in the first half of 2017, accounting for 36 per of all new launches in Kolkata.
Das said Kolkata residential market continues to be sluggish in the absence of a strong service sector.
“With RERA and GST in place, global funds will find more confidence toward Indian real estate market,” he hoped.