New Delhi: The GST on under-construction residential houses has been slashed to 5% from current 12%. Similarly, the GST on affordable houses has been brought down to 1% against the current 8%.
The announcement was made by finance minister Arun Jaitley on Sunday.
“In its 33rd meeting the GST Council has accorded big relief to Real Estate Sector. GST rate on affordable housing has been reduced to 1% from 8% & for others from 12% to 5% for both without ITC.This will give boost to housing for all & fulfill aspirations of Neo/Middle classes,” Jaitley said.
Earlier, a panel of ministers on real estate sector led by Gujarat deputy chief minister Nitin Patel had suggested bringing down the rates on under-construction properties to 5 per cent, without input credit, from 12 per cent and for affordable housing, 3 per cent from 8 per cent.
The move was not implemented as non-BJP ruled states had opposed announcing of the decision in their absence in the last meeting, held through video conference. Interim finance minister Piyush Goyal had favoured a cut in tax rates for real estate.
A PTI report had said that the move would boost buying of under-construction houses as the current GST rates forced buyers to go for ready-to-move-in properties.