Indian real estate developers' apex body CREDAI today sought a 60 per cent abatement for land in at least 12 cities to reduce the effective GST rate as part of its wish list to boost demand for under-construction flats.
Indian real estate developers’ apex body CREDAI today sought a 60 per cent abatement for land in at least 12 cities to reduce the effective GST rate as part of its wish list to boost demand for under-construction flats. At present, the effective GST rate on under-construction flats is 12 per cent after land abatement of 33 per cent. However, affordable housing attracts only 8 per cent GST. There is no GST on ready-to-move-in apartments.
“We have demanded that abatement for land should be 60 per cent in 12 big cities from the current 33 per cent,” CREDAI-National President Jaxay Shah said at a global conference here. He said the land cost in these 12 cities, including four metros, are high. Bengaluru, Hyderabad, Pune, Jaipur and Ahmedabad are among these 12 cities.
“In big cities, land accounts for 60-70 per cent of the overall project cost,” Shah said on the sidelines of CREDAI-NATCON conference.
Shah said the association has already taken up this issue with the government and is hopeful of a positive response. He also raised concern about some provisions in the new real estate law RERA like title insurance.
The CREDAI President said that there has been an increase in demand for affordable housing. However, he said the government should allow bank finance for purchase of land to develop affordable housing projects in order to boost supply and meet huge demand in this segment.
Shah said the housing sales in the first six months have gone up by 25 per cent as per the joint report by CREDAI and JLL India. The private equity investment in real estate is also very high. “The rise in market confidence needs more Government support with relaxation in certain norms and we will continue to work with the relevant authorities to drive its growth,” he added.
“The CREDAI – JLL report’s findings that sales have risen 25% y-o-y, makes it evident that we have succeeded in nurturing an ecosystem of growth in Indian real estate,” CREDAI Chairman Getamber Anand said.
In its 18th global conference, more than 1,000 builders from across India participated. Overall, CREDAI has more than 10,000 member developers.