Affordable Housing Redefined? Proposed GST Could Boost Budget Homes
- 3rd Nov 2024
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The GST Council’s Group of Ministers (GoM) is proposing to redefine affordable housing by raising the price threshold from ₹45 lakh to ₹55 lakh. If approved, this move could provide a significant boost to budget homebuyers, aligning GST benefits with rising property costs and supporting broader housing accessibility across India.
Key Proposal Highlights
Affordable Housing Limit Raised: The Group of Ministers (GoM) has suggested raising the affordable housing price cap to ₹55 lakh from ₹45 lakh. This change could unlock more accessible homeownership for middle-income buyers.
GST Rates: Currently, affordable housing enjoys a reduced GST of 1%, while other housing projects are taxed at 5%, with no input tax credit available in both categories.
Luxury Tax Revision: The GoM may recommend a higher GST rate on luxury homes priced above ₹15 crore.
Joint Development Agreements (JDA): No GST relief is expected for JDAs.
Context & Timeline
Current Affordable Housing Definition
Established during the 33rd GST Council meeting in February 2019, affordable housing is defined as flats with up to 90 square meters of carpet area in non-metropolitan cities (or 60 square meters in metropolitan areas) valued at a maximum of ₹45 lakh.
Next Steps
The GoM, led by Goa’s Chief Minister Pramod Samant, met last week and will soon submit their recommendations. The final decision will be taken by the GST Council in their next meeting, tentatively scheduled for mid-November. Key Figures in the GoM
Members
The committee includes prominent ministers like Bihar’s Deputy CM Samrat Choudhary, UP’s Finance Minister Suresh Kumar Khanna, Kerala’s Finance Minister KN Balagopal, Maharashtra’s GST Council representative Aditi Tatkare, Punjab’s Finance Minister Harpal Singh Cheema, and Gujarat’s Finance Minister Kanubhai Mohanlal Desai.
Disclaimer: This summary is based on current information and may change following the GST Council’s final decision.
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