Planning to sell your property? This is how GST will impact the deal

The decision to sell property must depend on your financial requirements and the price you are getting

Are you planning to sell your property and are unsure of the impact of the new Goods and Services Tax (GST) on it? What would be the impact of the tax on the sale transaction?

According to experts, GST does not apply for resale properties that have received occupation certificates. The seller will, however, have to pay stamp duty and registration charges that were in existence even before June 30. Both these charges vary from state to state.

However, if a seller wants to dispose of a property that is still under construction, that will attract GST. “The existing owner will not have to pay GST on the amount paid to the developer before June 30 but all payments made to the developer after July 1 will attract GST. All subsequent payments to be made to the builder by the new owner after July 1 will attract GST,” says MS Mani, partner, Deloitte Haskins Sells LLP.

The rate of GST for buyers wanting to buy under-construction and new projects has been fixed at 12 percent. Buyers of under-construction projects will be taxed at 12 percent on that portion of work that is completed after July 1. But levy of GST at 12 percent by builders would also enable developers to avail input tax credits on their purchases of goods and services that are used after July 1 and pass on the benefit to homebuyers.

Your decision to sell property should entirely depend on your financial requirement or other reasons for which you wish to dispose the property. The decision to sell a property is not influenced by GST but other factors such as the price he is getting for it. “If you are getting a higher price or are desperate to sell because you are in need of money, you should go ahead. Otherwise, you should hold on,” he advises.


“If the project has received an occupation certificate, wait for people to move in, you should sell once the towers get 10 to 20 percent occupancy as that helps improve pricing,” says Anckur Srivasttava of GenReal Advisers.

“In any case, the time before the second half of 2018 may be a good time to sell as after that the markets may go in for a political flux before the general elections and no changes in prices are expected, they are expected to remain more or less stagnant,” he says.

"Just as a developer is compelled to sell at a discount in the current market conditions, a homebuyer may also have to sell his property at a discounted price. It is highly unlikely that you will get a good price now. So, sell only if you are in great distress and need the funds,” advises Gulam Zia, ED, Knight Frank (India).
first published: Jul 18, 2017 12:34 pm

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