12% Tax for purchase of new house
Posted on: 18/Jun/2017 11:49:10 AM
As per the GST to be implemented throughout the country from 1st July, the GST tax slab is on the higher side for buying new houses.
Presently, those who buy houses on EMI payments, pay service charges at the rate of 4.5%. However, under the new GST, this will be under the 12% slab.
This will naturally lead to an increase in the EMI (Equated Monthly Instalment).
Of course, it will also affect all the future house buyers very adversely.
An auditor explained about the new 12% GST slab that most of the people in the country buy houses only on EMI loans. They pay an advance to the builder and pay the balance to the banks as EMIs for the loan taken. Presently, this is charged service tax of 4.5%. However, this has been increased to 12% in GST system. A 12% GST will be charged for the total price of the new house. The EMI would be revised to include this 12% Tax.
So, the amount of EMI will be up. Also, those who had already bought houses will also need to pay this 12% GST for the remaining part of the EMI.
Apart from this, it has been decided to charge additional service charges while getting loans from the banks. Thus, this will affect all future house buyers and those who pay EMIs.
