Know 5 Policies Announced In 2016 That Shook Real Estate
The realty sector has a very surprising year-end with regard to the policies that have been announced by the Central Government. All the policy announcements have sent the whole sector into frenzy. Some have welcomed the government's move and some others are treading carefully with measured steps. Here are some of the policies that have had a major impact on the real estate sector.
Demonetisation of Rs 500 and Rs 1000 currency notes
The reason given for the sudden decision of making the currency notes of the Rs.500 and Rs. 1000 denominations to be illegal was to put an end to black money. The demonetisation in future would align with the Real Estate (Regulation and Development) Act 2016, RERA announced earlier in the year.
Service tax exemption on affordable housing construction
All the affordable houses constructed in an area of up to 60 sq mt under the scheme of State Government or the Central Government including Public Private Partnership (PPP) scheme would boost the construction in the affordable sector. The exemption in the service tax would encourage the alliance between the public and private sector.
Implementation of Goods and Service Tax (GST)
The real estate sector is still speculating if they will come under the purview of GST and whether it will attract the possible tax rates of 18 per cent and 12 per cent. Clarification is also needed whether the existing Value Added Tax (VAT) and the service tax would be assimilated into GST, which are presently levied from the development projects.
Real Estate (Regulation and Development) Act, 2016
Early in the year in the month of March, the Real Estate (Regulation and Development) Act came into force. The act aims to promote transparency, bring accountability in the realty sector. This act would change the way the real estate sector works in India.
Amendment to the Benami Transactions Act
In order to curb the rising 'benami' transactions and pulling a plug on black money, the act that came into force on 1st November 2016 will henceforth be called as Prohibition of Benami Property Transaction Act after the existing act of 1988, the Benami Transactions (Prohibition) Act. The Benami transaction indirectly or directly benefits the buyer. This act would bring regulations to deal with disputes arising from such kind of transactions. It aims to make India an attractive investment destination.