E - PAPER

CURRENT MONTH

LAST MONTH

VIEW ALL
  • HOME
  • NEWS ROOM
  • COVER STORY
  • INTERVIEWS
  • DRAWING BOARD
  • PROJECT WATCH
  • SPOTLIGHT
  • BUILDING BLOCKS
  • BRAND SYNC
  • VIDEOS
  • HAPPENINGS
  • E-MAGAZINE
  • EVENTS
search
  1. Home
  2. News/Views

Occupancy Certificate Requirement To Hit Real Estate Sales

Last Week’s clarification by the Union Finance Ministry that GST exemption is available only for properties with completion certificate is likely to hit real estate developers, a prominent consultancy firm said. The ministry had last week said that buyers have to pay Goods & Services Tax on a

BY admin
Published - Wednesday, 19 Dec, 2018
Occupancy Certificate Requirement To Hit Real Estate Sales
Last Week’s clarification by the Union Finance Ministry that GST exemption is available only for properties with completion certificate is likely to hit real estate developers, a prominent consultancy firm said. The ministry had last week said that buyers have to pay Goods & Services Tax on any new flat that did not come with a completion certificate. A completion certificate is issued by local government bodies after inspectors are satisfied that the builder has stuck strictly to the building plans submitted to them. In practice, most builders do not bother with the completion certificate either because they have made substantial deviations from the approved building plan, or because they fear that inspectors will reject their applications on flimsy grounds in anticipation of illegal gratification. Moreover, completion certificates are not required for the sale and transfer of the property to the buyer, or for subsequent resale by the buyer. However, with the finance ministry setting the cat among the pigeons with its GST clarification, builders will either have to get completion certificates or adjust their prices to account for the 12% GST. Under Indian laws, all incomplete properties are subject to GST, while completed projects, including resales, are not. Pune-based Anarock Consultants estimates that about 14% of the 6.9 lakh unsold residential properties in India’s top seven cities are technically ready-to-move-in. “With this announcement, developers are now left with no choice but to absorb the GST charges in ready-to-move projects that have not been given completion certificates,” said AnujPuri, chairman of Anarock Consultants. “If they attempt to pass this additional burden on to their buyer, their ready-to-move-in units without completion certificates will be at par with under-construction projects in terms of cost to buyers.” He said developers were already struggling with the prolonged slowdown in the Indian real estate market that has created a huge unsold inventory. To cope, the builders have been leaving no stone unturned to sell their projects and generate cash. Most recently, the sudden drying up of funds in the non-banking financial services sector — including housing finance companies — has also affected the real estate sector, he pointed out. “The sudden NBFC crisis jolted the sector and fund-raising became a major concern. Amidst all this, developers were cashing in on the buyers’ preference for ready-to-move-in units since these were not liable for GST,” he noted. “The additional GST levy on ready-to-move-in units without completion certificates is an extra cost which developers simply cannot afford to pass on to their customers. “Given their existing woes with regards to unsold inventory, developers have little choice but to absorb this additional cost either partially or completely if they want to keep sales going,” he added. The latest clarification could also lead to buyers increasingly preferring to buy from investors and owners, instead of from the builders directly.

RELATED STORY VIEW MORE

Mindspace REIT First Third-Party Acquisition Outside Its Portfolio Parks
HCBS Developments Launches Rs1400 Cr Uber-Luxury Project in Gurugram
IndoSpace Unveils India’s Largest Smart Industrial Park in Pune

TOP STORY VIEW MORE

Sandeep Navlakhe Joins Godrej Properties as Chief Operating Officer

Sandeep Navlakhe has been appointed as COO – Pan India at Godrej Properties, bringing over 30 years of expertise in real estate and infrastructure.

21 July, 2025

Airport Ecosystem Drives Real Estate Value Around It

21 July, 2025

SCLR Extension to Ignite Housing Demand in Mumbai Eastern Suburbs

21 July, 2025

NEWS LETTER

Subscribe for our news letter


E - PAPER


  • CURRENT MONTH

  • LAST MONTH

Subscribe To Realty+ online




Get connected with us on social networks!
ABOUT REALTY+

Started in 2004, Realty+, an exchange4media group publication is one of the most respected real estate magazines in India with offices in Delhi, Mumbai and Bengaluru.

Useful links

HOME

NEWS ROOM

COVER STORY

INTERVIEWS

DRAWING BOARD

PROJECT WATCH

SPOTLIGHT

BUILDING BLOCKS

BRAND SYNC

VIDEOS

HAPPENINGS

E-MAGAZINE

EVENTS

OTHER LINKS

TERMS AND CONDITIONS

PRIVACY-POLICY

COOKIE-POLICY

GDPR-COMPLIANCE

SITE MAP

REFUND POLICY

Contact

Mediasset Holdings 3'rd Floor, D-40, Sector-2, Noida (Uttar Pradesh), Pincode - 201301

tripti@exchange4media.com
realtyplus@exchange4media.com

+91 98200 10226


Copyright © 2024 Mediasset Holdings.
Rental Mobil bandung,Sewa Mobil Bandung, Rental bandung, Sewa Mobil, Jual Mesin Antrian, Harga Mesin Antrian, Mesin Antrian Murah, Jual KIOSK,Mesin Antri, Berita Terkini, Info Bray,Info Tempat Wisata,Portal Berita,Jasa Website