After heavy setbacks from demonetization and RERA implementation, real estate market is expected to further see some more consequences if proposed changes related to Aadhaar and property taxation are implemented. PM Modi has been instrumental in bringing landmark changes in a tough to change sector and has already warned tough action against benami(anonymous) properties. While the effects of Modinomics in Real Estate is still sometime away to judge, the sector continues to see more reforms and regulations proposed to boost buyer confidence.
Linking Aadhaar Card To Property
Aadhaar Card, which began as a 12 digit unique-identity number for all Indians has become a powerful weapon to curb corruption in India. Aadhaar Card is set to be linked with immovable properties in order to crackdown benami properties in the country. The government has already linked the Aadhaar Card with bank accounts and mobile number. Several petitions against the linking of Aadhaar Card are being heard by courts.
Charging Tax On Builders For Unsold Inventory
The government wants to provide affordable homes to common man. It is rightly evident from the Real Estate Regulation Act (RERA) which came into force a few months ago and Pradhan Mantri Awas Yojana (PMAY) scheme. The government is dedicated to bring changes especially to help the middle income households.
Income Tax Department last week suggested the Finance Ministry to start charging taxes on unsold inventory as a source to gain more revenue.
Several builders do not sell the apartments in order to let the price appreciate which will keep accruing a few years later after the price rises. It is being proposed that the unsold apartments held by the builders as stock in trade would be eligible for tax under the income from housing property even if not rented out. Consequently, if this proposal is passed, the builders will either have to sell the properties early at lower price or will have to pay recurring tax to the government if inventory remains unsold. This will reduce hoarding of unsold inventory at high price by the builders and will make projects more affordable for buyers.
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