GST rate cut would improve sentiment among homebuyers but will not have any major impact on disbursements in Q4 versus Q3 levels, said Sudhin Choksey, managing director of Gruh Finance.
In a big relief to homebuyers, the GST Council on Sunday slashed tax rate on under-construction properties to 5 percent without input tax credit, from the existing 12 percent. On affordable housing, the council has cut the tax rate to 1 percent from the current 8 percent.
However, GST rate of 1 percent on affordable housing is attractive for end users and that should reduce overall cost as far as the end user is concerned, he said.
Talking about the demand in real estate, Choksey said, “GST is not the only reason that demand has not improved. I think the real estate sector is going through a difficult period and in my opinion, this is the sixth year in succession that the real estate sector has been going through the pain. It has intensified year after year because of various reasons like demonetisation, Real Estate Regulatory Authority (RERA), GST and there has been a weak demand.”