Realty sector in Kerala worried over increased VAT

The Kerala government’s decision to increase VAT troubles the realty sector in the state. According to the experts, this would have an adverse impact on realty sector.

Realty sector in Kerala now fears that the increased VAT will have an adverse impact on the sector. Though the budget may not affect the realty sector directly, it may have an indirect impact.

The raw materials for construction like cement, paint and wood are likely to be costlier. This will affect the property prices as well. The experts predict that there will be a hike in the property prices.

The Kerala budget 2013 has decided to increase VAT by 1.5%. It will affect the prices of raw materials which are used for construction. There will be a proportionate growth in the prices of these raw materials.

Antony Kunnel, president CREDAI Cochin Chapter, said that the proposal to increase the VAT will affect the realty sector of the state. However he welcomed the budget-proposal to reduce stamp duty by 2% for land transactions.

There was a different opinion from one of the leading realty developers. Asset Homes’ CMD K A Mohammed Salim opined that it – the budget, would not affect realty sector deeply. He said that hike in VAT may affect the realty sector, but however only indirectly.

2% deduction on Stamp Duty for land transactions also may not affect the sales of apartments or any housing units. The deduction is applicable only for the land transactions. So those who buy land may get concessions but not those who buy flats.

Another important proposal included in the budget is the proposal to connect all registrar offices thru internet. This proposal was welcomed by all the top realty players of the state. Their only and major fear is about the improved VAT which may affect home sales.

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