Page 29 - CONSTRUCTION VISION July August 2017 issue

ntil the last month, However, service tax on about 75 percent homes
there were rental income from a with developers are unsold,
Uspeculations of commercial property with each quarter adding to
income from renting out a stayed. At the moment, the inventory.
residence would be taxed service tax of 15% has to
Depending on the location
at 18% under the Goods be paid on commercial
or city of home owned and
Realtors Relieved and Services Tax (GST). property rental income. rental value, the owner
But such earnings will not
as be taxed under GST which There are speculations stands to earn around six
within the industry that the months rent as his/her own
Rental Income comes as a a big relief to next GST Council meet is income of the lease
home owners and individual
Will Not Be investors relying on rental likely to put lease earnings agreement of 11 months as
society maintenance,
from a shop or a
Taxed Under income. commercial space in the property tax, brokerage,
GST “Services by way of renting 18% bracket. upkeep on interiors, etc,
of residential dwelling for eats up a larger share of
Experts said that with the
use as residence” have rental income.
realty market in doldrums,
been exempted from
taxing rental income would A month ago, Anuj Puri,
taxation web as per the
have meant keeping chairman of Jones Lang
decision taken during the
individual investors at bay LaSalle Residential (JLLR),
14th GST Council meeting
who vie for rental income. a real estate consultancy,
at Srinagar on May 19. A
had said that the common
few years ago, income from With GST coming in, the
renting residential property rental income would have apprehension is that if this
too was brought under the fallen further and wouldn't were to happen, the rental
ambit of service tax but was have been lucrative enough housing segment may see
later exempted. for investment purpose as a huge slump over the
medium term since
residential leases are
currently not taxed at all.
Another industry player said
that with a weak property
market and rising inventory,
a tax on rental income
would have had a negative
impact on the housing
sector.

GST

JULY-AUGUST 2017 CONSTRUCTION VISION 27