Property Taxes You Need To Pay While Buying A Home

Property Taxes you need to pay while buying a home

Are you beholding to make an investment in Puranik City Neral, Mumbai? Do you know the legal aspect of buying a property?

Let me tell you, post the roll-out of GST the dynamics of taxes levied have changed for buying a property. With GST implementation on under construction properties across the nation, all indirect taxes such as VAT and Service tax have been replaced by single unified tax. While the stamp duty and registration are known, there are additional ones too.

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Know the taxes you need to pay when you invest in the Puranik Future City residential apartments in Mumbai.

GST on property under construction: Under the new unified tax regime, the government levies 18% tax on under-construction property.It has also added a provision under which the land value equal to one-third of the aggregate amount charged by the developer is allowed as a deduction. Thus, giving relief of 2% i.e. the effective GST rate on under construct units is 12%.

Note that the registration and the stamp duty are state levied charges so it would be imposed over and above GST.

Now if you are buying Ready-to-move in properties, the case is little different. You will be taxed much earlier, and these are outside the ambit of GST. The components involved are:

The registration charge: This process includes recording the documents such as the transfer, sale or lease of a property with a registering officer which is mandatory by Law. If any property is not registered, the owner of the property will not be able to contend any case in the court. Registered property document protects the buyer in case of alleged transactions and frauds. Registration fees is decided by the local government and varies from state to state but is typically 1% of the Agreement value.

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The Stamp duty charges: It is a kind of income or sales tax given to the government and is about 5% of the market value of the property. Nonetheless, it can be higher in some states. The buyer has to pay stamp duty before the registration of the property at a designated bank and any delay with this can attract huge penalty. The government issues a ready reckoner rates based on which stamp duty is calculated. And, unless it is paid, the property would not receive a legal status. The charge calculated is paid on each transaction from the exchange of documents to the execution of instruments.

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Then comes your TDS Tax Deducted at source is introduced under a new section in the Income Tax Act. During a sale transaction TDS is deducted at some percentage of amount. Any individual, when buy a property pays TDS to the seller by way of consideration for transfer of an immovable property, that does not include the agricultural land. The TDS is submitted in the name of the seller of a property. It is deducted at 1% on immovable property where the consideration exceeds 50 lakhs.

In conclusion, to make the dream of owning the residential space a reality for common mass there is an urgent need to rationalize these taxes. But, seeing that these make up a significant portion in the total value of your apartment in Puranik City Neral Mumbai, stop stalling your decision to buy because the more you wait the more your burden will surge in the future.

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