CREDAI asks CM to reduce housing costs

An individual looking to purchase a modest 100 square meter house in Goa ends up paying five to seven lakh rupees to the government merely in taxes and duties, putting a tremendous burden on home seekers and dampening potential sales. Keen to addresses this, CREDAI – Goa met with chief minister Laxmikant Parsekar on Wednesday to urge him to introduce positive measures in the state budget for 2016-17, including lower taxes, to boost demand for housing.

Accounting for infrastructure tax, labour cess, VAT, service tax, house tax, stamp duty and registration fees, an end user has to pay anywhere between 5,000 to 7,000 per square meter of built up property, CREDAI said.

Executive council members of CREDAI led by president Jagannath Prabhudessai asked Parsekar and other revenue officials to rationalize the rate of taxes collected under value added tax, infrastructure tax and stamp duty to try and reduce the cost of housing in Goa. CREDAI – Goa has also repeated the demand for a single window clearance system and clarity on the Regional Plan.

“The infrastructure tax paid to the town and country planning department at the time of approvals may be discontinued and the taxes may be collected by the department concerned where varied approvals are required,” Prabhudessai said. He pointed out that despite collecting infrastructure tax, the government fails to provide electricity supply, electricity meters, water connections and sewerage connections.

The real estate body has also recommended that the government charge 1% VAT on units that cost above 1 crore. Currently the government does not charge VAT on units up to 20 lakh. VAT of 0.5% is charged on units worth 20-50 lakh, 1% on units worth 50 lakhs to 1 crore and 2% on homes worth more than 1 crore.

“We would like to bring to notice that registration fees and stamp duty in nearby states is a maximum of 5% but in Goa even for a sale deed amount of up to 50 lakh, the government charges 5.5%,” Prabhudessai said.

Credai has urged the government to charge a maximum of 4% as stamp duty and registration charges for houses up to 1 crore and 5% for those above 1 crore.