New Delhi, Jul 2: For all those who are working towards buying their dream house here is some bad news. With the implementation of service tax kicking in on Friday, Jul 2, houses are set to cost 2.5 per cent more.
The implementation of the service tax is not only expected to hit the end-costumer financially but the overall demand and sales of residential properties will also be affected, informed a leading property consultant.
"The implementation of service tax on residential properties will result in an increase in the price of homes for end-consumers. Developers will justifiably be unwilling to absorb this new tax burden and naturally pass it onto the buyers," Jones Lang LaSalle Meghraj (JLLM) senior vice-president for capital markets Gautam Hora told a news agency.
"The increase would be to the tune of 2.58 percent. Following this, overall demand and sales of residential properties will take a significant hit in all cities," he added.
This only adds to the woes of the commoners, who are battling to meet ends amid the soaring prices in all spheres.
The 2.5 per cent rise is enough to increase the unaffordability quotient of homes, especially in cities like Mumbai and Delhi, Mr Hora said, adding that in cities like Pune, Bangalore, Chennai and Hyderabad, where consumers are more price-sensitive, developers will face a greater challenge with increasing the prices.