Tax Structure in Real EstateTax | June 11, 2013 at 1:52 am
Real estate is booming and with rising prices it is one of the most viable investment options and brings in appreciation and gains at any given point; however real estate is burdened with heavy taxes which impact the buyer as well as the seller of the property.
Let us analyze the tax structure related to real- estate.
Stamp duty tax is imposed in the sale agreement to give a legal status to the transaction, and in case the property is not duly registered and stamp duty not paid, in case of a legal litigation the transaction is not admissible in the court of law and the courts will be disinclined to entertain your case. Stamp duty is payable on the agreement value, which differs in different states.
To conserve and maintain the records of the property, it has to be duly registered by the registering officer and the registration tax varies from state to state and if the document is not duly registered, it cannot be produced a legal evidence in the court of law.
In some of the states VAT tax is applicable and it is calculated according to the document and agreement value, though it there has been lot of criticism by the property owners as they feel this is an additional burden on their pockets and in some of the states the matter is pending in the courts.
Service tax is a tax which is levied by the central government under the construction act, and has a somplex structuring, which has confused and hassled the property buyers and has faced lot of flak from them.
Society tax which every property owner as to pay for the day to day smooth functioning of the co-operative society.
Property tax charged by the local municipal corporation for rendering services like water, electricity, garbage disposal, street lighting, road development.