8th August, 2024: The government’s recent revision of the long-term capital gains (LTCG) tax policy on real estate has sparked significant interest and debate within the industry. The updated policy aims to streamline taxation rules for property transactions, potentially impacting both investors and homeowners. This revision is seen as a move towards enhancing transparency and efficiency in the real estate sector while aligning with broader economic objectives. Stakeholders, including real estate developers, investors, and tax experts, are closely monitoring the implications of these changes on market dynamics and investment decisions. As the new rules take effect, their impact on property prices, transaction volumes, and overall market sentiment remains a topic of keen observation and analysis.
The government’s decision to give the option to taxpayers to choose between 12.5 per cent LTCG and 20 per cent LTCG with indexation benefit for properties purchased before July 23, 2024 is a positive development for the real estate sector,” commented Mr. Samir Jasuja, Founder and CEO of PropEquity. “It addresses the apprehensions among property owners that they will have to shell more taxes in the absence of indexation benefit. Real estate has always been an important asset class for investment and if we have to make real estate a trillion-dollar industry than lesser taxes should be introduced.”
“The decision provides flexibility to property owners, allowing them to carefully evaluate their financial situation and select the tax option whenever they plan to sell,” said Mr. Sanjoo Bhadana, Founder & MD, 4S Developers. “It has removed the apprehensions among property owners that the new LTCG would have led to higher tax outgo. Now, depending on individual circumstances, one option might offer significant tax savings compared to the other. The amendments in the Finance Bill certainly add a layer of positivity for the real estate market.”
“The amendment in LTCG has given home owners the option to make an informed choice by opting for a method that involves a lesser tax outgo,” noted Mr. Vijay Harsh Jha, founder and CEO of VS Realtors (I) Pvt Ltd, a Gurugram-based property brokerage firm. “The real estate sector is quite enthused with this change in policy and we hope that real estate transactions are not impacted.”
These quotes highlight the varied perspectives within the real estate industry regarding the revised LTCG policy and underscore the potential implications for property owners and investors alike. As the sector adjusts to these changes, stakeholders will continue to monitor how these reforms shape the future landscape of real estate transactions and investment decisions.