Condo buying rises ahead of VAT imposition
View(s):The impending 15 per cent Value Added Tax (VAT) on sales of apartments for projects after April 1, 2019, has accelerated condominium sales, sector analysts say.
The VAT was to be effective from April 1 last year but after builders made representations to the Treasury, it was postponed to this year. Sales ahead of April 1 imposition of the VAT has seen a rise in condo sales.
Most builders were trying to keep their heads above water last year and they had raised prices of the condos by considerable amounts, an apartment developer told the Business Times. Mostly this had to do with rising costs.
As much as 40 per cent of the total input materials in a condominium are imported and the rising US dollar was adversely impacting their costs, according to many builders. Cement, along with iron and steel, sand and bricks, is one of the major materials in use in the country. Builders say the cost of construction is now higher, particularly the costs associated with materials and workers. “Going forward we are pricing apartments with the US dollar estimated at Rs.190,” another condominium developer told the Business Times.