Government policies play a crucial role in shaping the real estate sector. This legislative framework holds immense importance and can directly influence property prices and demand.
Let’s understand how fundamental government policies impact the real estate market is key to comprehending its dynamics and outcomes on property values and market interest.
How Government Policies Influence the Real Estate Market?
The government is offering subsidies to major businesses, encouraging their expansion and the establishment of large factories in specified locations across the country to meet growing demands. These subsidies serve as incentives for companies to grow their operations. As these businesses expand, they’ll ramp up production, creating a need for additional manpower.
Consequently, communities will begin to flourish near these burgeoning industrial zones or real estate developments due to increased job prospects. This surge in employment opportunities will naturally boost the demand for housing in these areas, prompting the emergence of more companies. This pattern mirrors the evolution of cities like Kolkata, Gurgaon, and Bangalore, where economic growth led to substantial urban development.
When the government imposes higher taxes on higher earners, individuals often seek avenues to mitigate these taxes, prompting a strategic shift towards investing in the real estate market. People are aware that real estate investments offer tax-saving benefits, people opt to invest in properties, effectively reducing their tax liabilities while simultaneously building a tangible asset for the long term.
Consequently, government subsidies and policies directly influence the dynamics of the real estate sector, compelling individuals to leverage this avenue for tax savings and asset creation.
Impact of Government Policies on the Real Estate Market
While we are discussing the influence of government policies on the real estate market’s price and sale, let’s see the impact of the most common government acts such as the RERA Act and GST Act on the real estate market.
RERA: Real Estate Regulatory Authority Act
The landscape of the Indian real estate sector saw a significant shift in 2017 with the introduction of the RERA Act, marking a pivotal moment in its history. This legislation brought about positive changes and ushered in a newfound transparency within the real estate industry.
Consequently, prospective property buyers now approach purchases with heightened confidence compared to earlier times when making real estate investments. If you want to get detailed information about West Bengal RERA, please visit- 3 Cottah Plot Under West Bengal RERA.
GST: Goods and Services Tax
The implementation of GST in 2019 brought significant impacts to the real estate sector. Diverse construction materials being subject to varying GST rates led to heightened construction costs.
However, this move also ushered in greater transparency and accountability within the real estate sector. Notably, the rental market emerged as a beneficiary, experiencing a largely positive impact. Residential property rentals were exempt from GST, while a flat 18% GST was levied on maintenance charges exceeding 7,500 rupees per month.
Wrapping it Up
In conclusion, it can be said that government policies have a significant impact on the real estate market in Kolkata and all over India. Best real estate developers in Kolkata, Srijan Realty have followed all these policies along with IGBC guidelines and built highly developed residential and commercial projects in Kolkata.
To know more about real estate investment, its government policies, and real estate projects in Kolkata, you can join us anytime. We would like to connect with you.