Echoes: Will the new Property Tax system result in a fall in Real Estate prices?

Anil Monani, CMD, Ekta World
The new property tax system is a stumbling block for investors who want to invest in property. This is because they will share their revenue with the Government. I mean we are already parting with thirty per cent of our income through the Income Tax and now this. It will create a major impact in sales as they will drop significantly. It is detrimental to expatriates as it will create a rippling effect. Investments will dry up in property which is one of their major avenues and this will consequently affect overall growth as well.

Anil Baduzer, RNA Corp
There may be a fall in prices. But I do not think we needed a new tax system just yet. I mean that the prices have just stabilized. They should have waited for a year or so before taking any new decisions. The new property tax may destabilize rates. We do not need it now.

Devang Trivedi, MD, Progressive Group
I do not think that they will reduce prices. The Property Tax aspect is just a small part that we are dealing with. Property Tax has always been a subjective matter for the administration. It is grey and is not transparent enough. It requires a total rework. It won’t be of much difference to the end user. It will be between the developer and the customer. I don’t think there will be a major impact as such. I mean we have to look at maintenance, one time cost and EMIs for instance.

Ketan Mehta, Director, Acme Group
Conversely I think it will increase prices in Real Estate in Mumbai. The incremental cost involved with the taxation will be recovered from the flat purchasers. Furthermore, there are no incentives from the budget either. This will be detrimental not just for Mumbai but for the whole of Maharashtra.

Mahesh Mudda, President, Builders Association of India
It will not really reduce the prices. It won’t create a deep impact as such. Prices will always remain a product of the demand-supply function. The Property Tax has a bit of ambiguity so we will have to wait and see.