Have an empty house? You may have to pay double tax

If you own a house and it is unoccupied, you may soon have to pay a new tax—the vacant apartment tax— which will be double the amount levied on the property at present.

The proposal in the state government’s draft Maharashtra State Housing Policy aims to tackle the rental housing problem in Maharashtra.

This move will open up approximately 4.79 lakh houses in Mumbai in the rental market.

The draft document states, “In order that the vacant flats and plots are put to use, there should be double taxation… This will deter the tendency to maintain the plot and the flat vacant for speculative gains.”

Real estate experts welcomed the move. “We talk of housing shortage, but the number of vacant houses are increasing by the day. The move is necessary,” said Pankaj Kapoor, CEO, Liases Foras, a real estate research firm. “With an increase in number of houses in the market, the high rentals will be moderated.”

Yeshwant Dalal, president, Estate Agents Association of India, said, “Most of the vacant houses are owned by investors who have purchased for speculative gains.”

According to Dalal, keeping such flats will no longer be lucrative, as the owners will have to shell out a lot of money.

Senior officials from the housing department said the additional tax will encourage rental housing scheme, which is practised widely across other countries. “Also, it will increase the revenue of the exchequer,” said an official, requesting anonymity.

With real estate prices reaching the sky, several homebuyers have postponed their purchase plans and switched to rental housing. However, because of limited supply, these people have to shell out high rentals.

Article source: http://www.hindustantimes.com/mumbai/have-an-empty-house-you-may-have-to-pay-double-tax/article1-1350832.aspx

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