Sale of luxury homes in Mumbai shoots up
Real Estate

Sale of luxury homes in Mumbai shoots up

The government has restricted the long-term capital gain tax deduction for reinvestment in residential buildings to Rs 100 million in this year's budget. According to this new rule, the maximum benefit that can be obtained when investing in another property is only up to Rs 100 million if one sells a house or other assets, including stocks, and their gains exceed Rs 100 million. This provision was made pursuant to Sections 54 and 54F of the Income Tax Act, which deal with the reinvestment of the revenues from the sale of long-term assets (housing or other capital assets) to purchase residential properties. Capital gains exceeding Rs 100 million would be taxed beginning in April 2023.

In order to take benefit of the capital gains, wealthy individuals in Mumbai are rushing to complete luxury home purchases before the end of the fiscal year in March. As a result, Mumbai's February 2023 revenue collection was the highest it had been in the previous five years, according to available data. Aside from that, the highest revenue collections for the entire FY 2022–23 occurred in February. 9,684 properties were registered, bringing in more than Rs 111,10 million for the state coffers.

82 per cent of the properties registered in February 2023 were residential, while 18 per cent were not, according to data from the state government. In February 2023, homebuyers continued to spend the same amount on housing, with properties worth less than Rs. 25 million accounting for 87 per cent of registered properties and those worth more than Rs. 25 million accounting for 13 per cent.

Compared to the February 2022 average price of Rs 11.8 million for registered buildings, this month's average home price was Rs 19 million. The Metro cess contribution increased revenues in tandem with the value increase. As a result, the revenue collected in February reached a record level for the decade, with an average of Rs 390 million per day. This demonstrates the robustness of the mid- to high-end segment, which continues to thrive in the face of challenges.

Market gurus have pointed out that HNIs and ultra-HNIs invest the majority of their capital gains tax savings into expensive residences, so, once the new regulation is in place, it might partially discourage the sale of luxury homes. So, a revised policy might be necessary to guarantee that the trajectory of future sales momentum will be similar.

The government has restricted the long-term capital gain tax deduction for reinvestment in residential buildings to Rs 100 million in this year's budget. According to this new rule, the maximum benefit that can be obtained when investing in another property is only up to Rs 100 million if one sells a house or other assets, including stocks, and their gains exceed Rs 100 million. This provision was made pursuant to Sections 54 and 54F of the Income Tax Act, which deal with the reinvestment of the revenues from the sale of long-term assets (housing or other capital assets) to purchase residential properties. Capital gains exceeding Rs 100 million would be taxed beginning in April 2023. In order to take benefit of the capital gains, wealthy individuals in Mumbai are rushing to complete luxury home purchases before the end of the fiscal year in March. As a result, Mumbai's February 2023 revenue collection was the highest it had been in the previous five years, according to available data. Aside from that, the highest revenue collections for the entire FY 2022–23 occurred in February. 9,684 properties were registered, bringing in more than Rs 111,10 million for the state coffers. 82 per cent of the properties registered in February 2023 were residential, while 18 per cent were not, according to data from the state government. In February 2023, homebuyers continued to spend the same amount on housing, with properties worth less than Rs. 25 million accounting for 87 per cent of registered properties and those worth more than Rs. 25 million accounting for 13 per cent. Compared to the February 2022 average price of Rs 11.8 million for registered buildings, this month's average home price was Rs 19 million. The Metro cess contribution increased revenues in tandem with the value increase. As a result, the revenue collected in February reached a record level for the decade, with an average of Rs 390 million per day. This demonstrates the robustness of the mid- to high-end segment, which continues to thrive in the face of challenges. Market gurus have pointed out that HNIs and ultra-HNIs invest the majority of their capital gains tax savings into expensive residences, so, once the new regulation is in place, it might partially discourage the sale of luxury homes. So, a revised policy might be necessary to guarantee that the trajectory of future sales momentum will be similar.

Next Story
Real Estate

Our goal is to double our GDV within the next three years

A trendsetter in creating iconic destinations with sophisticated design and state-of-the-art amenities such as Signature Island, Signia Isles and Signia Pearl, Mumbai-based Sunteck Realty focuses on a city-centric development portfolio of about 52.5 million sq ft spread across 32 projects. Kamal Khetan, Chairman and Managing Director, Sunteck Realty, shares more on the company’s projects, prospects and plans in conversation with R SRINIVASAN. Excerpts:You have projects in the heart of Mumbai; in the Eastern suburbs as well as Naigaon in the Western suburbs. So how do you ..

Next Story
Infrastructure Transport

Kochi Port Welcomes First LNG-Powered Container Ship

The Vallarpadom Container Terminal at Kochi made history as it "turned green" with the arrival of a 365-meter-long container carrier, the MSC ROSE. This significant event marks the first time a container ship powered by Liquefied Natural Gas (LNG) has docked at the port, ushering in a new era of eco-friendly maritime operations. Captain Bhaskar Kunji, chief pilot of Kochi Port Trust, proudly noted the transition from conventional diesel to LNG, emphasizing its environmental and efficiency benefits. "This is a game changer in the global shipping business," Kunji said. Unlike diesel, LNG is less..

Next Story
Infrastructure Urban

Wheels India Ltd Announces Rs.200 Crore Capex for FY2024

Wheels India Ltd, a prominent manufacturer of steel wheels for various vehicles including trucks, agricultural tractors, passenger vehicles, and construction equipment, has earmarked ?2 billion for capital expenditure in the current financial year. This significant investment will be directed towards enhancing their capabilities in offloading tractors, construction equipment, and cast aluminum machining for windmill casting segments, according to Managing Director Srivats Ram. The announcement comes on the back of a robust financial performance, with Wheels India reporting a 64.3% increase in ..

Hi There!

Now get regular updates from CW Magazine on WhatsApp!

Click on link below, message us with a simple hi, and SAVE our number

You will have subscribed to our Construction News on Whatsapp! Enjoy

+91 81086 03000

Join us Telegram