Repo Rate Stability and Indexation Benefits: A Double Win for Homebuyers and Sellers
Experts believe that the steady repo rate and indexation benefits will boost the housing market, making it easier for homebuyers and sellers to invest in properties.
Repo RateIndexation BenefitsHomebuyersSellersReal Estate SectorReal Estate NewsAug 09, 2024
Stable interest rates help maintain consistent borrowing costs for both homebuyers and developers, encouraging continued investment in property. Additionally, the recent announcement on indexation offers tax benefits to property investors by allowing the purchase price to be adjusted for inflation, which lowers capital gains tax liabilities when selling property.
Anuj Puri, Chairman, Anarock Group, underlined that RBI's decision to keep repo rates unchanged at 6.5% for the ninth consecutive time aligns well with yesterday's announcement on indexation benefits.
Frequently Asked Questions
What is the current repo rate?
The current repo rate is 6.5%, which has been kept unchanged for the ninth consecutive time.
What is the benefit of indexation for property investors?
Indexation allows property investors to adjust the purchase price for inflation, potentially reducing the taxable gain and overall tax liability when selling property.
How will the steady repo rate affect the real estate sector?
The steady repo rate will help maintain consistent borrowing costs for both homebuyers and developers, encouraging continued investment in property.
What is the revised budget announcement regarding LTCG tax rates?
The revised budget announcement allows taxpayers to pick between a 12.5% Long-Term Capital Gains (LTCG) tax rate without indexation and a 20% rate with indexation, for properties purchased before July 23, 2024.
How will the indexation benefits affect homebuyers and sellers?
The indexation benefits will provide clarity and imply potential tax burden reduction, improving homebuyers' sentiment and potentially stimulating the residential property market.
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