Mangalore’s Real Estate: Analyzing the Impact of Local Tax Policies

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    Mangalore’s Real Estate: Analyzing the Impact of Local Tax Policies

    The Information mentioned here was last updated on:

    18/7/2024

    Mangalore, a picturesque coastal city in the southern state of Karnataka, is experiencing rapid growth in the real estate sector. The city’s beautiful beaches, rich cultural heritage, and bustling port have made it a magnet for domestic and international investors.

    However, the impact of local tax policies on real estate development in Mangalore has come under the scanner in recent times. The state government’s decision to impose a hefty 18% Goods and Services Tax (GST) on under-construction projects has led to a slump in demand for such properties. Additionally, the Municipal Corporation of Mangalore (MCM) has levied a steep property tax on commercial and residential properties, which has driven up the cost of owning and renting real estate in the city.

    These policies have had a considerable impact on the real estate market in Mangalore. Developers are finding it increasingly challenging to complete their projects on time and within budget, while buyers are shying away from investing in under-construction properties due to the high GST rate. The decrease in demand has led to a slowdown in new construction, and developers are struggling to clear their inventory.

    Furthermore, the high property tax levied by the MCM has led to rising costs for homeowners and renters alike. Commercial establishments in particular are feeling the brunt of this policy, as they are required to pay an exorbitant amount in property tax. This has led to a rise in the prices of goods and services offered by these establishments, which is likely to deter customers.

    The real estate sector in Mangalore also suffers from a lack of transparency and regulation. The city’s land laws are outdated, and legal disputes over ownership titles are not uncommon. Additionally, builders are known to flout building codes and regulations, making it difficult for authorities to enforce safety and quality standards.

    To address these issues, a concerted effort is needed from all stakeholders, including the government, local authorities, and developers. The GST rate on under-construction properties could be reduced to a more manageable level, while the MCM could consider lowering property tax rates to increase affordability. Developers should focus on completing existing projects and putting in place mechanisms to ensure timely delivery of new projects. Lawmakers need to update land laws and enforce building codes and regulations stringently to ensure transparency and safety.

    In conclusion, while Mangalore’s real estate sector remains an attractive investment opportunity, local tax policies and a lack of regulation pose significant challenges to its growth. Timely action from all stakeholders is required to address these issues and drive the sector forward.

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