The share of the luxury housing segment in the total sale of residential units in the top cities of the country has surged, according to realty consultancy ANAROCK Research report. Out of the total 3.65 lakh units sold across the top seven cities in 2022, 18 percent were in the luxury category priced more than Rs 1.5 crore, the report said.
The MMR, NCR, and Hyderabad have led luxury homes sales in 2022 with nearly 50,100 units sold in these three cities altogether.
Recently, Inspector General of Registration, Maharashtra also revealed that the revenue collections from property registrations in Mumbai rose to Rs 1,102 crore in February 2023, registering 79 percent jump against last year.
In February 2022, the revenue collections from properties stood at Rs 615 crore. With this, the revenue collections in Mumbai has touched five-year high. However, the total number of property registrations saw a drop of 8 percent in the year — from 10,379 in February 2022 to nearly 9,511 registrations in February 2023.
"This clearly indicates that the sale of big-ticket price homes saw significant movement,” said Anuj Puri, chairman at Anarock Group.
On high sales of big-ticket price homes in Mumbai and other top cities, Puri said that this could be because of government’s recent move in the Union Budget 2023-24 to cap capital gains at Rs 10 crore.
This new move will come into effect from April 2023.
"In order to save tax on capital gains, the HNIs across top cities including Mumbai are hurriedly closing luxury housing deals before the financial year ends in March," he said.
Previously, to save on tax from their capital gains, HNIs/ultra-HNIs would mostly re-invest into ultra-luxury property. Thus, the new move could be a deterrent for luxury housing sales to an extent once the new provision comes into effect.
According to the proposal, the government will impose a Rs 10 crore cap on the reinvestment of capital gains from sale of housing property, effective April 1, 2023.
Capital gains can be termed as the profit generated from the sale of any investment or property. Depending on the holding period of these assets, capital gains are classified into two categories — long-term and short-term.
