Today we are going to talk about Goa tax, that’s right it is the hidden cost associated with buying property in Goa, so whenever someone says oh you know I have a budget of one and a half crore

For example I want to buy a house, you have to make provision for hidden costs, so what are the taxes associated with buying a house in Goa, so the simple formula I tell you is provision 10, now this 10 percent, what is included in it

The first thing is your stamp duty, the second thing is your registration, and the third thing which is not a tax is your brokerage, many people forget that they have to pay two percent or 2.18 GST associated with that brokerage, now stamp duty is something you cannot avoid

Up to 50 lakh it is three percent 50 to 75 lakh it is 3.5 percent above 75 lakh four percent and transactions above 1 crore are 4.5 percent, registration is a government tax just like your stamp duty

No one can avoid it, you have to pay it You have to pay but unlike stamp duty it is the standard three percent so let’s take the average transaction above a crow, we generate a stamp duty of 4.5 and a standard registration of three percent

So it’s seven and a half percent, seven and a half percent is what you have to pay to the government plus your two percent brokerage so it’s about nine and a half percent and I’ll explain the balance later

Now that you have understood the stamp duty registration, there are other costs and other taxes that you need to know about the brokerage which I talked to you about earlier so whenever you do your due diligence ask for the house tax receipt because there you will see and it’s very low but you will have the house tax receipt

Suppose it’s an old Portuguese house there are other things like Punjab cleaning and so on that you need to check, nothing big, nothing as heavy or very big as stamp duty or registration

Finally this is very important, this is TDS, what is TDS, it’s tax deduction at source, now the way it is, it’s Let it be, you have a lot of people have gone abroad, so let me give you an example

Suppose Mr. Kumar sitting in Delhi comes to meet and says Mr. Souza wants to sell it to Mr. Kumar, now Mr. D’Souza who is going, he has taken Portuguese or British nationality and he wants to sell it, it is not so easy because the sub register will ask you for TDS certificate and the tax deduction is about 20 percent

which is now tax, this is something that people do not realize and they especially the buyer and the seller they are so eager they are excited to close the deal and then at the last moment they face this hurdle

And then the seller has to book his ticket back and that’s how the deal actually falls through, so if you are an OCI holder which means an overseas citizen of India who has a PIO, in short another person of Indian origin then you have to pay TDS of 20 percent.

It goes up to 20.8483 I will be back with you soon I will share the exact details and he pays it on your behalf before the sale deed and he downloads the challenge and says I have paid on behalf of Mr. Besos I have paid a Tata number and he links it to the sales lead

And then the sub register looks like this and says okay you know he has paid quite a fair amount I will accept the sale and without him I will register it the lead cannot be registered, if it is registered it can be recalled so there can be an issue with FEMA which is a foreign exchange management act

What Is The Tax On Goa And What Is The TDS There?

So let’s say the property is worth five crores, TDS on two and a half crores which is the sensible part, you have to calculate twenty percent or twenty eight three eight four percent on that two and a half crores, while for the husband’s share it is the standard one percent.

Does this make sense, so always remember the provision of TDS, especially if it is someone OCI from whom you are buying it, check their nationality, many times people when they own a property or when they have bought it they are Indians, but when they make a change, when they take the nationality or citizenship of another country, it is not mentioned in the sale deed.

Now in that case you can take the risk and avoid it, you can say Indian citizen, but now you may be in trouble, those of you who have paid TDS, remember it is not a fee that disappears from your pocket, no, you can claim it in the next year or the year after that you can ask your chartered accountant so we can talk I can refer you to a chartered accountant and you can get that money back.

So in short I will just say there are 10 standard fees, standard taxes, standard additional costs associated with buying a house in Goa, again on an average 10 which includes your stamp duty, your registration, which also includes lawyers fees.

This is not a tax but it is a hidden cost, what is the cost, so normally a lawyer will charge you for a title report, you charge fifteen thousand, which can go up to 20 000.

He will take you around 50 000 for preparing the sale deed, which includes execution, talking to the sub-registrar, fixing a date, all this is around 50 000, then they sometimes also ask you five thousand to make things smooth, tip, so this is also included in it

Then you may have to spend a little money for your newspaper advertisement, so I suggest two newspapers, because they are from Goa, so you put your newspaper, which is around 15-20 thousand, then you may also have to get the survey done, okay, then you get the property out

So it is around four-five rupees per square meter, so in total you take all this in the card and later your mutation which is transferring it in the government records, transferring it from that person to your name, not only mutation of land, but also electricity and water.

So all this is around 10 percent of the property value, so you bought a property of two crawls, does it cost you two Crore rupees? No, it will cost you Rs 20 lakh. That is how much it will cost. So make sure you make a provision in your budget for that extra 10 per cent amount that you will spend on your Goa property.