The LTT on transfers of property to non-citizens under EDB schemes (RES, PDS, Smart City, etc.) will double from 5% to 10% for deeds registered on or after 1 July 2026.
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Property acquisitions by foreigners become more expensive.
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Developers targeting foreign markets will need to adjust pricing and marketing strategies.
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If a deed includes both immovable and movables without separate valuation, the entire value may be subject to LTT (risk of higher tax).
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Clearly stipulate in contracts whether LTT is to be borne by buyer or seller.
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Anticipate accelerated sales before July 2026 to avoid the higher rate.
In addition to LTT, a 10% registration duty applies to non-citizens purchasing property. This doubles the effective tax burden: 10% LTT + 10% duty = 20% on the deal value.
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Foreign buyers will face significantly higher transaction costs.
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Could slow demand in the high-end market, particularly in PDS/Smart City projects.
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Creates urgency to register deeds before 1 July 2026 to avoid the new duty.
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Developers should recalculate final selling prices and provide clear cost simulations to clients.
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Buyers should seek tax advice and carefully time deed registration.
If property deeds cover both real estate and movables (e.g., furniture, equipment) without a separate valuation, a flat 5% LTT applies to the combined value.
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Sellers lose the ability to reduce the tax base by allocating part of the price to movables.
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Increases the risk of paying higher LTT where no inventory is provided.
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Always prepare a detailed annex listing movables with individual values.
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Consider using an accredited valuer for large deals.
A new Smart City fee per square metre is introduced for subdivisions within Smart City developments.
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Developers will face additional project costs.
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Prices of units within Smart Cities may rise to absorb the fee.
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Project financials and feasibility studies must be recalibrated.
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Update financial models to include the Smart City fee.
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Inform investors and buyers about the new cost component.
The AMT at 10% of adjusted book profit now applies to real estate companies (previously applied mainly to hotels, insurance, financial intermediation, telecoms).
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Companies cannot reduce effective tax below 10% via deductions or exemptions.
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Profitability of real estate developers will be reduced, particularly those relying on incentives.
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Run AMT simulations for FY 2026/27 onwards.
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Reassess tax planning strategies and timing of deductions.
The compulsory VAT registration threshold is reduced from Rs 6M to Rs 3M in annual taxable turnover. Effective 1 October 2025.
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Many small and medium real estate agencies and promoters will now fall under VAT.
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Buyers of new properties will see VAT included on invoices (where applicable).
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Cash-flow impact: agencies must manage VAT collection and input claims.
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Register for VAT before October 2025 if turnover > Rs 3M.
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Update invoicing systems, contracts, and sales brochures to show VAT breakdown.
E-deeds are now legally valid provided they include a compliance declaration and are executed with proper electronic signatures and audit trails.
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Facilitates digitisation of real estate transactions.
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Reduces administrative delays and reliance on paper-based systems.
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Requires strong security and compliance tools (tamper-proof audit trails, STR/KYC).
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Adopt compliant e-signature and e-deed systems.
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Include standard “compliance declaration” wording in deeds.
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Train staff on digital KYC and AML monitoring.