Why Realty Sector Contributes To Black Money In India?
Another reason behind this major problem is the wide gap between the demand and supply of housing. Although there is paucity of properties, several property owners have stocked their properties hoping that the price will head towards north in the coming years. Hence, both the mismatch between demand and supply and speculative urge give rise to the chances of bribery in real estate segment.
According to market experts, most of the real estate transactions involve illegal money, which means 50 percent of the money could be paid in cash in order to avoid taxes.
2) Property deal involves whopping transaction costs
The property taxes are huge for buyers as well as for sellers. In some cases, the property taxes may shoot up to 10 percent of the total property value. When it comes to paying taxes, a buyer has to pay taxes to register the property in their name and a seller has to pay capital gains on the variation amount between the purchase and sale.