The office and mall space has just got dearer by 15-20pct and your home by a further 20pct. Terming the budgetary provisions, if any, for the real estate sector as bordering on the ‘ridiculous’, property pundits feel that the extension of service tax by the Union Budget 2007-08 to renting of immovable property for use in commerce or business is bound to be passed on to the tenant. The tax, however, excludes residential properties, vacant land used for agriculture and similar purposes, land for sports, entertainment and parking purposes and immovable property for educational or religious purposes. Adding to the burden will be a further 2pct service tax on construction. The tax has been levied on services involved in execution of a works contract with an optional composition scheme under which tax will be levied at 2pct of the total value of the works contract.
The Financial Express New Delhi Edition March 1 2007

Bangalore Office Spaces in the making