A property bought for 36 Lakhs in 2009, which could now be sold for up to 60 Lakhs, would be reassessed at 88 Lakhs after indexation adjustments. Although a 28 Lakh loss could traditionally be carried forward, new tax rules require a 12.5% levy on a 24 Lakh component of this underperforming asset. This example underscores how essential indexation benefits have been in making real estate purchases appear more viable despite the generally lower investment returns involved.
I wonder if without indexation, investors might lean into different strategies like enhancing rental income or scouting undervalued areas. Could creative financing come into play too? Curious to hear how you’d adjust your approach in this shifting landscape.
Interesting take! Without the tax benefit, I’m curious if investors might shorten their hold times or pivot to other strategies like rentals. How do you see risk playing out under these new rules?
Investing without indexation benefits demands a more rigorous assessment of both cash flow and potential resale value. From my own experience in property markets, changes in tax policy tend to shift investor behavior towards assets with clearer short-term returns. Without this tax relief, the appeal of holding properties long term might diminish in favor of shorter-term investments or more liquid asset classes. Therefore, it is essential to consider not just potential capital gains but also the additional transactional costs involved, adjusting the overall risk assessment.
i reckon without indexation the risk calc changes alot. investing in long term property seems riskier now, so people might look for quicker returns or even switch strategies all together. not sure if it’s a total turn off yet though.
With indexation benefits removed, my approach towards property investment would shift considerably. Based on my experience, the focus would move more towards properties that offer consistent rental yields or potential for faster resale. This would emphasize a detailed analysis of local market conditions and liquidity factors rather than relying solely on long-term capital appreciation. Additionally, the removal of these benefits could increase the importance of evaluating transactional costs and tax implications, resulting in a more calculated and risk-averse investment strategy overall.