Second Homeowners in Goa Could Face New Tax
18 November 2011
It looks as if investors and owners of holiday homes in Goa could be hit by a new tax which it is estimated could add as much as $10,000 to yearly running costs. It's all part of a plan by the local state government to rationalise property prices in the southern state as many homes have been purchased by non-residents are left largely occupied for much of the year. The tax is designed to target wealthy Indians from larger cities such as Delhi, as foreigners cannot legally own property or land in India, but many foreigners have managed to circumvent the rules by using local proxies to buy property on their behalf.
Many locals are concerned that wealthy buyers have helped push up the cost of property to unaffordable levels, and are especially upset as they tend to visit these holiday homes only once or twice a year and don't contribute to the economy of the state. It's hoped this retrospective tax will help limit escalating property price increases in the future. People who have businesses in the estate will be exempt from this tax as they are considered to contribute towards the local economy.
The former Portuguese colony has been popular with tourists since the 1960s, and it is estimated around 400,000 visitors travel to Goa every year. The government hasn't yet set a date for the impairment of the new tax. At the same time it is also looking towards relaxing visa rules for Russian visitors, and Russian tourists will now be allowed to have a six-month tourist visa. Last year India tightened its visa rules in light of the terror attacks in Mumbai, and this resulted in visitor numbers from Russia plummeting. This new relaxation in visa rules will only apply to Russians.