Fractional Ownership Platforms (FOPs) are transforming Indian real estate investment, allowing retail investors to co-own high-value properties. With recent SEBI regulations bringing FOPs under the SM REIT framework, a critical question arises regarding Goods and Services Tax (GST) implications. This article analyzes the GST treatment of various transactions within the FOP/SM REIT lifecycle, from property transfer to SPVs, unit issuance to investors, investment manager fees, and rental income, highlighting areas of ambiguity and potential tax traps.
1. Introduction: India's Growing Fractional Ownership
The growth of Fractional Ownership Platforms (FOPs) has caused a structural change in the real estate investment market in India. With investments as little as ₹10 to ₹25 lakhs, these platforms enable retail investors to co-invest in high-value
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