High taxes are an extortion.

From Chyavanprash to bricks and cement. Seems that the Burmans, promoters of the $1 billion dollar company, Dabur, have surrendered to the lure of the windfall profits of the property market. As the Tatas, Godrej, Mahindras, Wadias and every other business group have done before them. The risks are minimum. Borrow a few billion from banks and buy land. Banks are always happy to lend against immovable collateral. Quickly put up a sample apartment and start advertising. High Networth Individuals, as the wealthy are called, deposit booking amounts for apartments. Start building with the money collected and keep asking for further installments as the work progresses. At no time does the builder incur any risk. Sure, bribes have to be paid to officials and politicians for innumerable permits required by law but these are built into the price. These poor fellows are then left with mountains of cash which cannot be deposited in their bank accounts or invested in mutual funds and constitute a security risk. They buy properties from the original investors at a premium, paid in cash. It is a real win-win situation. The builders make huge profits, banks get their money with interest, the HNIs make a quick buck and fellows with black money sleep in peace in the knowledge that their money is safely invested in properties. Thus, the rich and the crooked have an interest in ensuring that property prices keep on rising. However, to earn their fortune politicians have to win elections and the easiest way to do that is to bribe the electorate. For that they need to collect taxes. Vast amounts. With prices of properties in tens of millions it is naturally a juicy target. The central government has imposed a 1% tax, which must be collected and deposited by the buyer or his property will not be registered. Now UP is to levy VAT on buildings under construction. Property prices have risen so high that 99% of people cannot afford them. People are thus forced to live in rented apartments which is one of the main reasons for poverty as rent money is a total waste. A kind of mutual fund, called Real Estate Investment Trusts, could allow ordinary people to invest in the real estate market and profit from the boom. Effective tax on such funds will be a bloodsucking 43.6%. This will only push up prices even higher. Until one day they crash. Lots of people will be wiped out.