With nearly 300 hectares of salt pan land in the city now open for development of affordable housing, here’s assessing its chances at successfully meeting targets. As one of the world’s most densely populated cities, providing affordable housing to its citizens is among Mumbai’s topmost priorities. And with this view in mind, the latest released Mumbai Development Plan (DP) 2034 proposes to release about 3,000 hectares of public and private land, previously tagged as No Development Zones (NDZs), for constructing one million affordable homes. In addition, civic authorities will unlock another 300 hectares of salt pan land for the same purpose. All these initiatives beg the question: how effective will this new land availability turn out to be, considering soaring costs of property ownership in the city?
Affordable housing? From Palghar and Boisar in the west to Dronagiri, Ulwe and Kalamboli along the eastern suburbs – such projects are far and few. However, this new availability of salt pan lands along Dahisar-Goregaon and Ghatkopar-Mulund is likely to see a slight correction in property prices. “DP 2034 has focused on beautification and recreational facilities such as theme gardens, old-age homes, farmer markets and many more, additionally marking 12,859 hectors as natural areas and listing them under NDZs. As per the plan, Maharashtra will release 3,355 hectares of land, of which 2,100 hectares will go to affordable housing and the balance for commercial and retail development,” shares a spokesperson from NAREDCO.
Environmental risks: There was a good reason why salt pan lands were kept out of the construction ambit all these years – they not only provided livelihood to thousands of salt harvesters but also helped maintain Mumbai’s ecological diversity. “We are not taking rising sea levels seriously. Also, infra development has not been able to keep pace in the past 20 years with even the existing surge of real estate activity. The Mill Land development around Dadar and Parel are classic examples, where traffic congestion and a lack of any recreational space are only some of the results.
Source: Times Property, Saturday 17 November 2018
Purchasing property abroad? Keep paperwork ready for scrutiny
Apart from proving to the taxman that the value of the property is commensurate with your income and that you’ve complied with FEMA, there are other RBI related issues to be considered. The income tax (I-T) department has launched a major operation to investigate illegal funds and properties stashed abroad by Indians. There were recent reports that the I-T department has launched investigations against at least 7,500 Indians who have bought properties in Dubai in the past few years.
Purchasing a property abroad can get complex depending on the structure that the buyer uses for the transaction. The tax department may want to know the source of funds and the Reserve Bank of India (RBI) wants to know whether the individual struck to the Liberalised Remittance Scheme (LRS) regulations. The simplest way is to remit the money to a foreign bank account up to the permissible annual limit and buy a property in your name. But the rules can get complicated if you are borrowing money or if you are planning to form a company abroad to buy and hold property.
Grey areas cause problems: Under the LRS, any Indian can remit up to $250,000 abroad in a financial year. A family of four can remit $1 million. The regulator has specified the restrictions on the use of these funds. The money, for example, cannot be used to buy lottery tickets, betting, or other speculative activities. The individual can, however, use it to purchase property, provide for maintenance of relative, invest in stocks and funds, set up a company, and so on. Tax experts feel that many of the individuals who are under scrutiny may have used the grey areas in the law to buy property abroad. About a decade ago, some Indians remitted funds, set up a company and bought property through the firm. RBI later clarified that an equity set up to buy real estate is not allowed.
Source: Business Standard, Monday 19 November 2018
New builder must take on all liabilities of old project
Housing regulation authority Maharashtra Real Estate Regulatory Authority (MahaRERA) has directed a builder to honor a home buyer’s agreement signed with the previous developer despite not having any such agreement with her of their own. The builder had been using the absence of these documents in his defense for not giving the home buyer a possession of the flat. The MahaRERA was hearing a plea filed by Mala Sen seeking possession of her flat and interest on delayed possession. During the hearings, Sen’s advocates Sandip Karu and Dinesh Mishra contended that Sen had booked two flats in the West End project in Malad West in April 2006 with developer Amit Patel. The project was, however, transferred to Ahimsa Developers who renamed the project to Ahimsa Heights. After dillydallying for years, in 2013 Patel promised her flat C-304 in the new building and gave her only a letter saying so. No agreement to this effect was signed. But when the Ahimsa Heights project was completed, the developer denied her possession which is when she approached the MahaRERA.
MahaRERA member Vijay Satbir Singh observed that Patel had neither terminated the agreement for sale executed for Sen in 2006 nor refunded the money. Ruling that Sen is a “lawful allottee” in the project, Singh observed that since Ahimsa Builders had taken over the project from Patel, they are bound to take on all the liabilities too in respect of the project including that of the complainant. Ahimsa and Patel were then directed to execute the registered agreement for sale with Sen for flat C-304 subject to a payment of Rs 10 lakh agreed upon by Sen’s advocate during the hearings. “Since the arbitration petition is pending before the High Court, the agreement is executed after final disposal of the proceedings,” the order said.
Stamp duty on city properties set to go up 1% to fund infra
Mumbaikars will soon have to pay 1% additional stamp duty on a property to fund transport infrastructure projects in the city, like metro and monorail, Mono Rail Transport System (BRTS), freeways and sea links. The state called it a surcharge that is a percentage of the land/property value. It’ll push up property stamp duty to 6% from the current 5%, making flats costlier in the city. In its statement of reasons, the bill said “it is considered expedient to levy a surcharge by way of the stamp duty leviable on the instruments of sale, gift and usufructuary mortgage of immovable property within BMC” to ensure the corporation or agency undertaking notified Vital Important Urban Infrastructure Projects has sufficient funds. The usufructuary mortgage is when the mortgagor hands over possession to the mortgagee till the repayment is done. Officials said such transactions were negligible in the city. The government will pay the corporation or agency that has undertaken the notified project a grant-in-aid approximately equal to the amount realized by the surcharge.
Stamp Duty Surcharge: The money is to be used for the project in a manner specified by the state government. Recently, the Mumbai Metropolitan Region Development Authority (MMRDA) had asked the government to provide funds by levying a surcharge on stamp duty or increasing the premium on floor space index (FSI) for funding the transport projects. It is implementing various metro projects, besides the Mumbai Trans Harbour Link, etc. It had sought the financial aid on the plea that its land bank is drying up. The 1% additional levy has been in place under the other urban local bodies after the Local Body Tax was abolished in 2015. Officials said Mumbai alone was not taxed. Across the state, 21.5 lakh documents were registered last year and the revenue earned was Rs 26,500 crore. In Mumbai, about 2 lakh documents are registered annually and last year, the revenue earned was Rs 10,500 crore. This year, given the recession in the real estate industry, the target has been lowered to Rs 10,000 crore for Mumbai and to Rs 24,000 crore across the state, said officials.
Govt plans to slash visitors’ parking slots in hsg socs to 5%
The state government has proposed to reduce parking slots for visitors in housing societies from the mandatory 25% to just 5% of the total space allotted for the purpose in the new development control rules. Activists said this will lead to further congestion as visitors will be forced to park on roads. Housing experts said the existing 25% rule is hugely misused by builders who sell these slots and make a profit. Moreover, several housing societies flout this norm by putting up boards outside their gates stating that car parking by visitors is not allowed inside. The government has proposed the changes in a modification plan published on November 13, inviting public suggestions for and against it.
Development control rules make provisions for parking space in societies according to affordability. In case a builder wants to construct more parking, he must pay a premium to the BMC. In several instances, builders sell visitor parking to residents or the society itself allows it to exist members as rarely is any authority interested in keeping a check on it. The government did not amend the regulation for 25 years, despite the fact that now Mumbaikars prefer to have a vehicle even while living in 1BHK flats measuring 450 sq ft. Indrani Malkani, trustee, Together VCAN, said, “Reducing space for visitors parking will be counterproductive as it will force more people to park on roads.” Ramesh Prabhu of Maharashtra Societies Welfare Association said, “Visitors need parking too. This will create more hurdles.” Shirish Sukhatme of Practising Engineers Architects & Town Planners Association though said, “It’s a welcome decision. At many places, builders are struggling to recover parking construction cost from flat buyers.”
Claiming rent as business income isn’t easy
A common point of dispute between taxpayers and the Income Tax (I-T) authorities is the treatment of rent earned from a property. Taxpayers like to show such rent as business income as they get the benefit of depreciation, higher deduction of expenses, and the owner doesn’t need to pay any notional rent when the property is not let out. As it leads to revenue loss, the I-T department scrutinizes every case in depth to see if the taxpayer should be allowed to claim rent as business income. The primary reason for disputes is that the I-T Act doesn’t provide a definite answer on how to rent from a property should be treated. It, therefore, depends on the circumstances of each case. The courts have ruled that classification of income from rent depends on whether the property is let out to enjoy the rental income or the owner is exploiting it commercially.
If you rent a property as an individual or as a company, in most cases you need to mention rent under the section ‘income from house property’ in the income tax return (ITR) form. It doesn’t matter whether it’s a house (residential) or an office (commercial). When rent can be classified as business income depends on each case. There are, however, broad guidelines that a taxpayer can look at to see if rent can be business income. Rental income can be business income when, say, a business and its assets are leased out as a going concern, or assets are leased out along with furniture and fittings and other associated structures, or in addition to leasing of properties, various other services are regularly provided (like lifts, security, or other amenities such as machinery, canteen, housekeeping, etc).
Source: Business Standard, Thursday 29 November 2018
With the Indian rupee having weakened against the USD, the entry price for the NRI property buyer is attractive. Due to a weaker rupee, NRIs can enter the market at a 10 percent discount compared to their domestic resident counterparts, thereby making it an attractive proposition for them. “NRIs have always had an affinity to the Indian real estate market. With rupee weakened against the dollar, investment in India has become cheaper, thereby paving the way for NRIs to get good deals,” says Suresh Castellino, executive national director – capital market and investment services, Colliers International India.
It is estimated that about 7-8 percent of the inventory is being bought and held by NRIs each year. Hence, given the current trend of enquiries and purchases in the last 2-3 months, it is being estimated that this consumption will only rise to about 10-12 percent – in short, a 3-5 percent rise in NRI consumption, which will only boost the market. Experts say that with the prices bottoming out, the market is only poised for a golden period. “Real estate is a long-term investment. With the rupee expected to decline further, NRIs should take advantage of the situation and park their money as the returns will only get better with time,” says Arvind Nandan, executive director-research, Knight Frank India.
Amit Goenka, MD, and CEO, Nisus Finance Services Co. Private Ltd, says the growth trajectory in the real estate market is being determined by The off-take of inventory: There has been a growth in the off-take by almost eight percent on Q-o-Q basis and over 12 percent since last year; Increase in prices: It is expected that the ready reckoner/ circle rates for real estate, which have been largely flat will rise next year. Also, projects, which have sold well, will look to increase their price points, thus demonstrating an upward momentum; Consolidation in the market: Consolidation of development in the hands of the large corporate and organized players means that prices and values will start to firm up further and increase over a period of time; Reduced launches: With most developers focussing on current projects, the demand for them will enhance buying decisions.
Source: Times Property, Saturday 3 November 2018
Tenant checks: a Mandatory visit to cops to go?
Soon, tenants may be exempted from visiting police stations for the mandatory verification. This could be possible as the registration department is set to transfer its data to the police department. Details submitted to the registration department, such as proof of name, past residence address, etc, will be shared with the police department through a special software. However, those who submit documents manually at the registration department for leave and license agreement will still have to visit police stations for verification. A source in the Inspector General of Registration (IGR) department said the data transfer process is in the last stage and the National Informatics Centre is helping with the same. “We had proposed the plan a year ago and now, it is in the final stages,” said an official.
A police official said that once the data is shared with them, citizens need not visit police stations. “When the registration department mooted the idea, we had put forth our requirements, which include citizen verification identity cards as well as residence proof, both current and past, and nationality. These details are anyway submitted in the registration details. There is no point duplicating the information. If it is provided to us, we will have it easy,” said Sanjeev Kumar Singhal, additional director general, state crime records bureau. “This facility is for those tenants who do e-registration. Those who submit documents manually to the registration department for leave and license agreement will still have to come to us,”. Meanwhile, the state registration department and police are keen on making it compulsory for tenants to e-register. Registration officials said the move is aimed at weed out middlemen. There are more than 500 authorized service providers in the state who, for a fixed fee, can register the documents and execute the leave and license agreements at home.
Source: The Times of India, Sunday 11 November 2018
TMC proposes 100-sq-km twin city near Thane
Thane Municipal Corporation (TMC) has drawn up plans to develop a self-sufficient twin city spread over 100 square kms along its fringes as an alternative to accommodate a growing population. Municipal officials said the idea, the brainchild of municipal commissioner Sanjeev Jaiswal, is to develop a new city on the lines of Navi Mumbai that can take the load of a growing population expected to settle in Thane and suburbs in the coming years. Six villages bordering Thane and Bhiwandi municipal corporation limits, including Kharbao, Paygaon, Paaye, Shilotar, Malodi, and Nagari, among others, have been proposed to undergo the transformation.
According to the initial concept, the corporation plans to tie up with MMRDA and form a special purpose vehicle that will be involved in the planning and execution of the megapolis for its residential, commercial and industrial activities. Currently, the areas are covered in MMRDA’s regional development plan but TMC wants these to be designed separately and brought under its fold. “Thane is saturated. A parallel city that can be designed from the scratch will have all the required amenities for a self-reliant township,” said an official from TMC’s town planning department. A proposal to the effect will be tabled before Thane municipal general body on Saturday for approval.
Mumbai Grahak Panchayat’s survey aims at maximum projects under MahaRERA
The survey also intends to track the unregistered developers and share the information with the regulatory authority for further action. Nearly 17,000 real estate projects are registered with MahaRERA. The consumer body also wants to reach out to peer groups across the state to ensure registration of maximum housing projects.
MGP is conducting an online survey of home buyers across the state to collect information on the ongoing projects still not registered with MahaRERA. The survey will collect information about the developers who have collected more than 10% of the flat cost but have not signed agreements with home buyers. Once the survey is complete, the MGP plans to take up the issue with MahaRERA with evidence. “We have initiated the survey to ensure that the laws under RERA not only remain in books but are implemented.
Maharashtra RERA directs builder to obtain Occupancy Certificate within 3 months or pay fine
The Occupancy Certificate is proof that the building was constructed without breaking any rules and building codes. In its absence, residents have to pay double the charges for basic amenities such as water and face hurdles if the structure goes for redevelopment.
The Maharashtra Real Estate Regulatory Authority (MahaRERA) has asked a builder to obtain the occupancy certificate (OC) for his building within three months, or pay an interest amount to a resident of the building who filed the complaint — a significant order for a city where more than 10,000 buildings do not have the certificates. MahaRERA, the state’s real estate regulator, was hearing a complaint filed by flat owner Amol Sadashiv Jadhav, against Balkrishna Constructions for not getting an OC for the building named ‘Rohini Niwas’ at Vikhroli. Jadhav said the builder had given him possession of the at on November 23, 2012, but without the OC. Six years later, the builder is yet to obtain the certificate. Jadhav pointed out how the poor water connection, non-existent fire-fighting systems, and lifts were causing him mental trauma. The builder blamed the delay in getting the certificate on a policy change under the Development Control Regulations (DCR) but said he intended to obtain it within the next six months. He said he would give the residents a permanent water connection after that.
After several failed attempts, the Dharavi Redevelopment Project is being revived yet again. However, the state government’s plan to divide the sprawling slum into 12 sub-clusters and redevelop it has been scrapped. The state cabinet approved a fresh plan: Dharavi will be redeveloped as a whole, not in parts. A special purpose vehicle (SPV) will be set up—with 80% private stake and 20% government contribution— to execute the Rs 22,000-crore project. Global tenders will be issued for its construction, said housing minister Prakash Mehta.
This time around the cabinet has approved a proposal wherein the SPV with 80% private stake and 20% government contribution will have a special status. “This will enable the project to obtain concessions in stamp duty, state GST repayment, and relaxation in premium for fungible floor space index (FSI),” said a senior official from the housing department. Under the new plan, the land owned by Central Railway (90 acres) which abuts Dharavi will also be part of the redevelopment project. Sources said discussions with the railways are at a preliminary stage.
Incomplete building projects can benefit from new devpt rules
In a boost to the realty sector, BMC will allow developers whose projects are incomplete to continue their construction under the new development control regulation (DCR-2034), which provides for more FSI potential on plots. The decision was taken by civic chief Ajoy Mehta on Wednesday at the first meeting to prepare a transition policy for projects started under DCR-1991. While all such projects will be allowed to migrate to the new DCR, builders will also have the option of completing construction under the old norms if all permissions have been already obtained. Any new permission related to construction will henceforth be given only under DCR-2034.
Mehta said, “Even projects that are half-way through can migrate. In such cases, the development potential of the entire plot will be calculated under the new norms. After deducting the FSI used, the builder will be allowed to use the remaining FSI while completing the work.” Sources say this will benefit several builders because under the new DCR, development potential of a plot is calculated on the gross area through 15% is reserved for open space for building residents. A builder can also migrate an entire project cleared under DCR-1991 by taking fresh clearance.
Time to go green
In a bid to make Mumbai healthy, more and more real estate developers are adopting eco-friendly ways. A spurt in development of real estate and infrastructure projects have adversely impacted the environment. Increasing pollution level and lack of green cover have undoubtedly become a big issue in a city like Mumbai. Hence, for making the city healthier, sustainability in the construction industry is the key. Several city developers are giving emphasis to building green homes today. They see it as a solution to minimizing the adverse effects of pollution and promoting healthy living for people. The following aspects are given importance while making a green building:- Climate-responsive architecture; Ecological site planning and landscaping; Use of eco-friendly materials; Use of energy-efficient building system and services; Integration of renewable energy systems like solar water heater, PV cells; Water conservation technology; Energy-efficient disposal system of sewerage; Most importantly, applying the principle of the 3Rs — reduce, reuse and recycle.
Benefits of Green Buildings: * Green buildings help in saving a huge amount of resources like power and water. They save around 30-40 percent power consumption which results in reduced electricity bills and provides huge savings to the homebuyers. * Incentives like tax rebates are offered in some states for green buildings. Some municipal corporation in Maharashtra offers up to 15 percent rebate on property tax and up to 50 percent rebate on a premium for builders who are GRIHA-certified. * Durable materials like wood and timber crate used for green buildings help in saving the cost of replacement and maintenance. “Green building forbids the use of hazardous chemicals, materials, and fragrances that are used to build standard buildings. The roofs are a prominent feature of green buildings as they are partially or completely covered with vegetation; it reduces heating and cooling costs, prevents storm-water runoff, and acts as a filter to pollutants,” informed Jain. * Another economic benefit is that the resale value of these buildings is much more owing to less operational and maintenance cost. * In short, these buildings improve ventilation, environment and create a healthy and comfortable life.
Boost to Green Buildings: Keeping in view that the benefits of green buildings are many and will be beneficial not just environmentally, but economically as well, government and developers are leaving no stone unturned to promote it. One of the effective methods of endorsing green homes has been by luring buyers on the cost that will be saved on electricity bills, health, etc., post its purchase. In a bid to promote green buildings in India, some of the state governments and local bodies have started providing incentives and tax benefits to those who get their building green-certified. Furthermore, to provide open green spaces inside housing complexes, the city’s municipal corporation, in its revised Development Control Regulations, has proposed to allow the redevelopment of buildings that are over 30 years old and offer 40 percent of the total built-up area (BUA), thus ensuring more open spaces in Mumbai. The rising carbon footprints on earth have been the biggest concern and so homes with sustainable construction is a wise choice.
Source: The Times of India, Saturday 27 October 2018
Striking the right balance between investments, savings, and living expenses can feel like a tightrope walk. Fret not, as our experts share their financial formula – “Financial security is a key element towards securing a comfortable living for the future. So, it’s imperative to take out some time to assess one’s current earning capacity, risk coverage for the future, and have an investment plan in place, as it will not only give a sense of control over present life but also ensure a secure future,” says Sachin Chaudhary, executive director and COO, Indiabulls Housing Finance Ltd. In short, an individual must spend 35-40 percent of one’s monthly income on living expenses, around 40-45 percent on loan installments and balance 15-20 percent on savings. Following this principle, without having to compromise on the current lifestyle in a big way, s/he will not only be able to purchase her/his own house; but also build a corpus for a fulfilling postretirement life.
The thumb rule in getting the right mix between savings, expenses, and investment:
Manage your monthly finance through budgeting; This will help you to keep a tab on your spending and savings; Set short-term, medium-term and long-term goals; Build a diversified investment portfolio of fixed deposits, mutual funds and real estate; If your investment to rent ratio is high, give your property on rent and earn handsome returns; A periodic review of the achievements or gaps is essential to mark the progress towards your goals and take corrective measures wherever required. – Rajiv Ranjan Singh, CEO, Karvy Stock Broking. In Real Estate we trust… Among various aspirations that an average Indian has, owning a home tops them all. Hence, it is not only one of the most popular investment tools, but also one of the asset classes where prudently saving for and eventually investing in hold the key.
Source: Times Property, Saturday 27 October 2018
Internet of Things (IoT) and artificial intelligence (AI) are no longer buzzwords even for real estate developers as they increasingly deploy these as well as home automation to lure homebuyers. Developers are warming up to the idea of putting home automation products into their offering, a late addition to the standard amenities list. Given the cost factor, developers refrained from deploying these products before. A huge reduction in technology and deployment costs have helped. Platforms that use cloud-based algorithms and sensor technologies monitoring the indoor environment and alerting residents for corrective actions are also being deployed to bring wellness intelligence into the connected home environment.
“Real estate is no longer confined to a brick-and-mortar structure with developers constantly looking for ways to offer value to their customers. It has evolved into creating a healthy environment for people to live, work and play, thereby improving the health and quality of life of households around the world,” said Shishir Baijal, CMD, Knight Frank India. Wifi-enabled home automation products like video door panels, motion sensor-based light, and security management and appliance control products that remote manage air condition, television, geysers and other electricity drawing appliances that are app-controlled are slowly becoming a part of new developments, especially in the metro areas.
5-stars near airport get devpt bonanza
Five-star hotels around the international airport in Sahar, Andheri (east), have received a big land bonanza from the state government. Under the latest development control regulations, they can utilize most of the reserved public recreational ground in their possession. Till now, such hotels could carry out construction on only 50% of their plots and had to reserve the remaining half as recreational ground (RG) to be open to the public for certain hours a day. Now, they have to give the BMC only 10% of the total plot area (or 20% of the half reserved for RG).
Civic sources say this will lead to more construction and expansion of more five-star hotels around the airport. This will also help some hotels that had not made constructions on some area of the plot that had to be reserved as RG. The change in the development control regulations will lead to a generation of additional FSI for the hotel owners for expansion of their buildings or constructing new ones, sources in BMC say. While the decision could see a rise in the number of hotel rooms, it also means recreational grounds for the public has been reduced by 90% over the years, as all these plots were marked as RG in the city’s first development plan-1967.
Festivals help to accelerate realty growth
For most individuals, buying property is a one-time activity as they pool their entire savings to fulfill this one dream. Considering the importance and value of the purchase, most buyers wait for an auspicious occasion to make the big and expensive investment. There is a significant rise in home sales and in enquires about newly launched housing projects. Realty sector has undergone several changes, and buyers’ confidence is back, who is once again considering property market as a lucrative option to invest in. “Going by the Hindu belief, buyers find festivals to be auspicious occasions to buy property. Even developers prefer to launch new projects and perform bhumi pujan coinciding with the festive season. This year, we feel that Dussehra will bring in good response as buyers are gearing up to invest in real estate, especially to avail the benefits offered to them,” said Deepak Goradia, vice chairman and managing director of a leading realty firm.
Best Time to Buy: Festive season means discounts and offers everywhere. Besides retail, the realty industry to has been attracting buyers by offering unique festive discounts, and developers will continue to give great deals this season as well. According to experts, attractive deals easily compel buyers to walk in for more information about the project. From having a special payment plan, giving a huge discount on property and car parking space, free club membership to offering free interior designing or modular kitchen set-up, such offers have resulted in increasing the footfalls of buyers for project enquiries and housing sales.
While some developers are asking buyers to pay only 20 percent initially and the rest post-completion, others have offered concessions on down payments. Keeping in view that these discounts are for a limited period, consumers have begun to enquire promptly about the projects, thus pushing the sales. Moreover, many buyers who have already zeroed in on their property, prefer to wait for the festive season to make the final deal in order to enjoy attractive discounts and offers. According to experts, the realty market at present has witnessed a vast transformation and end-users and investors are again keen on making purchase decisions in the right kind of housing project. Hence, developers are confident that this year’s festive season will bring about a positive sentiment in the industry.
Source: The Times of India, Saturday 13 October 2018
Realtors see a massive opportunity in India’s growing elderly population
By 2026, India’s elderly could rise to 173 million, more than double what it was two decades ago and accounting for 12.5% of the population, a figure that could rise to 19.5% by 2050. The projected numbers provided by the Population Census 2011 will amount to more than the entire population of Russia. For the real estate sector, it represents massive opportunities, particularly as current housing for senior people is minimal. Developers are excited about the potential and say they see interest in the sector accelerating. Ankur Gupta, joint managing director of Ashiana Housing, which has built around 1,800 apartments for senior citizens, says that an annual conclave they organize on senior housing usually draws up to 50 delegates, both from real estate and health care.
One industry expert says that in the last three years, several players have jumped into space. “The Brigade Group and Mantri Developers kicked off projects in the last couple of years and Tata Housing launched one project in Goa and one in Bengaluru,” said one expert. Last year, the Gagan Group launched a project in Lonavala featuring luxury apartments for senior citizens. Other prominent players in the sector include Paranjape Schemes, Ansal API, the Ashiana Group and Covai. Most existing and planned senior living projects are in the satellite towns of major metros and include Kochi, Jaipur, Bhopal, Coimbatore, Rishikesh, Goa, and Mathura.
Kamal Khetan, chairman and managing director of Sunteck Realty which focuses on the luxury real estate (amongst other segments), says his development plate is full right now but he does not rule out senior living in the future. “Senior housing is a massive opportunity which at the same time adds to the triple bottom line of giving back to society which is always a plus for any industry.” The current shortage of housing can be seen in Anarock Property Consultants research which suggests that around 4,500 senior living units are available in the market.
As you usher in the festive season, home-buyers await the auspicious time to buy a home. This period is a significant sale season where developers gear up to make lucrative offers and incentives. Here’s a ready reckoner to help you.
Be Prepared: If you are looking to invest, make the best of the festive offers and buy a home that has an appreciation potential. Before you begin the house hunt, identify your needs and criteria. Ensure that the property provides you easy access to business centers, recreational points, educational institutes and hospitals among others.
Seek Help: Appoint a lawyer to perform due-diligence of the project/property such as title, encumbrances, and mortgages. Consult a financial expert to help you manage your money.
Be Smart: Kapur says, “Developers are offering discounts and amenities such as spa, mini theatres, etc. Wardrobes, kitchen cabinetry and appliances, and toilet vanities are included as freebies. Focus on the right property and don’t get carried away with these add-ons. Remember that the freebies offered up-front by builders are usually already accounted for in the rates provided. So be smart and instead of focusing on free goods, try an approach based on your practical needs.
For redevpt, housing soc is also promoter: RERA
In a relief for flat buyers in a Goregaon redevelopment project, the Maharashtra Real Estate Regulatory Authority (Maha RERA) has held that a housing society is also a promoter. The Maha RERA recently heard a complaint by purchasers of flats in the sale component of a project called Horizon. Udayachal Goregaon Cooperative Housing Society, with 15 members, had appointed Jaycee Homes Pvt Ltd in April 2013 to reconstruct their building with stilt and 15 floors and to sell additional flats. The developer entered into agreements and collected money from purchasers. He constructed till the 11th floor. Due to non-compliance of development terms, the society terminated the developer and further refused to accept the rights of the purchasers to get their homes. Fifteen purchasers moved Maha RERA contending that their agreements with the developer are legal and binding on the society and the developer and they must be directed to hand over possession of their flats by completing the construction.
NRIs rush in to invest in Residential realty as Rupee weakens
The rupee’s plunge has led to a pickup in the residential real estate as an increasing number of non-resident Indians (NRIs) are rushing to take advantage of lower prices and discounts as the dollar surges in value. The rupee has dropped 13.04% against the dollar since the beginning of 2018, 6.20% over the past three months and 3.4% in one month, amid a global rout of emerging market currencies. Recent reforms such as an implementation of the Real Estate (Regulation & Development) Act, 2016 (RERA), amendments to the Benami Properties Act, the goods and services tax (GST) rollout and demonetization have also improved transparency in the sector, thereby offering more comfort to the NRI community.
“Depreciating rupee against currencies such as the dollar, pound, the UAE dirham, among others, is prompting a large number of NRIs to invest into the country’s realty market,” said Anarock Property Consultants chairman Anuj Puri. “Builders are also leaving no stone unturned in luring them with a host of amenities and features.” That’s led to a resurgence in serious inquiries by NRI end-users and investors, leading to deals taking place. This may result in a repeat of the phenomenon witnessed in 2012. The NRI segment usually contributes about a 10th of annual property sales in India but it soared to 25% in 2012 when the rupee depreciated 17.37% between February 3 and July 22 that year. The property markets that typically attract NRI investments are Bengaluru, Chennai, Kochi, Chandigarh, and Pune besides premium projects in Mumbai and Ahmedabad.
FSI benefits for bldrs withdrawn in new DP
The city’s new Development Plan (2014-34) notified by the state urban development department on Saturday has delivered a shocker to builders and architects as some of the construction benefits have been suddenly withdrawn. Sources said the incentive FSI, which was offered to developers and land-owners whose plots are reserved for public amenities and road-widening by the government, does not find mention in the new notification. Senior BMC officials blamed the urban development department for what they called errors. Neither urban development secretary Nitin Kareer nor municipal commissioner Ajoy Mehta responded to queries.
Construction industry sources said that withdrawals of FSI incentives in the new DP notification will hamper development in the city. Generally, about 50% of a plot is reserved for Accommodation Reservation (AR) meant for any public amenity like a hospital or a market. For surrendering this portion of the plot, the developer was earlier entitled to receive additional FSI
for the total area. The changed AR policy, architects said, will not find any takers. Industry experts warned redevelopment of housing societies will become unviable. Architect Manoj Daisaria said withdrawal of the AR and Road FSI benefits will severely hamper redevelopment.
State unlocks ‘wetland’ in Goregaon
A 500-acre parcel of land, the largest chunk of private open space in the western suburbs that could easily fit in as many as 23 Oval Maidans but which environmentalists call an eco-sensitive zone, has finally been opened up by the state government for construction. The land at Pahadi in Goregaon (West) belongs to the Byramjee Jeejeebhoy Group. About 106 acres of it is controlled by the Lucknow-headquartered Sahara Group.
The state government’s move to open up a 500-acre private open sprawl in Goregaon (W) for development has left environmentalists fuming even as builders are rubbing their hands in glee. The Sahara Group’s 106 acres, earlier defined as a “no development zone’’, has now been declared a Special Development Zone (SDZ). Under the SDZ policy, the owner will surrender more than half the plot to the BMC for affordable housing, public amenities, and open spaces. On the remaining portion of the land, additional construction incentives will apply for building residential or commercial buildings.
Construction industry sources said anticipating the government’s plan to open up the Sahara portion, some of Mumbai’s biggest developers have approached them to jointly develop the plot through a development management agreement. These include D B Realty, Shapoorji Pallonji, Piramals, Subodh Runwal Group, Omkar and Suntek Realty. Sources said a prominent Pune based builder was a key player in getting this land opened up for development. “The development potential of this 106 acres could be worth Rs 10,000 crore to Rs 15,000 crore,’’ said an industry expert.
Pay 25% of RR rate to convert collector land to freehold
Nearly two years after it amended the Maharashtra Land Revenue Code, 1966, the state on Tuesday approved the premium for conversion of collector’s land (class II occupancy land) and leasehold land into freehold land—one that allows individuals and societies to do what they wish with the land they own. For class II occupancy land, residents will have to cough up 25% of the ready reckoner rate as premium. There are 3,000 housing societies, largely in the suburbs, which are on collector’s land (there are 22,000 such societies across the state). Class II occupancy lands are spread largely in the eastern suburbs across areas like Ghatkopar and Chembur.
The collector has been appointed as the competent authority to collect the premium and carry out the conversion. The law is applicable only to plots given to housing societies, or for commercial purposes. It is not applicable to lands given to charities, hospitals, educational institutions, industry, and gymkhanas. Freehold land doesn’t require government permission to be sought for sale, transfer, mortgage, etc. In case of leasehold plots, if the lease is for less than 99 years, the premium is 50% of the RR rate and if for more than 99 years, the premium is 37.5% of the rate. In case of housing societies to which land is granted on a leasehold basis, the premium is 25%. These rates are applicable only for three years. There are 2,200 leasehold plots in Mumbai, of which 1,800 have been given to private individuals or societies and 400 given to government agencies. In the island city, most housing societies are on leasehold plots. These are spread across places like Nariman Point, Churchgate, Dadar, and Wadala.
Your Home is Safe
The Insolvency and Bankruptcy Code (IBC) has now included the home-buyer as a financial creditor. It works as a tool of empowerment for investors in projects where the builder has declared bankruptcy. The IBC has, therefore, allowed the home-buyer to be a part of the process in order to rescue the project. The IBC will now allow the home-buyer to be a part of the project and negotiations to rebuild the project that a developer abandons after declaring bankruptcy. This is a major change for the real estate industry while also empowering the home-buyer who has paid the developer to complete the project, thereby reducing the number of developer-abandoned projects.
In July, the government passed the rule that once a developer files his company with the IBC, the home-buyer who has given his share of the money to kick-start the project will be a part of the liquidation process and therefore, a part of a restructuring and buying out of the company by another. The rule was made in order to ensure that home-buyers as financial creditors be allowed on the Council of Creditors (CoC) so that the restructuring of the company takes place and the project gets completed. Ramesh Vaidyananthan Advaya, managing director and founder, Advaya Legal, says, “As a home-buyer from whom the developer has taken money, but later filed for bankruptcy – you can be a part of the Council. You can make sure that the project is taken over by another developer who is financially more secure. Here, you will get your home much later but at least there is hope of getting it.”
Source: Times Property, Saturday 22 September 2018
The government may ask various planning authorities in the city to keep a common interface and use the BMC single-window system to accept and process all building construction applications. The aim is to expedite the approval process and check corruption. The Central ministry of housing and urban affairs had discussed the issue with the BMC and other stakeholders recently. Sources said the Union ministry was keen to have the system and will discuss the issue with the state government and other agencies jointly soon. An official said besides making things easy for the public, the move will help to improve the country’s ranking.
There are five planning authorities in the city: BMC, MMRDA, Mhada, SRA, and MIDC. Two more agencies, the Mumbai Metro Rail Corporation (MMRC) and the Mumbai Port Trust (MbPT), are in process of getting the status of the planning authority. Planning authorities decide on the development of land that falls under their jurisdiction and they depend on the BMC for utilities. Currently, builders submit the construction file to the respective agencies under whose jurisdiction their landfalls. The builders then need to approach the BMC — in case the BMC is not the planning authority for the area where the plot falls — to get NOCs from its drainage, sewage and water department along with the DP remark. Builders also need to approach the collector officer for property card remark for properties in any part of the city. The BMC re-engineered its building proposal software (Auto-DCR) two years after spending Rs 12 crore and integrated it with the collector office and other agencies.
All roads lead to Naigaon
Strategically located between Mira-Bhayandar and Vasai-Virar, Naigaon offers the next big investment opportunity for aspirational home-buyers. Connectivity, infrastructure and easy accessibility are the prime factors for the tremendous growth of this location. Many of the recently launched infrastructure projects can be easily accessed from Naigaon. The government plans to de-clutter Mumbai’s urban sprawl and decentralisegrowth areas. This has set off a rising demand for places like Naigaon. Considering the importance of connectivity and long travel hours, people will save almost 50 per cent of commute time.
As the next big investment opportunity, Naigaon offers good capital appreciation for investors who are either seeking to buy their first home or are looking at investing in a property with good returns. Naigaon certainly offers a perfect combination of serenity with growth. Availability of abundant land for projects at low rates at Naigaon coupled with the easy access to Thane, Navi Mumbai, Ahmedabad and other business centres in the region and the rapid pace of infrastructure development have contributed to the rising expectations from Naigaon.
Many real estate experts even attribute the locational advantages of Naigaon to the expectations that this region will witness phenomenal growth in the coming years. In the recent past, several well-established real estate developers have started new projects in Naigaon. Known for its ultra-luxury projects in Mumbai, Sunteck Realty has forayed into the aspirational luxury housing segment with its project of over 100 acres in Naigaon. Located just 5 mins away from the Naigaon railway station and 500 metres away from Juichandra railway station, the project is easily accessible via 30-40 metre wide roads. It is an integrated township with worldclassinfrastructure and amenities such as shopping, entertainment, supermarket, healthcare and state-of-the-art clubhouse for discerning buyers who are looking at a lifestyle and not just a home.
The Deal is Real
Are you an investor or end-user? Irrespective of the buyer class you belong to, we give you a checklist to refer to before taking the plunge. Louis Glickman had once famously said the best investment on ‘earth’ is earth. Hence, whether one is intending to invest money and diversify one’s asset class or looking to self-occupy – the realty market is still a safe bet on the back of macro-level regulatory developments that have taken place in the last couple of quarters. However, the key to stable growth here would be to identify the purpose of investment and then, accordingly park one’s money.
The Commercial Market: If you are an INVESTOR looking at an income-producing office asset, do not ignore the following factors – Always invest in a property when the market is low, so that land can be acquired at a lower price; An investor must ensure that his property is located near popular social attractions such as cinema multiplexes, restaurants or commercial hubs; The more premium a location, higher is the investment, yielding even higher results; A good tenant can significantly increase the value of a commercial property.
If you are buying a commercial property for SELF-USE, ensure that it meets the following specifications – Site of the office: Can the office property be reached easily via all modes of transport? Is the location well-planned? If the answer to most of these questions is in the affirmative, then the location is a prime one; Grade of the building: Office buildings are generally classified as – Grade A, B or C building. Hence, make a decision depending on the kind of working environment you wish to give your employees; Maintenance of the property: The upkeep of commercial properties is quite high. Hence, ensure you have deep pockets so that you can keep up with the standards of the market; Engage with experts: Market analysts and lawyers will give you sound advice about the market and ensure you invest only in those projects that match your investment needs. – Viral Desai, national director – occupier solutions group, Knight Frank India
The Residential Market: If you are an INVESTOR, keep the following norms in mind – Have an eye for noteworthy infrastructural developments in the vicinity of the project as they will have a direct impact on the appreciation of the property; Commercial hubs in the area would lead to employment generation, which in turn would provide an encouraging rental opportunity. Hence, look out for that; Another aspect to look for while investing is the estimation of unsold inventory or resale opportunity in the area. While a high supply will limit the scope of capital appreciation, high unsold inventory will pose a threat to its resale potential. Also, rental yields will be affected on account of high supply as well as high unsold inventory;
If you are an END-USER, consider this before you lock the deal – Price of the property: This should be within your budget. One must not extend beyond means to purchase or the decision could prove detrimental in the long-term; Location: Easy access to workplace, educational centers, healthcare units, recreational spots among others is another key pre-requisite; Builders’ reputation and track-record: While RERA protects the interest of the consumers, it important to check the developer’s background and understand their success-to-failure ratio in order to avoid falling into any traps; Financial viability: One must have enough financial depth to service debt on a long-term basis.
Source: Times Property, Saturday 1 September 2018
Transfer fees: HC blow to hsg socs
In a setback to housing societies who get members to make a ‘voluntary donation’ at the time of sale of flat, the Bombay high court has ruled such payments are illegal. A housing society cannot recover excessive transfer fee from a member under the guise of ‘voluntary donation’, the court has ruled. Thirteen years after a Pune resident had claimed he was pressured to pay around Rs 5 lakh as a voluntary donation if he wanted to sell his bungalow property, justice Mridula Bhatkar ordered the housing society to refund the amount with interest. “A cooperative housing society..… is not expected to indulge in profiteering from members and, if such amount is earned, then it is taxable under the law. There is no bar on any member to pay a donation to the society, but it should be voluntary,” said Justice Bhatkar.
The judge remarked housing societies were known to charge extra from members. “Different ways are invented to earn more than legally permissible charges,” the judge said. The HC directed the society to refund Rs 4.75 lakh along with 8% interest from 2005. In the present case, a former member had accused Alankar Sahkari Cooperative Housing Society of forcing him to make a donation. The member claimed he was facing financial distress and hence had decided to sell the bungalow plot in the housing society. The committee, he claimed, sought a donation of Rs 5 lakh for their approval. The high court judge said, “A person facing financial crises will not donate Rs 5 lakh. There is a ceiling of Rs 25,000 for transfer fees.
Source: The Times of India, Monday 3 September 2018
The ‘wait and watch’ approach among residential property buyers is becoming less popular as the realty market has witnessed a slight rise in sales in the last few months. Industry experts attribute this increase to the stable property rates and numerous discounts that many developers offer. The realty market had remained unsteady for two years owing to the sudden announcement of demonetization. However, with the implementation of various policies that have given a boost to affordable housing, favorable home loan interest rates, followed by attractive offers from developers like free car parking, no GST payment; the buyers are now positive to make a big investment in property.
Owing to the implementation of policies like RERA, buyers today have gained much confidence encouraging them to enter the realty market. “At present, property prices are stable; and buyers are smart enough to understand that even if there is a price correction in future, it won’t be drastic. Also, they know that if they wait for some more months, there are chances of losing out on discount and offers that are available today. This period is the most favorable time for buyers as they can negotiate the best possible deal with the developer and go in for purchase,” concludes Parikh.
Source: Mumbai Mirror, Saturday 18 August 2018
MahaRERA ruling: Developer asked to compensate homebuyer for delay
The Maharashtra Real Estate Regulatory Authority (MahaRERA) has directed a Mumbai-based realty developer to repay 5% of the total payment made by the home buyer as compensation toward a delay in possession. A group of home buyers, following the delay in the delivery of project Sheth Midori in Mumbai’s Borivali suburb, had moved the authority seeking compensation on account of the delay. Further, the home buyers had also claimed that the developer was now demanding additional amounts for an alleged increase in the carpet area of the apartments; however, the developer had not provided details of the additional area.
During the hearing, the developer said he would hand over possession of the apartments in accordance with the plan of the respective apartments as mentioned in the agreements for sale and that no further charges toward the extra carpet area will be demanded. The authority has also directed the builder to pass on the GST input tax credit to home buyers. Gautam Chatterjee, Maha-RERA chairperson, ordered that in cases where the developer hasn’t handed over possession, he shall pay buyers an interest, as prescribed by the law. And in a specific home buyer’s case, he ordered the developer to refund since the complainant had paid 100% of the consideration amount to the developer in June 2017.
Source: The Times of India, Monday 20 August 2018
No single rule for taxing multiple houses
Owners should have adequate records to prove that they tried to find a tenant for their empty second house. Ace cricketer Sachin Tendulkar was recently involved in a dispute with the income tax department. He was unable to let out a flat in Pune despite his best efforts. Tendulkar, therefore, declared the income from the flat to be nil. The income tax department, however, took the view that he had to pay tax on notional rent for the vacant flat. “While this (Tendulkar’s) is a favorable judgment in respect of a property that was vacant throughout the year, there are contradictory judgments on whether the vacancy allowance should be granted to a property that is not let out at all during the financial year,” says Amarpal Chadha, tax partner and India mobility leader. He adds that it may be challenging to claim the benefit of vacancy allowance to the revenue authorities may not accept the claim. The ruling says that the cricketer made ‘reasonable effort’ to let out the property. But the term ‘reasonable effort’ is subjective and its interpretation can vary from case to case.
Taxation of rental income: If a person owns more than one house, and rents out the other properties that are not self-occupied, he needs to pay tax on rental income from them. But what happens if the property is not let out? In such cases, the house owner has to still pay tax on the notional income he would have received if the property was let out. The Income Tax Act even prescribes a method to calculate the ‘notional rent’ for vacant properties. “Factors such as location, the annual rateable value of the property fixed by municipalities, rents of similar properties in the neighborhood, and the rent that the property is likely to fetch should be considered,” says Mridhu Malhotra, associate director, Nangia Advisors.
Source: Business Standard, Thursday 23 August 2018
Pune: Setting new standards
While three cities in Maharashtra have made it to the Top Ten list in India’s first-ever livability index, Pune leads the chart nationally. Union Ministry of Housing and Urban Affair has recently released country’s maiden Ease of Living index to help cities assess their livability vis-àvis global and national benchmarks. Pune has secured an overall score of 58.11 points out of maximum 100. Besides, it was also ranked first in livability in the list of cities with a population between 10 lakh and 40 lakh.
Proximity to Mumbai is an advantage to Pune. The city has its own identity and being an IT and education hub, it offers an eclectic mix of urban lifestyle and employability. The sense of safety and good returns on investment make the city a haven for realty investors.
Source: The Times of India, Friday 31 August 2018
Tailor-made House: A new trend
The new concept of tailor-made houses has been successful in attracting buyers who wish to own a dream home. Tailor-made apartments are designed as per the buyer’s preferences. The city developers have been promoting this concept among buyers as it gives them the liberty to plan the inside house layout, design the interiors, as well as make the optimum utilization of space. “Tailormade concept is highly accepted in the micro-markets such as Mumbai, Pune, among others. It is highly accepted by working class people who want to utilize even their smallest area in a proper manner with the use of this concept,” says Aniket Haware, managing director of a realty firm. According to the experts, during the initial stage of planning, the participation of the customer is very high. Once the concept and design are finalized, the designing company, also known as facility provider, work on it. For a tailormade house, the developers usually introduce the designing company to the buyers, after which both buyers and interior designing company meet and have detailed discussions on how the buyer wants his or her house to be designed.
“This concept is not new in the international market; it has worked very well in the west, and it is slowly and gradually entering India’s real estate market. In India, working population has increased in each house due to which they don’t have time to check on the construction and other renovation works, and hence the trend of a tailor-made apartment is growing up. It provides no hassle of getting in touch with mason, painter, carpenter, and even escapes the mess of cement, concrete, and bricks,” says Rohit Poddar, managing director of another realty firm. In India, builders construct a project in a phased manner; this helps them to understand customers’ need and wants and accordingly launch another phase in the same project keeping their requirements in mind. “Once the entire wall and beam construction is done, developers inform consumers when the internal wall structure work begins. That’s the time, buyers get involved and share their customized internal plan,” informs Haware. In tailormade houses, buyers are given complete freedom to choose and design the interiors. Consumers can modify the internal structure unless and until it doesn’t affect the outside structure and overall safety.
Source: The Times of India, Friday 31 August 2018
Deduct TDS when buying a property from NRIs
The income tax (I-T) department says it will focus on tax deducted at source (TDS), especially in case of sale of property by non-resident Indians (NRIs), according to media reports. Both NRIs and those who make payouts to them need to understand the TDS provisions applicable or risk punishment. Any payment to an NRI which s chargeable to tax in India is subject to TDS, according to Section 195 of the I-T Act. Says Suresh Surana, founder, RSM Astute Consulting Group: “The rationale for applying TDS on NRIs’ income is better taxadministration, the same as in the case of residents.”
The TDS rules are, however, a little more stringent for NRIs. In the case of bank deposits, for instance, the TDS rate applicable to interest on a non-resident ordinary (NRO) account is 30%, whereas in the case of residents it is 10%. In the case of residents, surcharge and cess are not deducted while making non-salary payments. But, in the case of payments of NRIs surcharge and cess have to be levied, which increases the effective TDS rates. India has entered into Double Tax Avoidance Agreements (DTAA) with several countries. “Of DTAA and the provisions of the Indian IT Act, whichever is more beneficial to the taxpayer will apply,” says Archit Gupta, founder and chief executive officer, ClearTax.
“Form 15CA is a form for remittance filed by the person deducting TDS. In the case of certain payments, it becomes mandatory to obtain Form 15CB from a chartered accountant, too, besides filing 15CA,” says Gupta. Form 15CB is not required when the remittance does not exceed Rs.5 lakhs and does not require the Reserve Bank’s approval. Form 15CB is a certificate in which details of payment, TDS rate, deduction and other details of the nature and purpose of the remittance are verified by a chartered accountant. India follows a source-based taxation regime for NRIs. NRIs’ income that is received or deemed to be received in India, and income that accrues or arises or is deemed to accrue or arise in India, is taxed here.
A look inside the smart-home systems that affluent people use
Many of us have dreamed about living in a home where mundane tasks like washing the dishes or turning on the TV can be outsourced to a device. With the creation of products like the Amazon Echo and Google Home, that dream is closer to becoming a reality for the mass market. But if a few hundred of dollars can buy the average consumer these gadgets, what can those who have unlimited resources get out of their smart home systems? The answer: pretty much everything they want. “Affluent households are more likely to become early adopters of new technology than the average consumer, and smart home systems are no different,” says Winnie Bekmanis, who works in product marketing for the Internet of Things (IoT) at Qualcomm. “What differentiates the pricier smart home systems is the scale of installation and personalization.”Celebrity homes are the perfect examples of what personalized smart home systems can look like. In an interview with a tech website, actress Sofia Vergara talked about building a smart house that lets her not only watch movies in her at-home theatre but also allows her to Skype with family and use her social media on a mega screen. According to news reports, media mogul Oprah Winfrey spent $14million on a high-tech ski home in Telluride where a radiant heat system keeps the driveway completely snow free. Bekmanis says, when it comes to luxurious home, those systems that can intuitively adapt to the entertainment or security preferences of the homeowner are naturally more desirable.
Source: Business Standard, Friday 3 August 2018
Rera covers long-term lease
Provisions of the real estate regulatory law were applicable to three apartments booked on a 999-year ‘agreement to lease’ in Lavasa, near Pune, and for which 80% of “purchase price” had been paid, said the Bombay high court on Tuesday. It added that complaints for compensation for a delay of six to seven years in possession of these apartments could be decided by the adjudication officer under MahaRera, the state’s real estate regulatory authority. Justice Shalini Phansalkar-Joshi, after analyzing the salutary object of Real Estate (Regulation and Development) Act (Rera), held that “merely because the legislation excluded allotment when given on rent, it does not exclude long-term lease… That would be defeating and frustrating the object of the Act”. The judge dismissed three appeals filed by Lavasa Corporation, which is developing a township project, registered under Rera.
The appeals were against orders passed by the Maharashtra real estate appellate tribunal, which had held that Rera provisions were applicable for the three persons who had booked apartments through ‘agreements to lease’ at Lavasa. Their complaints could be entertained under section 18, providing for compensation with interest for delay by a builder in giving possession in terms of ‘agreement for sale’. An adjudicating officer under Rera had earlier held that since the agreement was not of ‘sale’, they cannot seek compensation from the developer, here, the lessor.
Be Smart: Own A Place to call Home
The constant debate between the benefits of buying and renting never ceases. While renting may be a wise decision for short durations, EMIs are the choice for those focused on future benefits. This Independence Day, free yourself from the burden of rent and enjoy a sense of ownership. A number of people, who come to the city to make a living, often spend a major chunk of their salary on monthly rent. And it doesn’t end there; the hassle of moving homes often adds to the expense – not to mention the yearly deposit. And after all that trouble, they neither have a house to call home nor land as asset.
Millennials who have learnt to strike a balance between the traditional and modern way of living, those who live independently and yet have a certain sense of belonging and responsibility now understand why buying rather than renting is the smart way to go. A home starts appreciating as soon as you buy it; better returns and a place to call your own are among the many perks of buying a home. The decision to buy or rent is influenced by factors such as property prices and potential appreciation, annual income, job stability, prevailing rental yields, tax benefits and other investment opportunities and lifestyle.
Source: Times Property, Saturday 11 August 2018
GST & RERA Impact: DLF to sell only completed flats under the new biz model
DLF will sell apartments only when they get occupancy certificate after completing the project as part of its new business model to remove any uncertainty regarding costs and delivery timelines, a senior official of the realty major said. The decision assumes significance as the Indian real estate market, especially Delhi-NCR, has been facing huge delays in project executions, forcing home buyers to protest and move courts. Lakhs of home buyers are stuck in various projects of developers such as Jaypee group, Amrapali, Unitech and The 3C Company.
Highlighting the company’s new business model, DLF’s group CFO Saurabh Chawla said the company would sell only completed products now. “Customers are now averse to taking a risk and they prefer to buy ready-to-move-in apartments,” he added. Chawla said DLF will apply for occupancy certificates once the structure of the building is complete along with other infrastructure. The additional cost on increased working capital requirement would be marginal, he added. DLF currently has completed inventory worth about Rs.135 billion, which would be sold over the next 5-6 years. The company would continue to build a fresh inventory of completed product. DLF, along with its partner GIC, has started construction on the first phase of its 7 million sq ft housing projects in central Delhi.
Pune, Navi Mumbai, Gr Mum top ‘ease of living’ rankings
Cities in Maharashtra have taken the top three positions as well as the sixth rank in the first national survey of the most livable cities. Pune, Navi Mumbai and Greater Mumbai featured on the podium, while Thane was at number six. The Ease of Living Index of 111 cities, released on Monday, ranked Rampur in UP at the bottom, with Kohima in Nagaland and Patna in Bihar preceding it. Bengaluru, which has seen congestion become a serious drawback, ranks 58 and Hyderabad 27. Although Pune did not bag the top rank in any of the 15 parameters the cities were judged on, it finished in the first 10 in nine categories.
Not everyone is convinced by the rankings. “If Mumbai is considered liveable despite all this (long commutes and high pollution), it is really frightening as it means quality of life is even worse in other cities,” said Subodh Kumar, a former Mumbai municipal commissioner. Jodhpur is the cleanest railway station in the country, followed by Jaipur and Tirupati, according to a survey carried out by the Quality Council of India (QCI). The third such survey covered 407 stations, including 75 in A1 and 332 in A categories. Kalyan is the second dirtiest in the first category while Bandra (ranked 7th) is the only station from the city to figure in the top 10.
Mumbai 1st top ‘Ease of Living’ among mega cities, does well on mixed land use, open spaces
The national Ease of Living exercise by the Union home and urban affairs ministry is aimed at helping cities assess their liveability vis-à-vis global and national benchmarks and encourage cities to move towards an outcome-based approach to urban planning and management. Mumbai scored well on identity and culture (rank 2), public open spaces and mixed land use (1), assured water supply (3) and transportation and mobility (8). Surprisingly, the financial capital ranked 63 in economy and employment, 54 in reduced pollution, 23 in governance and 36 in education.
“While we are glad Mumbai has ranked third, we will look at areas where the city requires improvement as well. Once we have evaluated it, we will start filling in the gaps to improve our ranking the next time,” said additional municipal commissioner Vijay Singhal. In May, an independent team arrived and audited facilities across random locations. The BMC also had to provide water and noise samples from random locations. What worked in favour of Navi Mumbai was governance (rank 1), education (2), health (3), transportation and mobility (4) and assured water supply (7). It was let down by power supply (74), reduced pollution (48), housing and inclusiveness (35). Municipal commissioner Ramaswami N said he is happy Navi Mumbai is marginally behind Pune. Thane scored on power supply, transportation and mobility, ranking first, assured water supply (4) and employment (9). It came up short in safety and security (82), public open spaces (40), reduced pollution (53).
Office leasing activity across India’s top nine markets rose more than 10%, with a total leasing of over 20-million sq ft in the first half of 2018. Bengaluru, Delhi-NCR, Hyderabad, and Mumbai led the leasing activity with 80% share, showed data from CBRE South Asia. Continuing the trend, office space take-up was dominated by small and medium-sized transactions. Transactions with less than 10,000 sq ft space accounted for 44% of the transaction activity, while mid-sized transactions ranging between 10,000 sq ft and 50,000 sq ft held a 42% share. The share of large-sized deals with over 1,00,000 sq ft also rose marginally to about 5% from 4% in the previous quarter.
The ‘real’ty scene of Lonavla
Lonavla is by far a favorite with Mumbai residents and there is a good supply in the pipeline of row-houses and bungalows by leading players. There is also a healthy demand for plots in Lonavla. The prices for row houses range from Rs.1 crore to Rs 2.5 crore, for bungalows from Rs 1.5 crore to Rs 4.5 crore and for plots from Rs 25 lakh to Rs 1 crore. The Municipality is trying to better the roads by providing street lights and water. The future real estate potential is bright for Lonavla and experts predict that if planned aptly, Lonavla will become the center of Mumbai and Pune. The investment potential will be high for Lonavla as it assumes the character of a city.
However, one has to keep in mind that Lonavla is an extremely popular second home destination, and one has to calibrate his budget accordingly. Looking for the cheapest options may land one in locations and projects that offer nothing in terms of natural beauty and access to entertainment. Lonavla is a hotbed for local brokers, but it is advisable to deal only with established and reputed real estate consultants as this will ensure that there is complete transparency in the transaction and that the buyer’s interests are kept paramount.
Living in the clouds has its downside too
Most Mumbaikars look out of their windows at familiar sights of building blocks, unending construction, clogged streets or neighbors’ homes. Then there are those tucked away in apartments that climb into clouds and offer airliner views of the city. Up there the sights are sweeping and most spectacular — entire parks, zigzagging roofs, trains rendered toy-like, treetops and a whole lot of sky. Sounds of city life evaporate, along with closeup shots of urban squalor. Kicking back, watching wisps of cloud drift into the balcony or a storm roll in over the bay is just another day in the life of those crested 500 feet above the ground. However, in times of extreme weather, inhabitants of the upper levels of these rarefied flats feel the most vulnerable. Even as rain and winds bring relief to a sweltering Mumbai, the onset of monsoon can seem like a kamikaze attack for those living above the 30th floor as dark clouds blot out the sun, wind howls and raindrops pelt the window like little stones.
Those seeking a trophy apartment in the sky pay a premium for privacy, noiseless environment, and scenic views but loftiness requires time, effort and more than a little money to maintain. Mumbai currently has close to 30 major high rise projects of more than 50 stories. “Due to less friction on higher floors and lack of shading, the effect of rain and winds is multiplied,” says Tanvi Goyal, of Liases Foras, a real estate rating, and research firm. Then there are some veiled risks of living above ground. Not just in physical terms but in the minds too. When low clouds obscure the ground beneath, it is easy to lose all sense of time and perspective, they say. “Instead of seconds and minutes, you judge time in sunrises and sunsets. It lulls you into laziness,” confesses Hazel while her mother rues. “More clouds mean more calories. It’s hard to combat the craving for chai, pakora and bhajji all day.”
Non-residents’ real estate deals under TDS lens
Income tax (I-T) officials will intensify their focus on tax deducted at source (TDS) in the coming months, especially in relation to the sale of property by non-residents and other international transactions. Surveys will also be carried out for detecting noncompliance with obligations regarding withholding tax — a move that has come in for criticism from some tax-practitioners as it could result in harassment, even for smaller taxpayers. Last fiscal year, the I-T department had issued hundreds of prosecution notices, which also covered cases for short deduction or delayed remittance of TDS even by smaller business entities.
In its action plan for the current year ending March 31, 2019, the Central Board of Direct Taxes (CBDT), which is India’s apex direct tax policy formulation and administration body, points out that in several cases when real estate is purchased from nonresidents, the buyer of the property only deducts 1% TDS instead of the required 20%. These are ‘high risk’ cases and must
be dealt with on a priority basis, it adds. Further, I-T officials have been asked to collate data of sale of immovable property — available in annual information returns (AIRs) filed by property registrars — and match it with transactions on which TDS has been deducted to generate a list of defaulters. Action should then be appropriately taken, adds the CBDT plan for fiscal 2019.
‘Office leasing up 13% in H1’
The Indian office property market clocked its highest half-yearly leasing transaction volume in 6 years with 21 million sq ft of space leased across seven major cities in the country in the first half of 2018. The segment showed a robust growth at 13% on-year, said a recent report by Knight Frank India. This was led mainly by higher leasing activity in other services sectors, including consulting firms. Co-working service providers account for 13% of total transacted space, an emerging trend, while the share of information technology/ IT-enabled services declined. The office sector has been doing well with the vacancy levels at near zero levels in many cases, and rentals steadily moving up.
Introspection before investment
Sure, we all want to see our name-plate on our very own property. But there is more to it than just wishful thinking. Like the financial aspect of home-buying. There are several parameters to be considered before going for the big buy. This comprises of the following: Return on investment: The return on your investment should decide whether you want to keep your money in the bank or invest in a property. There are some important tools to evaluate this like the price-to-rent ratio where you can base your buying decision by dividing the cost of the house by the annual rent. If the ratio is below 15, you should buy else rent the house. Financial strength: You are a better judge of your own financial position. A realistic evaluation of how much will help you make a better buying decision. You will also be eligible to the amount of loan depending on your salary. Also, there should be some surplus after you pay the monthly EMI and household expenditure to cover your investment needs and any immediate rise in interest rates.
Income stability: Home loans are for long tenures, typically, 20 years or more. Banks will also check your employment record thoroughly before approving your home loans. But as a home-buyer, it is important that you are confident about your job stability. Economics: However, it is important to have an eye on the market indicators of the economy which can help you financially and make it easier to buy your dream home. Ease of disposability: It is a good idea to keep a future selling prospect in mind while buying a property. It is always better to buy in areas with good connectivity and accessibility to basic infrastructure. Also, good roads, schools, hospitals, malls earn good appreciation in your property. Such houses fetch quicker and better money when you dispose it.
Source: Mid-Day, Friday 27 July 2018
NRI not far away
With major regulatory reforms underway, this is the right time for Non Resident Indians (N R Is) to enter the Indian realty market. The real estate sector, in the recent past, has been impacted by several policy changes. All these changes influence the decision of buyers not just in India but also those located outside the country.
A Non-resident Indian (NRI) can legally purchase or sell residential or commercial property in India, except agricultural land. This is applicable for both NRI citizens and Persons of Indian Origin (PIOs).
If you are a potential home buyer, the Maharashtra Real Estate Regulatory Authority (MahaRERA) has just made your life considerably easier. Now, instead of running from one builder’s office to another, you can access all the information you want regarding a project with just a click. On Friday, the realty regulator went live and began mapping all the development projects registered with it. Using a Geographical Information System (GIS), over 4,000 projects have already been mapped out.
Home buyers just have to click on the project blimp to access the information, including all its certificates, registration number, and location coordinates. “MahaRERA will be the first state real estate authority to provide this feature in the country,” said MahaRERA chairperson Gautam Chatterji. Has the Regulator begins mapping of registered projects; buyers can now access info on amenities and other projects in close proximity.
Now, hsg socs need to give only 10 docus to get to own land
It’s good news for around 10,000 housing societies in Mumbai and thousands more in Navi Mumbai, Thane, Pune and other cities who have been struggling to get deemed conveyance—ownership right of plot certificate—from builders. Last week, the state co-operatives department issued a government resolution (GR) saying only 10 documents need to be submitted while making an online application, and this is to be followed with an offline application at the office of the district deputy registrar (DDR), said a state official requesting anonymity.
The co-operatives department has merged 10 GRs and scrapped two others to simplify the process for deemed conveyance. These 10 GRs had been issued by various departments since 2010, leading to delay in resolving matters. The co-operatives department has no record on a total number of deemed conveyances issued till date. Many builders in Mumbai and other urban centers in the state are known to withhold conveyance in order to continue exploiting the ownership of the title for rental incomes in various forms or to assert future development rights.
Investing in COMMERCIAL Property for investment!!!
Though traditionally the domain of institutional investors or heavyweight business houses, many retail investors are now getting into the office real estate game. Here’s understanding the dynamics of commercial real estate. For those keen to invest in real estate, commercial properties are a viable alternative. Today, even professionals like doctors, auditors, stock brokers, and lawyers are buying commercial properties for investment and self-use. A commercial property could be a small shop in a neighborhood, housing complex or at a mall. It could be a small office space or even a joint investment in a bigger office space.
Things to look for: Despite the availability of several options, investing in commercial real estate requires a lot of research and planning: 1) Location: Investors need to inquire about the demand of the location. If their product/service is not attracting the right customers, then it will be a futile investment. 2) Check developer credentials. An investor needs to do a thorough check of the developers’ credentials, potential for infrastructure development, access to public transport; 3) Expert advice: It is pertinent that the investor take the services of a reliable real estate agent and a sound lawyer to help ink a deal. 4) Proper research: If investing in a retail store, the investor should consider the frontage, foot-fall and the dynamics of the catchment. 5) Serving the purpose: If buying for self-use, entrepreneurs should ensure that the amenities in the project match their business needs. 6) If an investor is investing as an office asset, he should consider factors like the cash inflow, the vacancy factor, lease term, lock-in period and expiry date, long-term capital appreciation potential. He should also consider expenses like maintenance, property tax, and building insurance.
Source: Mid-Day, Friday 6 July 2018
CRISIL SME Tracker – With RERA, only disciplined builders stand a chance
Setting up of the Real Estate Regulatory Authority (RERA) has improved financial, legal and operational discipline in the sector, a survey of small builders rated by CRISIL has revealed. Builders have become cautious and are taking up handful projects for execution at any given point of time. They now have dedicated staff focused on ensuring compliance with RERA rules, and have become more transparent on disclosures and communication to customers through brochures or their websites. Besides, they have introduced various clauses in agreements with customers – including unit carpet area, possession date, defect liability, default and delay implications, etc. But the changeover to the RERA regime has also created its own share of challenges for these players.
Indian Realty turns good bet for Global Investors on Govt reforms
Institutional investors, including private equity, sovereign wealth and pension funds, continue to express rising appetite for Indian real estate. Matured yield-producing assets and competition among global investors for these assets have pushed the average investment per deal to $158 million, almost four times the average investment per deal concluded in 2011, showed data from Knight Frank India. Private equity investments through debt and equity instruments across various segments of real estate have shifted to a new paradigm post-2014 owing to a battery of reforms initiated by the government.
These investments, including platform deals and commitments, grew at a compounding annual growth rate (CAGR) of around 36% to $8.6 billion in 2017 from $2.5 billion in 2014. The Indian real estate sector was perceived by investors globally as developing in terms of quality assets across segments. However, the reforms and policy decisions over the past couple of years have collectively set a new order and changed the perception of global investors in India. Several deals are facing challenges due to the violation of construction norms in the assets as these investors do not want to get associated with non-complaint assets.
Source: The Economic Times, Tuesday 10 July 2018
Buyers today wish to have a house in a complex that offers holistic lifestyle
Property purchase is not an easy task. Many things are taken into consideration when it comes to buying a house. Earlier, most homebuyers looked for basic facilities around the housing complex such as the existence of good educational institutes, market, hospitals, among others. Though these are still sought, buyers today wish to have a house in a complex that offers a holistic lifestyle. “Projects that have modern and user-friendly amenities like a fully-equipped clubhouse, amphitheater, meditation pavilion, swimming pool, fitness center, kids’ play area, senior citizen corner and jogging track are in demand. Keeping the demand in view, most developers today aim to build a state-of-the-art project that would give the experience of luxurious living to the residents,” says a property expert.
Owning a home that offers a lifestyle fully aligned with the requirements of modern-day facilities makes the investment worthwhile. Besides luxurious amenities and basic facilities, another thing that most buyers prefer is to have a house in a location that will witness new infrastructure projects. With the announcement and on-going work of numerous infrastructure developments, many homebuyers wish to have a house in an area that will see major developments as it will eventually increase the property value and connectivity options to reach various parts of Mumbai. According to experts, the market is more ‘need driven’ rather than ‘greed driven’; buyers wish to put the money in the property that fulfills their need.
Source: Mumbai Mirror, Saturday 14 July 2018
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