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
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