India’s premier business district, the Bandra Kurla Complex (BKC), has taken yet another step to reposition itself as a business-cum-luxury residential district. Almost a year after the BJP-led government of Maharashtra relaxed norms permitting residential activity on plots reserved for commercial purposes in BKC, the state-run Mumbai Metropolitan Region Development Authority (MMRDA) has drawn up a plan to permit high rise residential activity in another one of its commercial blocks. While first permitting the activity in the G-block where top corporate houses have been allotted lands, the agency has now planned similar development in the neighboring E-block, where 24 high-end commercial establishments have come up on 160-hectare developable land.
MMRDA Commissioner RA Rajeev confirmed that the agency has floated a global tender for designing a master plan for the new mixed-used plan. While buildings in the E-text block are currently permitted to build up to 45 metres, the plan, said officials, is to increase this buildable space by permitting further verticalisation, up to 90 metres. Officials admitted that for such a plan to materialism, the MMRDA would first need clearance from the Union aviation ministry. The commercial district falls in the airport funnel zone and attracts curbs on permissible building height. For the past few years, the state government has been pushing the Union ministry for the relaxation of height norms, but the latter is yet to sanction it. “We have requested the Airport Authority of India (AAI) to conduct a fresh aeronautical study. We will be willing to bear expenses for the same. The proposal is under consideration of the AAI,” said Rajeev.
Metro-3 line: Prime properties nearby to get special access
As the real estate sector continues to be in the throes of an extended slump, a few top developers have found a novel way to attract buyers to their high-end projects. They have approached Mumbai Metro Rail Corporation (MMRC) asking them to provide direct access to the underground metro stations on the 33.5-km-long Colaba-Bandra-Seepz Metro-3 from their existing or proposed plots. Such arrangements are seen in Dubai Metro and New York subway stations, which provide exclusive access to swanky buildings and malls. In all seven real estate companies, including DB Realty, K Raheja and Oberoi, have expressed keenness. The MMRC received these requests through expression of interest in December 2019. Sources in MMRC said K Raheja has sought this facility for three of its properties, including JW Marriott hotel near the international airport terminal, and two other plots near the Science Museum station.
Indiabulls is looking at Acharya Atrey Chowk station for its Blu project while DB Realty is eyeing BKC and Science Museum stations for its plots at Tata Colony and Jijamata Nagar, respectively. All these are prime properties in Mumbai. An exclusive access will enhance their value even more. “We have told these developers that we shall create these special subways to connect their properties to the metro stations. However, they will have to bear the cost,” said an MMRC official. This means that once the underground station is ready, the MMRC will create a passage all the way to the building or plot. This subway will directly open on the concourse of the metro station from where people can access ticket counters. Such a move is also expected to reduce traffic congestion at the exits of these stations. MMRCL is expecting 13 lakh commuters per day on the Metro-3 line.
Housing Societies await new, ‘Improved’ Cooperative Act
With the new state government finally up and working, it is likely to announce the new cooperative act in a couple of weeks. The act governs the functioning of state-wide housing societies (CHS) which were barred from holding elections till December 31. Housing activists claimed that the new act is likely to include the many suggestions sent to the state cooperative department. A senior Mantralaya official of the cooperative department told mid-day that over a hundred suggestions and objections have been received regarding the cooperative act “but the entire department is working on the farmers’ loan waiver on top priority.” He said, “The housing election rules matter is yet to be finalised and work on it is under process. It will gain momentum only once the farmers’ loan waiver concludes.”
Most of the suggestions, the official said, are regarding continuing the old practice of letting housing societies, with less than 250 members, conduct their own elections. “We will be putting forward all the suggestions before the committee formed to frame the new rules. The committee’s final decision will be put before the Cabinet Minister for Cooperation Balasaheb Patil and also the Law and Judiciary department before it is made public, which should take another fortnight to a month,” he added.
The search for the perfect house
As a homebuyer, you may find the home search process isn’t everything you hoped and dreamed about. In short, it’s not as simple as it sounds. However, armed with a better understanding of how the realty industry works, as well as taking a hard look at your list of preferences, you may find there are more options out there than you thought. These are the things that you could consider before going for the buying decision.
Location: While location is often referred to as the most important aspect of real estate, it can also become the stumbling block if the home-buyer becomes overly specific about the search area. Buyers preferences include a central location, such as their work or a school as also things like commute time to work or close to family or social circle. While this makes sense, you could expand the location to a close-by area where you may be able to change your route or timing to make up for the additional distance. You might find the dream home you’ve been searching for that makes the extra drive worth coming home to. However, if you are hung up on a certain search parameter – create multiple searches. If there is a specific neighbourhood in which you would love to live, create a search just for that area, then develop another for a larger radius to leave no stone unturned.
Size of the apartment: Home size is usually broken down into living area, bedroom area and kitchen area with the additional space for bathrooms, toilets and balcony, if any. You may have a specific concept in mind when it comes to the size for different rooms. Like some people prefer a huge living room and don’t mind smaller bedrooms or vice versa. The concept of compact homes is also acceptable to many. Looking at different dimensions that fit into your budget may require you to explore different projects. Age of the Flat: Many consumers are particular about the age of the project as newer projects require less improvements in the near future and have a modern layout. So, if you are dead set on purchasing a home built in a specific time period, add 10 to 15 years to allow for outliers that may have been brought up to today’s standards through improvements made by the owner.
Source: Mid-Day, Friday 10 January 2020
New Year resolution be a home owner
Times Property enlists ten key takeaways of 2019 to unlock your dream home in 2020. Make the most of these milestones of last year to secure the key to your dream home this year. 1) Take the Plunge: It is options galore for homebuyers in 2020 as the property market realigns itself with new policy decisions. With financial support, policy boosters, and low home loan interest rates, the Indian real estate sector is expected to expand by 6.6 per cent, predicts Fitch Solutions, a global market insights firm. Mona Jalota, founder and MD, Krypton Global Investments, says, “The government has taken timely action by infusing capital in the realty sector. There has been a marked improvement in buyer sentiment with sales moving up by 25-30 per cent.” 2) Favourable home loan Interest rates: The average home loan interest rates stand at eight per cent, the lowest of the decade, giving you more options to buy your dream home and save tax. Nagesh Sharma, founder, Mera Loan Doctor, shares, “With home loans linked to repo rate, existing borrowers will start reaping the benefits of such cuts within three months. The home loan interest rate now stands at eight per cent, which means immediate benefit. This reduction would also increase the eligibility of new home loan borrowers.”
3) First-time Advantage: From October 1, 2019, the Reserve Bank of India (RBI) has mandated all banks to link the lending rate to the external benchmark to avoid different interest rates by lenders. For you, the homebuyer, this means greater transparency and lower interest rates. Vinit Deo, CMD, Posiview Consulting Partners, says, “Some incentives in income tax are applicable to first-time home-buyers, which they can avail to get a good deal on their dream home.” 4) Bank on a Home: The State Bank India (SBI) also reduced the benchmark-based rate, External Borrowing Rate (EBR) by 25 bps to 7.90 per cent from the current 8.05 per cent. The bank stated that the revised rates will come into effect from January 1, 2020. This means that home loan rates for new and existing borrowers, who have linked their loans to external benchmark, will be reduced by 25 bps. 5) Move in Early: The government’s special window to provide last mile funding for stalled housing projects is a boon for home-buyers who can now hope to move into their house this year. Janhavi Phadnis Bapat, chartered accountant and finance expert, says, “Home-buyers have been incentivised. Relaxation of External Commercial Borrowing (ECB) for affordable housing and a special window for affordable and mid-income housing sector with additional funding will help in reviving the sector. Tax cut may propel demand for commercial housing too.”
Source: Times Property, Saturday 11 January 2020
‘Allotment letter proof of investment in new house’
The Income-Tax Appellate Tribunal (ITAT), Mumbai bench, has upheld that a letter of allotment from the builder is sufficient proof of investment in a new house. This order will come as a relief to several taxpayers, as at times, execution of the ‘Agreement to Sell’ is delayed by the builder. This decision is important as a taxpayer is entitled to a deduction from long term capital gains made on sale of a house property, or any other capital asset if investments are made in a new house. These benefits, subject to certain conditions such as the time frame within which a new house must be purchased, are available under sections 54 and 54-F respectively, of the I-T Act. This deduction reduces the taxable component of the capital gains and results in a lower tax outgo. “In this case, the ITAT rightly held, by following earlier judicial precedents, that the taxpayer had acquired domain over the new house property. It noted that a substantial amount was paid on the basis of the letter of allotment, and the taxpayer was therefore entitled to the benefit of exemption on reinvestment in a residential house. What is important in such a case is not the acquisition of legal title to the property, but acquisition of substantial domain over the new property,” explains Gautam Nayak, tax partner, CNK and Associates, a firm of chartered accountants.
Typically, during the course of assessment, the I-T officer seeks evidence to substantiate the tax deductions claimed in the tax return. In this particular matter, the I-T department denied the deductions from LTCGs claimed. Its contention was that the amounts paid by the taxpayer under the letter of allotment are in the nature of an advance to the builder. Thus, a sum of Rs 76.26 lakh and Rs 16.84 lakh claimed as a deduction was denied. At the first level of appeals, the Commissioner (I-T) Appeals had ruled in favour of the taxpayer. The Appellate Commissioner had observed that the taxpayer had paid substantial amount of consideration to the builder. The allotment letter was final and binding. The Appellate Commissioner also relied on the decisions of the Bombay HC and ITAT decisions, in other similar cases. The ITAT upheld the Appellate Commissioner’s order and dismissed the appeal filed by the I-T department.
Global investors upbeat on Indian realty
Sustained robust demand for office spaces has pushed leasing activity across the country in 2019 to a new record high. The demand is expected to remain strong in 2020 with occupiers’ preference for pre-leasing commercial real estate to future-proof their portfolios and hedge against rental escalations. India’s commercial space absorption hit a new high of over 60 million sq ft in 2019, showed two independent data reports. Pan India gross office leasing volumes touched a 69.4 million sq ft in 2019, compared to 49.5 million sq ft a year ago, according to Cushman & Wakefield. Gross leasing activity, according to CBRE South Asia, grew more than 25% from a year ago to touch a historic-high of 61.6 million sq ft. The year saw record breaking pre-leasing activity; vacancy levels stayed low despite robust supply and rentals continues to rise owing to strong growth momentum.
“Interestingly, the absorption figure for 2019 exceeds cumulative absorption of 2018 and 2017. Occupiers from the IT space expanded their real estate portfolio aggressively and contributed to the maximum share of leasing activity across sectors,” said Anshul Jain, country head & managing director, Cushman & Wakefield India. “On many notes, the office leasing performance in India surpassed industry expectations and paves the way for an optimistic year ahead.” Global investors continued investing in Indian real estate despite slow sales momentum in residential segment as demand for office properties was sustained and offered superior returns. Indian real estate attracted over $6.06 billion investments in 2019 led by office segment, fetching more than 40% of the total funds deployment. Among the key markets, Mumbai dominated the investments into office sector during the year followed by the National Capital Region (NCR) and Hyderabad, showed the CBRE South Asia data.
Realty lobby group rolls out first online portal
Real estate lobby group NAREDCO has launched the country’s first e-commerce portal, www.housingforall.com, for ready-to-move in houses which its members will upload for home buyers. The organisation said the developers will be allowed to upload the details of projects that have got occupation certificates (OCs) for the next one month, and then it will be open for home buyers with a 45-day sale period. For the initial 15 days, buyers will be able to view offers and shortlist their homes and will be able to start making purchases from March 1 till March 31. While Union housing secretary Durga Shankar Mishra used the analogy of an ecommerce giant to say this could be like the “Amazon for real estate sector”, experts were of the view that people don’t buy houses online, though the portal will help them to get all the details and work as a facilitator.
National Real Estate Development Council (NAREDCO) claimed that builders will make the best offer to buyers and they can book directly through the portal with a payment of Rs 25,000. The booking amount will be fully refundable. It said at least 1,000 projects would be listed on this portal to give maximum option to the buyers. Launching the portal, Mishra said, “It is a huge step for prospective home buyers. While having a discussion with the stakeholders, I told them that credibility needs to be the most important factor in this portal. If a person is willing to buy a property then location, price should be exactly what is promised on the portal.”
MahaRERA forms self-regulatory bodies for stalled projects
In a first, the state housing regulator, MahaRERA, has co-opted two developer bodies — the NAREDCO and MCHI-CREDAI — and made them Self-Regulatory Organisations (SRO). This was done to improve awareness and compliance of rules and to facilitate the completion of stalled projects. MahaRERA chief Gautam Chatterjee, while addressing the Builders Association of India (BAI) on January 11, explained the functioning of the SROs, adding that RERA’s (Real Estate Regulatory Authority) power won’t be shared with the organisations. The concept of an SRO was introduced through an amendment in the MahaRERA Act in December 2019. BAI chairman Gyan Madhani welcomed the SRO, saying, “SROs can facilitate the completion of stalled projects as with MahaRERA’s assistance, our members can chip in and help finish projects. Over 100 projects currently remain stalled.”
Instrumental in improving compliance, SRO is an extended arm of the MahaRERA. “The SRO must conduct awareness programmes for its members and empower them with relevant information and technical support. Names of the contractors who help finish projects will be displayed on the MahaRERA website,” said Ramesh Prabhu, founder of MahaSeWA (Maharashtra Societies Welfare Association). Prabhu added that the SRO will be successful only if MahaRERA ensures that it does not become a builders’ lobby. He suggested that the regulator can facilitate forming an Association of Allottees for each project and of different stakeholders such as consumers, architects, engineers, financial institutions and chartered accountants to ensure transparency and accountability. Prabhu recently helped MahaRERA complete two stalled projects in Mira Road. The three promoters of a residential block, Tanvi, got into a dispute and the project went into litigation. Stalled since 2012, its construction was resumed after the building’s flat owners’ association approached the MahaRERA. “The project is in its last stage of completion,” Prabhu said.
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