Tuesday, 8 August 2017

MahaRERA to fine 480 housing projects Rs 50,000 each for deadline breach

Consumer forums and registered builders across the state had been demanding that the MahaRERA issue a circular or direction to stop registration of projects without any penalty after the deadline


The Maharashtra Real EstateRegulatory Authority (MahaRERA) on Wednesday decided to slap a penalty of Rs 50,000 each on the 480 ongoing housing projects that registered with it after the July 31 deadline.

"We had allowed the developers to register their projects, but a decision on the penalty was pending. At a meeting on Wednesday, we decided to impose penalty on the projects registered after the deadline," said MahaRERA secretary Vasant Prabhu.

A decision on the penalty to be slapped on projects registered after August 3 will be taken later, he added.

Consumer forums and registered builders across the state had been demanding that the MahaRERA issue a circular or direction to stop registration of projects without any penalty after the deadline.

“We will convene another meeting to finalize the penalty to be slapped on projects registered on and after August 3,” Prabhu told TOI, adding that there would not be any deadline extension “as it is against the law”.

Section 3 of the Real Estate Regulatory Act (RERA) states that no extension for project registration will be allowed and developers registering their projects will be penalized under Section 59 (non-registration) of the law. The quantum of penalty can be 10% of the project cost and even imprisonment, if the builder concerned does not comply with the order.

Nearly 11,000 projects have been registered with MahaRERA as the deadline came to an end on July 31. Officials said developers still not under the RERA ambit can upload their documents on the website. “But each case will be examined for penalty,” an official said.

The MahaRERA website saw registration of 10,852 ongoing housing projects as the official deadline came to an end. Pune district topped the number of registrations with 2,908 (26.8%) applications.

In the meantime, a circular issued by the Union government stated that Maha-RERA has been entrusted with the additional responsibility of Dadar and Nagar Haveli and Diu and Daman territories in the absence of RERA authority in these union territories.



Saturday, 5 August 2017

Goa extends RERA deadline till October on delay in notifying rules

The central Real Estate (Regulation and Development) Act (RERA) came into effect on May 1, 2017, exactly a year after it was passed by Parliament


PANAJI: A delay in notifying the Real Estate (Regulation and Development) Act (RERA) rules for Goa has once again delivered a setback to consumers who were waiting for RERA to be enforced before buying homes. The BJPgovernment on Sunday extended the deadline to October for ongoing projects to register with RERA, even though the central government and other states have clearly refused to grant an extension.

The central Real Estate (Regulation and Development) Act (RERA) came into effect on May 1, 2017, exactly a year after it was passed by Parliament. As per the Act, developers, projects and agents had till July 31 to mandatorily register their projects with the Real Estate Regulatory Authority.

Any unregistered project would be deemed to be unauthorized by the regulator, but since the state government has failed to notify the rules and the authority as on date, the ministry of urban development has given Goan builders additional time to register with RERA.

TOI had reported on July 15, that the Goa government was likely to accept the demands from builders and extend the deadline by three months.

“Builders and promoters can submit their applications of new and ongoing projects in the prescribed form which can be downloaded from the website. For ongoing projects, applications for registration will be accepted upto October 31, 2017, without levy of penalty,” designated Real Estate Regulatory Authority Sudhir Mahajan said.

The central law, which was enacted to regulate the real estate sector and secure the interest of consumers, states that no builder can advertise, market or sell a plot, apartment or building without registering the real estate project with the Real Estate Regulatory Authority.

A builder has to pay Rs 10 per sqm of area to the regulator as registration fees for the project.

Goa is one of the few states in the country which has failed to notify the RERA rules. Officials said, the RERA rules for Goa have been framed along the lines of the regulations notified by Maharashtra, which has partially diluted the penalties for non-compliance by builders.

“Notification of the rules will take time. We will try to do it at the earliest,” Mahajan said to TOI when asked if the rules under RERA will be notified in the coming days.

The new regulatory authority was meant to end the uncertainty for home buyers, bring transparency and protect buyers from unscrupulous builders.



Tuesday, 1 August 2017

Builders take Centre to court, say RERA illegal


Earlier builders’ demand to exclude incomplete projects was turned down by the Centre saying the law was enacted to bring relief to crores of home buyers who had been waiting for their flats for years



NEW DELHI: A bunch of builders have approached two high courts challenging some of the key provisions in the Real Estate Regulation Act (RERA) including binging all “ongoing” projects under regulation and penalties for failure to register such projects. They have pleaded that these provisions have retrospective effect since the projects were started when there was no such law and hence it’s illegal.

Earlier builders’ demand to exclude incomplete projects was turned down by the Centre saying the law was enacted to bring relief to crores of home buyers who had been waiting for their flats for years, even after making full payment. According to the law, the mandatory registration of incomplete and new projects with the regulator will have to be done by August 1, else the builders face the risk of paying penalties.

The builders have been opposing this provision amid reports that most of them are cash strapped. Moreover, the law brings transparency and accountability and property developers have to give fresh timelines for completion of projects. The timelines will have to be adhered to.

While Builders and Developers Welfare Association has filed a PIL in Madhya Pradesh High Court, Swapnil Developers has challenged provisions of RERA in the Nagpur bench of Bombay High Court. These cases are coming up for hearing in the next one week.

Sources in the housing and urban affairs ministry said RERA is not a law with retrospective effect since it covers all projects, which have not got completion certificate by May 1, 2017. Secondly, the penal provisions come to effect only after the law came to existence.

Till now 22 states and seven Union Territories have got proper or interim regulators and real estate projects can be registered with them.

Builders have challenged the Centre’s right to enact the law relating to land, which is a state subject, and how submitting details of projects to the regulator would amount to infringement of right to privacy.

“The law came into force in March 2016 and there was enough time to complete the ongoing projects. The law says the builders will have to give fresh timeline while registering all projects including the ongoing ones,” a government official said.

He added that the law has been made under the relevant constitutional provisions of the Concurrent List and the ministry had even obtained opinion of the law ministry in June 2012. “The RERA does not provide for matters relating to ‘land’ or ‘local authority’. It aims to regulate the contractual obligations between the builders and buyers. It focuses on resolving disputes in the sector,” the official added.



Saturday, 29 July 2017

Madhya Pradesh RERA issues notice to Gammon India

Gammon authorities, however, have rejected her charges



BHOPAL: Following complaints raised by a buyer, the Madhya Pradesh Real Estate Regulatory Authority (RERA) issued notice to Gammon India's Shrishti CBD residential project in Bhopal. The complaint was made last week; and after verification of the charges, a notice was issued to Gammon.

State RERA member Dinesh Kumar Naik confirmed to TOI that a notice has been served to Gammon. Among the charges levelled against project authorities, the complainant, Chandana C Arora alleged issues of payment and possession. She said: "Gammon Shrishti is supposedly the most exorbitant housing project in the state and we have willingly paid huge amount of money for the location and its credibility of government land. Gammon has en-cashed these two things for maximum monetary benefit. If builder is not delivering or is looting the buyers' right under the nose of the state government and MP RERA, it is more of a problem for the above two, rather than for us as buyers," Arora said.

Arora said that till October 2015, she had paid 90% of the total sale price with the assurance that possession would be given by mid or late 2015. However, till date possession has not been given. She added that others who had invested in the project would soon approach RERA as well.

Gammon authorities, however, have rejected her charges.

The project in question has not been registered with RERA yet. It is mandatory for a project to register with RERA in 3 months from May 1 - the date RERA came into existence.






Monday, 24 July 2017

Builders' FY18 performance may be hit on delayed implementation of RERA ICRA

The agency expects RERA, which became effective from May 1 this year, to increase customer confidence and improve demand prospects over the long term


NEW DELHI: Delayed implementation of the the Real Estate (Regulation and Development) Act, 2016 (RERA) and transition to the new regulatory framework is expected to impact the operational performance of real estate developers during financial year 2017-18, according to rating agency ICRA.

Howeever, the agency expects RERA, which became effective from May 1 this year, to increase customer confidence and improve demand prospects over the long term.

“The current transition period of RERA implementation is expected to be challenging for developers as they need to realign their business operations to comply with the new regulations," said K Ravichandran, Senior Vice President and Group Head, ICRA.

Ravichandran also expects the constraints imposed by the Act to adversely impact the business model of unorganised developers and to bring some level of consolidation in the 
industry.

"This will benefit larger developers who have the resources and financial flexibility to withstand the near term challenges and scale up execution levels as required," he added.

The provisions of the Act will also significantly impact developers’ financial profile as it will raise their working capital requirements and increase reliance on equity or debt financing, according to the rating agency.

"With the commencement certificate being a pre-requisite for registration and sale of projects, developers will no longer be able to part-finance some of the pre-development costs with customer advances, said Shubham Jain, Vice President and Sector Head, ICRA.

Moreover, Jain feels the restrictions on withdrawal of customer advances will reduce cash flow fungibility across projects and increase working capital requirements.



Saturday, 22 July 2017

Maha RERA allows builders to correct project docs from Sept

MahaRera announced the changes on Monday through a circular issued to encourage developers to speed up the registration of their projects with the authority


PUNE: Developers can from September 1 make revisions or corrections in their uploaded documents following MahaRera's permission and a fee of Rs 5,000 for every change.

MahaRera announced the changes on Monday through a circular issued to encourage developers to speed up the registration of their projects with the authority.

The new circular comes a relief for the developers, who had repeatedly said that they should be allowed to correct the documents uploaded and cleared by MahaRERA. The earlier rules did not allow them to make any such revisions and corrections.

With MahaRERA estimating that there are over 10,000 ongoing projects in the state, there was less than 5% registration by developers till July 15.

"Till Wednesday, we saw 898 developers registering with us. We hope that the registration with MahaRERA for the ongoing projects will speed up after the new circular," MahaRERA secretary Vasant Prabhu said.

He added that with every revision or correction, they would have to pay a fine as stated in the circular put up on the website. Besides the correction clause, the circular also mentions project detail updates within three months from registration.

Credai Maharashtra president Shantilal Kataria said the new circular would encourage the developers to upload their documents sooner. "In the last two days, more than 400 projects have been registered. We are urging all developers to register with MahaRERA as soon as possible," he said.

A developer, who did not want to be named, said the scope to make revisions or corrections was a long-pending demand of the developers. 'They should have done it a month ago. It would have made the builders feel confident to register their projects earlier," he said.






Tuesday, 18 July 2017

DB Realty partners Radius group for housing project in Mumbai

Indo Global Soft Solutions and Technologies is part of realty firm Radius group


NEW DELHI: DB Realty Ltd on Monday said its subsidiary firm has entered into an agreement with a Radius group's firm to develop a housing project in Mumbai.
DB Realty's arm Neelkamal Realtors Tower has entered into a development management agreement with Indo Global Soft Solutions and Technologies Pvt Ltd for the development of its Orchid Height project on over 19,000 sq meter land parcel, the Mumbai-based developer said in a regulatory filing.
Indo Global Soft Solutions and Technologies is part of realty firm Radius group.
As per the agreement, Indo will arrange the entire funding required for the project and will be jointly responsible to construct, develop and market the housing project with construction area of 3.2 million sq ft.
Indo Global has provided the initial funding requirement for fast completion of the project.





Saturday, 15 July 2017

Godrej adds 2 housing projects in Bengaluru, Gurgaon

Godrej Properties today announced expanding in Bengaluru and Gurgaon markets by adding two housing projects comprising 1.6 million sq ft of saleable area.

The real estate arm of the Godrej group said it has added a new group housing project in Gurgaon. 

"This project will offer approximately 98,000 square meters (approximately 1.05 million sq ft) of saleable area and will be developed as a modern group housing development," the Mumbai-based developer said in a statement.

This is company's 11th project within the National Capital Region (NCR) market where it entered 5 years ago.

"This fits with our strategy of building our presence in the country's leading real estate markets. We look forward to delivering an outstanding project," said Pirojsha Godrej, Executive Chairman, Godrej Properties.

In a separate statement, the company said it has signed a development management agreement for a premium group housing project on Magadi road in West Bangalore.

"This project will offer approximately 58,000 square meters (approximately 6,00,000 sq ft) of saleable area," it said, adding that this is company's first project in the micro market of West Bangalore and 11th project in Bangalore.

"Bangalore is a key market for us and this project addition fits well with our strategy of expanding our presence across the country's largest real estate markets," Goderj said.

The company did not disclose the name of companies or land owners with whom it has tied up to develop these two projects.

It is currently developing residential, commercial and township projects spread across 136.34 million sq ft in 12 cities.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)


Wednesday, 12 July 2017

Despite anti-profiteering rules, tax on new flats in Nagpur higher under GST

Though not covered by GST, stamp duty is a major tax component in buying a home



NAGPUR: The anti-profiteering provisions of Goods and Services Tax (GST) call for builders to pass on the benefit on account of input tax credit (ITC) to buyers. However, the final benefit to a buyer would be nil, if the stamp duty is also taken into account, say calculations cited by builders and other experts.

Though not covered by GST, stamp duty is a major tax component in buying a home. Loaded with cess for NMC, Metro Rail, NIT and registration charges, it comes to 8.5% of the cost of a house in the city.

In pre-GST era, there was also 1% VAT and 4.5% service tax to account for, taking the entire tax component to 14%, including stamp duty. Now, the GST applicable is 18%, but after passing on the input credit, tax-cum-stamp duty would come to 14.5% or even higher, say realtors here.

This is how it works out, according to calculations by CREDAI, considering the scenario in Nagpur. GST is applicable at a rate of 18%. A deduction of 30% on the sale price is available as abatement towards land cost. This brings the effective base rate of GST to 12%. Now, if input credit is deducted, net GST rate chargeable from the buyer comes anywhere between 7% to 10%. If the stamp duty and registration component is added to GST, the tax would be 15.5% to 18.5%, says Gaurav Agarwala, secretary of CREDAI Nagpur.

In Nagpur, construction cost does not go beyond Rs1,500 a square feet. So, for a flat worth Rs3,000 a square feet, net GST after deducting the credit comes to 7% to 8%. It comes to 8% to 9% for floor price of Rs6,000 to 7,000 per square feet, and nearly 10% for 
flats in the range of 9,000 square feet and above. On this, 8.5% stamp duty would be added, said Agarwala. There is a demand to remove NMC cess, which would give relief of 1%, he said.

The input credit benefit would be less in premium localities since the component of land cost is higher here. The abatement available is fixed at 30% of the sale price. However, in high-end localities, a big chunk of the sale price constitutes the land price with input on materials or services remaining the same everywhere, said Amit Agrawal, a chartered accountant practising on indirect tax front.

The government needs to increase the abatement on land price to at least 50% of the sale price, so that the buyer gets benefits. At present, the builders will also get a transitional input credit for stock purchased before GST. Input credit is a rebate available on indirect tax paid on raw materials and services used during construction. If not passed on, it can lead to action under anti-profiteering laws, said Agrawal.





Saturday, 8 July 2017

RULE CHANGE TO EASE MHADA REDEVELOPMENTS

Builders now have to pay a premium linked to ready reckoner rate in return for extra FSI.

Chief Minister Devendra Fadnavis has cleared the way for the redevelopment of 56 MHADA colonies in the city by dropping the condition that builders who undertake such redevelopment projects would have to give MHADA housing stock.

Instead, builders will now have to pay a premium which will be linked to the ready reckoner rate in return for extra floor space index (FSI), a senior official in the CM’s office told Mirror.

In 2008, MHADA came out with a policy for the redevelopment of housing colonies, as part of which a builder would get an extra, or incentive, FSI, which was capped at 2.5. To get this, builders had to either pay MHADA a premium equivalent to 40 per cent of the ready reckoner price, or share 67 per cent of the apartments they built using the incentive FSI.

The FSI indicates how much one can build on particular plot of land. If FSI is 1 and the size of the plot is 1,000 sq m, the permissible construction is 1,000 sq m. Currently the island city has a basic FSI of 1.33, while the suburbs have an FSI of 1.

In 2010, the government made it mandatory for builders to share housing stock with MHADA, even though in 2013, it altered the formula to make it easier for builders. Still, most builders found the option unviable and, as a result, a number of redevelopment projects failed to take off.

There are 55 MHADA colonies spread across cities, mostly concentrated in Kalachowkie, Sion-Koliwada, Vikhroli, Ghatkopar, Goregaon and Dindoshi. These colonies accommodate a little over two lakh dwellings.

“Now the housing societies that occupy a plot of less than 2,000 sq m will have to pay only a premium, and the builder will get 2.5 FSI. The condition of giving housing stock has been dropped altogether,” a senior official in the chief minister’s office said.

In the case of housing societies that occupy plots between 2,000 and 4,000 sq m, an FSI of 3 has been given -- whether builders have to give premium or housing stock in return will be decided based on how much land remains after rehabilitating a housing society’s existing residents.

However, in the case of housing societies located on plots of more than 4,000 sq m, builders will be given an FSI of 4, and it will be mandatory for them to give MHADA housing stock.

Rajan Bandelkar, vice president of the National Real Estate Development Council, said: “The state government’s move is welcome, but it should have removed the condition of housing stock for all kinds of plots, not just plots under 2,000 sq m. Due to the housing stock condition, the redevelopment of MHADA colonies has been stuck for the last seven years.”

Now, to take advantage of the 2,000-sq-m rule, instead of redeveloping an entire layout or colony, individual societies will be redeveloped, and limitation will be imposed on offering amenities like parks, schools and swimming pools, Bandelkar said.

“The decision has been taken to benefit builders, clearly. However, if the premium charged from builders is only used to create a stock of affordable houses, it is welcome; but past experience shows that such premiums will be used in some extravagant scheme of the government,” Chandrashekhar Prabhu, town planner and housing rights activist, said.



Tuesday, 4 July 2017

Revenue department told to follow RR rate directives

According to the cabinet decision, the ready reckoner rates are decided as per the 1995 formulas

To control the soaring ready reckoner (RR) rate, the Maharashtra government has made it mandatory for the town planning branch of the revenue department to refer to the given directives while calculating the government rates each year.
According to the cabinet decision, the ready reckoner rates are decided as per the 1995 formulas. “That includes the land value, construction qualities, advantages and disadvantages, education facilities, transport and appreciations in property. But most of the times, these directives are not considered while fixing and increasing the government rates. Now, it will be mandatory to refer to these directives, and then hike the rates. This will give a true picture of that particular locality,” the cabinet notice stated.
The government had made an amendment to the Bombay Stamp (Determination of True Market Value of Property) Rules, 1995 and the revised rules were issued through a gazette notification.
“Due to a haphazard rise in property rates at most locations, the rates provided by private builders are usually higher. The stamp duty and registration is based on the government rates. In that case, the builder has no options but to increase the property rates. It makes it difficult for home buyers to buy a property. We want to control the prices therefore the given directives have to be followed while deciding the RR rates,” said an official from the state revenue department.
CHANGE IN DATES

Earlier, the Maharashtra government used to announce the rates on January 1 of every year, but since last year, the RR rates are announced in April.



Friday, 30 June 2017

Will GST make homes expensive

The members of CREDAI (RNE) Raj Nagar Extension, believe that property prices will go up once the new tax regime kicks in




Come July 1, under-construction projects will attract a goods and services tax (GST) rate of 12%. Amid all the hullabaloo over the unified tax regime in the country, speculation is rife on would it lead to a hike in property prices?

The members of CREDAI (RNE) Raj Nagar Extension, believe that property prices will go up once the new tax regime kicks in. They feel RERA and GST will push price trends with a 10-20% spike in property prices.

“Taxes are being rationalised which will lead to increased transparency. There will be more clarity post-GST in terms of taxes. Under GST, the under-construction projects are going to attract 12% tax, where previously it was about 4.5%. This will push the market and we can expect an increase in prices. Steel will also attract 18% GST, which will further put stress on prices,” says Manu Garg, Director, Carol Infrastructure Pvt Ltd, who was speaking at a press conference held by CREDAI, RNE chapter.

“Cement has seen both highs and lows in the past and it directly impacts the construction cost. Any increase in cement prices will directly influence the construction cost of a project. The government is also working on the correction of minimum wages. From here, the market will only move ahead so the best time to buy a house is now. Home loan rates are low and the market gives end-users and investors the right climate to buy,” adds Garg.

General Secretary of CREDAI RNE, Gaurav Gupta says that the best time to buy property is now as prices are attractive and home loan rates are cheapest at this point in time. “The market offers attractive prices for home buyers. Home loan rates are the cheapest and affordable homes are getting subsidies from the government,” explains Gupta.


The GST rate for steel has been finalised at 18% which is expected to be beneficial in the long run for other sectors as well. Cement prices are expected to go up marginally, as it has been put in the 28% tax slab from the earlier 23-24%.


Tuesday, 27 June 2017

Ensure builders don't charge home buyers higher tax after July 1 Venkaiah Naidu to states

The finance ministry last week had clarified that GST will actually reduce their tax outgo for payments made after July 1


NEW DELHI: Housing minister Venkaiah Naidu has asked chief ministers of all the states to ensure builders don't charge higher tax from home buyers after the goods and services tax (GST) comes into effect from July 1.

In a letter yesterday, the minister said builders asking home buyers who have booked flats and made part payment to make entire payment before July 1 or to face higher tax incidence is against the law.

"I would like to request state governments as well as builders' associations to ensure that no builder/construction company should ask customers to pay higher tax rate on installments to be received after the imposition of GST," Naidu said in his letter.

The finance ministry last week had clarified that GST will actually reduce their tax outgo for payments made after July 1.

"Construction of flats, complex, buildings will have a lower incidence of GST as compared to a plethora of central and state indirect taxes suffered by them under the existing regime," the finance ministry said.

The ministry had also warned that if any builder resorts to such practice, the same can be deemed to be profiteering under section 171 of GST law.

The letter written by Naidu to state CMs highlighted that in the current tax regimes, incidence of central excise duty, value added tax (VAT), entry tax, etc, on construction material are currently borne by the builders, which they pass on to the customers as part of the price charged from them.


"This is not visible to the customer as it forms a part of the cost of the flat. The buyer/customer does not see the embedded taxes on account of cascading and sticking of input taxes in the cost of the flats, etc," it said.

However, under GST, full input credit would be available for offsetting the headline rate of 12% and it is for this reason that refund of overflow of input tax credits to the builder has been disallowed.

Builders body Confederation of Real Estate Developers Association of India (CREDAI) has also urged the government to consider accommodating the abatement of land value in GST regime to ensure that home prices don’t rise.

CREDAI had also highlighted that the GST regime does not eliminate multiple taxation for the real estate sector, and availing input tax credit may not be feasible, thus limiting the capacity of developers to absorb the additional tax burden or pass on the benefits to homebuyers.




Friday, 23 June 2017

No ads of housing projects without registering with RERA Govt

The clarification is likely to further dampen the already subdued real estate market that has seen no real appreciation in value of property




Clearing the air on real estatedevelopers issuing advertisements, the government has said no ongoing or future projects can be advertised without registering them first with the new regulator.

The clarification is likely to further dampen the already subdued real estate market that has seen no real appreciation in value of property or sales growth during the last few years.

The Real Estate (Regulation and Development) Act was passed last year to regulate the sector, eliminate fly-by- night operators and protect buyers' interest. The Act came into force from May this year.

Realtors' body NAREDCO had submitted a representation to Ministry of Housing and Urban Poverty Alleviation seeking clarity on advertisement and sale of the ongoing projects amid conflicting reports and interpretation on the issue.

"Section 3 (1) of the Act prohibits advertisements for all projects (ongoing/future) without registration with the real estate regulator. This provision has come into effect from May 1, 2017," the ministry said, while responding to the NAREDCO's letter.

NAREDCO President Parveen Jain said the prohibition on advertisements and sale in the ongoing projects will hit the industry.

As per the Act, Section 3 (1) specifies that "no promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase in any manner any plot, apartment or building...,in any real estate project or part of it, in any planning area, without registering the real estate project with the Real Estate Regulatory Authority established under this Act."

For the ongoing projects, this section provides that the promoter should make an application to the authority for registration of the project within a period of three months from the date of commencement of this Act.

Ending the 9-year long wait, the real estate law, which will regulate the realty sectorinvolving over 76,000 companies, came into force from May 1, 2017.

With all the 92 Sections of the Act coming into effect, developers are required to get all the ongoing projects that have not received completion certificate and the new projects registered with regulatory authorities within three months, ending July.

This would enable the buyers to enforce their rights and seek redressal of grievances after such registration.



Tuesday, 20 June 2017

Tamil Nadu cuts property guideline value by 33%

The move could remove hurdles in property transactions in many rural areas, where guideline values were at times higher than market values.



CHENNAI: Hit by low realty transactions for successive years, the Tamil Nadugovernment has decided to effect a 33% reduction in guideline values (the government-fixed minimum value of properties) for registration of properties. The decision was taken in Thursday's cabinet meeting and the revised norms will come into effect on Friday.

The move could remove hurdles in property transactions in many rural areas, where guideline values were at times higher than market values. To compensate for the possible loss of revenue, the government has increased the registration fees for conveyance, exchange, gift and settlement effected in favour of non-family members deeds from 1% to 4%. It will come into effect on Friday .

The developer community has welcomed the reduction in the guideline values. City developer Arun Excello MD P Suresh said, “This will give the much needed fillip to the real estate sector. But owing to the 3% increase in registration fees, the effective reduction in cost of conveyance of property is only marginal. For instance, for a property whose guideline value is Rs3 lakh at present, the resultant reduction in cost of registration is only Rs 2,000. In the case of an apartment buyer registering an undivided share of land worth Rs3 lakh, there is no savings at all even after reducing the guideline value by 33%. Still, there is substantial savings for the seller on account of resultant drop in capital gain tax, which is calculated based on guideline value when the guideline value is higher than the market value“.

N Nandakumar of Devinarayan group said the reduction in guideline value would help the affordable housing segment and spur the real estate growth. “Higher guideline values have the tendency to push the market prices up for properties. The reduction in guideline value will definitely lead to softening of property prices“. “We expect the volume of transactions to go up,“ said T Chitty Babu, MD, Akshaya Homes. TN still has a long way to go in fulfilling the Centre's proposal to introduce uniform stamp duty and registration fees (4+1% respectively) across the country. Only very few states have introduced four per cent stamp duty and one percent registration fees, Babu said.

With goods and services tax round the corner, state governments are left with very few things to levy tax on. Most of the services as well as commodities have been subsumed by 
GST. Only alcohol, fuels, stamp duty and registration fees are available for states to levy tax on.

Tamil Nadu government is in the process of imposing phased prohibition and had closed down 1,000 Tasmac outlets on its own. Another 3,000 shops were closed after the Supreme Court ordered that liquor outlets and bars within 500 metres of national and state highways be shut down.

This leaves little scope for the government to increase its revenue from the liquor sector.

Increasing value added tax on fuels like petrol and diesel will hit all sections of society. This leaves registration revenue as the only other option to increase revenue.

Economists feel the timing of the cabinet is good as only on Wednesday, the Reserve Bank of India gave relief to people purchasing houses above Rs 75 lakh.



Friday, 16 June 2017

Hotel associations urge government to roll back 28% GST

The government on Friday said the Goods and Services Tax (GST) Council may go for a revision in the fitment of some goods and services in the tax slabs after reviewing industry representations

NEW DELHI: Hotel associations are actively engaging central and state government officials in their push for a rollback of the 28% tax on hotels where tariffs top Rs 5,000.

The government on Friday said the Goods and Services Tax (GST) Council may go for a revision in the fitment of some goods and services in the tax slabs after reviewing industry representations. The council is scheduled to meet on June 11.


According to industry executives, the tourism ministry has submitted a representation to the finance ministry in this regard after consultations with hoteliers.

The Federation of Associations in Indian Tourism & Hospitality, or FAITH, said it is hoping for a GST rate of 18% for the industry as post the 28% rate, hotels with a tariff of Rs 5,000 and above will be 7% higher than the current average rate, and restaurants in five-star hotels will be 9.5% higher.

“All chief ministers, finance ministers, tourism ministers, chief secretaries, revenue secretaries and tourism secretaries of all states have been sounded on the issue. A team is meeting tourism ministers and chief ministers to request their state finance ministers to vote favourably,” said a spokesperson for FAITH.

The GST Council has pegged GST rates for air-conditioned eateries and those with liquor licences at 18%, non-air-conditioned restaurants at 12%, hotels charging room rentals between Rs 1,000 and Rs 2,500 at 12%, Rs 2,500 and Rs 5,000 at 18%, and above Rs 5,000 at 28%. Hotels with tariffs below Rs 1,000 have been exempted from tax.

Garish Oberoi, vice-president, Federation of Hotel & Restaurant Associations of India (FHRAI), said, “At no point did we think of this 28% tax slab. We were thinking of a 12% tax slab. We had given figures to the government and that is what countries across the world are charging. Most states like Uttar Pradesh, Rajasthan, Himachal, Haryana, Punjab and Uttarakhand will have to pay much more. We had asked for one tax across the board.”

Oberoi said FHRAI members had been invited for a meeting by the GST sectoral group on Saturday.

According to a research by consulting firm HVS, the primary GST rate of 28% on hotels, if implemented, will make star-category hotels in India the most taxed in the world, surpassing hotels in New York, London and Paris, even without add-on levies such as municipal tax, service charge, etc. “If one were to put aside other costs (such as service charge, municipal tax, cess etc) on an ‘apples to apples’ comparison, not a single state (in India) was levying such a high tax on its guests as will now be the case with this new tax regime,” HVS said in its report.



Tuesday, 13 June 2017

SBI makes home loans above Rs 75 lakh cheaper

The RBI had recently lowered risk weightage on home loans from 75 bps to 50 bps and the provision for standard assets was reduced to 25 bps from 40 bps.



MUMBAI: Country’s largest bank, State Bank of India (SBI) has taken a lead and lowered interest rates on loans above Rs 75 lakh. This comes within days of Reserve Bank of India reducing capital requirement on big ticket home loans.

The bank has lowered home loans rates by 10 basis points for home loans above Rs 75 lakhs to 8.55% for women and 8.60% for others. SBI has said that the revised rates are effective from June 15.

The 
RBI in its monetary policy lowered risk weightage on home loans from 75 basis points to 50% bps and the provision for standard assets was reduced to 25 bps from 40 bps.

Speaking to media soon after monetary policy was announced, N S Vishwanathan deputy governor RBI, “We have observed that delinquency is lowest in the home loan segment. We have reduced the SLR by 50 basis points as a part of the transition to 100 percent liquidity coverage ratio by January 2019. In the interim it will provide some liquidity to banks. Possibly these two measures together should bring some buoyancy to the home loans segment.”

“Fifteen basis points reduction in standard asset provisioning will make the interest rate cheaper by 3-4 basis points,” said Gagan Banga, vice-chairman, Indiabulls Housing Finance Company told ET early this week..



Friday, 9 June 2017

Pune civic body sees 40% rise in online property tax collection

Sources said that an increase in tax collection will help the department to achieve its annual tax collection target of Rs 1,333.50 crore




PUNE: An increasing number of Puneiites are opting for property tax payment through online portals this years collection reveals.
In the last 45 days, the Pune Municipal Corporation collected Rs 286 crore of property tax, of which 40% (around Rs 114 crore) was received via online gateways. Last year the administration was able to collect 30% of the tax amount via online portals in same period.

Sources said that an increase in tax collection will help the department to achieve its annual tax collection target of Rs 1,333.50 crore. A source said PMC was expecting more rise in tax collection in the next two weeks on account of the various rebate schemes ending on May 31.

There is an additional concession of 2% if tax is paid through online portals and one-time payment of annual tax will give rebate of up to 10%.

The department said it has already issued tax bill to every tax payer in the city . It has emphasized tax payment through online portals.The process of online payment is explained on the PMC's website.

A property tax department official said, “Statistics show more residents are opting for online gateways to pay property tax to avoid long queues. Last year, about 35% tax was collected via online gateways. This year, it has already climbed up to 40%. We are expecting to take up the online tax collection beyond 50% in near future.“



   

Tuesday, 6 June 2017

Mumbai luxury homes see 1.1% on-year price growth in Q1, albeit a declining trend Report

The country’s financial capital ranked 24th among 41 global cities tracked through the index. However, the price growth for prime residential properties has been on a declining trend


MUMBAI: Luxury residential properties in Mumbai recorded 1.1% price growth making it the only Indian city holding on to positive territory during the quarter ended March, showed Knight Frank Prime Global Cities Index.

The country’s financial capital ranked 24th among 41 global cities tracked through the index. However, the price growth for prime residential properties has been on a declining trend.

Delhi and Bengaluru, the other two Indian cities on the global list, witnessed negative growth of -2.6% and -0.2%, respectively during this period.

Chinese cities including Shanghai top the index with staggering double digit growth. Cities of Guangzhou, Beijing and Shanghai topped the index with an average price growth of 26.3%.

The small base size and limited residential inventory may have catapult Guangzhou to the top of the table with a whopping price growth of 36.2%, the report added. Shanghai, often cited as a model city for Mumbai also recorded a healthy 19.8% surge on the price card.

According to Samantak Das, chief economist and national director, Knight Frank India, luxury home markets at major Indian metros were probably still recovering from the short-term shocks of the demonetisation last year.

“From nearly a year-on-year price growth of 3% until two years back the prime residential market in Delhi has seen negative growth of almost similar measure in the quarter-ending March 2017. Likewise from a staggering year-on-year growth of 13.6% in 2015, Bengaluru recorded negative growth for the first time in five years,” said Das.

Das added that Mumbai, is holding to a positive price growth albeit, in a declining trend. Globally financial hubs such as Zurich (-7.0%), London (-6.4%) and Milan (-0.9%) have recorded negative growth. “Mumbai did better than many global financial centres but the price growth in the quarter-ending March 2017 has taken it back to Q1 2013 levels after touching a high of 3.2% price growth in 2015,” added Das.

Emerging tech hubs such as Seoul (17.6%), Stockholm (10.7%), Berlin (8.7%) and Melbourne (8.6%) outshined established global financial centres the index shows but price growth in Bengaluru, India’s IT capital was not in sync with the global trend.

Property prices in the US also saw a steady surge but luxury home rates in Toronto spiraled (22.2%) almost three times of Vancouver (7.9%).

Select Asian cities such as Hong Kong (5.3%) and Singapore (4%) fared better following years of ordinary performances.

Although prime rate in London fell by a sharp 6.4%, the performance in in the quarter ending March 2017 indicates stabilisation.





Friday, 2 June 2017

Plot promoters to also face action under RERA

The act refers to a plot promoter as "a person, who develops land into a project, whether or not the person also constructs structures on any of the plots





CHENNAI: Union urban development minister M Venkaiah Naidu warned last week of penal action against realtors dishonouring their promises. But it’s not just builders who face punitive measures under the new Real Estate (Regulation and Development) Act. The ambitious legislation, which came into effect on May 1 across the country, also deals with plot promoters. The act is yet to be enacted in Tamil Nadu as the state government has not ratified the draft rules.

The act refers to a plot promoter as "a person, who develops land into a project, whether or not the person also constructs structures on any of the plots, for the purpose of selling to other persons all or some of the plots in a project, whether with or without structures thereon." This apart, real estate agents who facilitate sale or purchase of plots, marketed by promoters are also under the purview of the act. Like builders, plot promoters also must register their layouts with the real estate 
regulatory authority before launching their projects in the market.

Realtors said that including plot promoters would ensure that they do not deviate from assured amenities. About 45% of the total land for a proposed layout must be earmarked for facilities such as roads and Open Space Reservation (OSR) to obtain approval from planning authorities, while the rest can be developed as plots. Former president of Tamil Nadu chapter of Confederation of Real Estate Developers Associations of India (CREDAI) N Nandakumar said that many plot promoters offer attractive facilities to woo customers, but fail to deliver. "For instance, some promise black-topped road, though buyers end up with gravel pathways. A few even offer to plant saplings and nothing would be available in reality," he said. Nandakumar notes that a section of plot promoters seldom adheres to the development regulations with much of the space earmarked for common amenities being diverted for other commercial purposes. "Against this backdrop, 
RERA can play an effective role as the promoters should provide the amenities assured to buyers," he added.

The act clearly states that defaulting promoters shall be punishable with imprisonment for a term which may extend up to three years or with fine which may extend up to a further 10% of the estimated cost of the project or with both.

RERA will also open a window to access complete details about real estate projects. Leading developer Chitty Babu said that details on all projects registered with RERA will be available in an exclusive portal. to be created by the authority. "It (web portal) “It will be a great tool for understating a project ahead of buying a property," he said.



Tuesday, 30 May 2017

All you need to know about the RERA Act



The real estate sector is set to finally get its own regulator from May 1, 2017. The Real Estate (Regulation and Development) Act, 2016 (RERA) becomes effective in the entire country from May 1, 2017.

Each state and UT will have its own Regulatory Authority (RA) which will frame regulations and rules according to the Act.

Here is what the RERA has in store for home buyers...


Source credit: Economic Times



Real estate prices
April 30, 2017, 20:55 IST
The prices haven't come down to the extent it was expected. Huge unsold inventory, lack of new demand, demonetisation amongst others has not led the builders bringing
the rack rate down albeit few discounts and freebies to the customers.

Impact of RERA:
Rohit Gera, MD, Gera Developments and VP Credai - Pune Metro, says, "Before RERA, the risk of delays, quality, title, and changes were borne by the customer. These will now be borne by the developer and there will be a premium that the flat purchasers will have to pay for transferring this risk to the developer. There is no room for developers to absorb these costs and so they may be transferred on to the customers by way of price increase."


Delayed delivery
April 30, 2017, 20:55 IST
Untimely delivery of real estate projects has been the biggest bane for the buyers. Of late, almost all projects especially projects launched 2010-2013 have defaulted in delivery within the stipulated time primarily because funds were diverted to new projects by the builders instead of using them in completing the existing ones.

Impact of RERA:
Now, as per the RERA Act, the promoter has to maintain a 'separate account' for every project undertaken wherein 70 per cent of the money received from the buyers shall be deposited. Such funds can only be used for the purposes of construction and land cost.

Real estate developers will have to furnish additional information regarding the ongoing projects for the benefit of the buyers besides depositing 70% of the unused funds in a separate bank account to ensure their completion.


Ongoing projects
April 30, 2017, 20:55 IST
Developers will have to make public the original sanctioned plans and changes made later, total amount collected from allottees, money used, original timeline for completion and the time period within which the developer will complete the project, certified by an Engineer/Architect/practicing Chartered Accountant.


Role of Regulatory Authority
April 30, 2017, 20:55 IST
Each Regulatory Authority in the state will have the responsibility to register and regulate real estate projects and real estate agents registered under this Act.

It will also be required to maintain a website for public viewing, of all real estate projects for which registration has been given.


Quality of construction
April 30, 2017, 20:55 IST
The quality of the construction has also been a matter of concern with several builders. The RERA rules provides for protection against this up to 5 years after possession.

In case any structural defect or any other defect in workmanship, quality or provision of services or any other obligations of the promoter as per the agreement for sale is brought to the notice of the promoter within a period of five years, it shall be the duty of the promoter to rectify such defects without further charge, within 30 days.


What you get to see
April 30, 2017, 20:55 IST
No promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase in any manner any plot, apartment or building, as the case may be, in any real estate project or part of it, in any planning area, without registering the real estate project with the RERA established under this Act.

Each advertisement has to carry the RERA registration number.


Registration of projects
April 30, 2017, 20:55 IST
Make sure you buy a project which is registered with the RA. Once the state has its RA established, builders will be required to register their projects with it by furnishing all the information including, financial statements, copy of legal title deed and other documents.

The builders will get a registration number project-wise i.e. tower wise.


Delayed delivery - compensation
April 30, 2017, 20:55 IST
If the promoter fails to complete or is unable to give possession of the property within the agreed timed-period, he has to return the total amount with interest at such rate as mentioned in the agreement to sale.

And, in case the buyer does not intend to withdraw from the project, he shall be paid, by the promoter, interest for every month of delay, till the handing over of the possession.


Online information
April 30, 2017, 20:55 IST
After registration with RA, the builder will be given a login-id and password to create a page on RA's website to upload the project related information on authority's website.

It will show quarterly up-to-date the list of number and types of apartments or plots, as the case may be, booked; quarterly up-to-date status of the project; and amongst others.


Booking amount
April 30, 2017, 20:55 IST
Currently, most builders ask for 10 percent of the total cost of the property as a booking amount.

Now as per RERA, a promoter cannot accept more than 10 of the cost of the property, as an advance payment or an application fee, without first entering into a registered agreement for sale.