Real Estate

Withdraw OCS Or CCS Given To Incomplete Projects

Withdraw OCS Or CCS Given To Incomplete Projects

January 15, 2019 in Gurgaon Investment, Investment News, Real Estate News

As part of a landmark judgment, the Haryana Real Estate Regulatory Authority – Gurugram bench has asked the Town and Country Planning Department (DTCP), Haryana, to withdraw the Completion Certificate (CC), or Occupation Certificate (OC), issued to projects that are yet to complete the development.

The authority has also asked DTCP to initiate an inquiry as to how such certificates have been procured fraudulently.

The development is expected to have ramifications across other states and regions too as several developers had rushed to secure these completion and occupation certificates ahead of the commencement of RERA in a bid to escape its jurisdiction.

It has observed many such cases where part CC, or OC, has already been issued even though the development work is not yet complete, which should be the criteria for granting these approvals.

“A fraud has been committed to secure these OCs and CCs even though the projects are yet to be completed. We have issued show-cause notices to such builders and are reaching out to vigilance for an enquiry into the matter,” KK Khandelwal, chairman, Haryana Real Estate Regulatory Authority, told ET.

The regulator has also asked DTCP to take disciplinary action against officers whose connivance builders have secured such clearances.

The authority has provided a month’s time to promoters of such projects to apply for registration, failing which penal proceedings will be initiated against them.

According to experts, the authority has taken cognizance of the trouble faced by homebuyers of such incomplete projects and builders procuring OC/CC even without completing the projects.

“This order would have wider implications benefitting homebuyers, especially since many states have diluted their real estate rules that favour builders. Such developers will be forced to comply with the registration requirement or face penalty up to 10% of the project cost as provided under the RERA,” said Abhay Upadhyay, president of pan-India homebuyers’ body Forum for People’s Collective Efforts (FPCE).

According to RERA, the development scope of the project includes external work such as roads, landscaping, water supply, sewerage and drainage, electricity supply transformer, sub-station, solid-waste management and any other work as may be provided in local laws.

Internal development work means roads, footpaths, water supply, parks, tree planting, street lighting, provision for community buildings, water conservation, energy management, fire protection and safety requirements, social infrastructure such as educational, health and other public amenities as per sanctioned plans.

Upadhyay reckons that in many cases homebuyers face problems because they are being forced to take possession without the promised infrastructure in place. The CC, or OC, can only be granted after the completion of such development work as observed by the authority.

The authority has also ruled that mere applying for Completion Certificate, or Occupation Certificate, will not exempt any real estate project from falling under the ambit of the Real Estate (Regulation & Development) Act, 2016 (RERA).

It has made it clear that the OC, or CC, granted prior to the commencement of the act will be the only condition to get an exemption from RERA registration of the project.

“…mere filing of the application cannot be treated as completion of the project/occupation of the project,” the order said.

However, it has further stated that homebuyers of these exempted projects can still approach the authority for any structural defect in the project within five years of filing the complaint. The authority has also ruled that all real estate projects will be covered for land title defect liability.

Sources: realty.economictimes.indiatimes.com

Which is a Better Investment: Real Estate Or Stocks?

Which is a Better Investment: Real Estate Or Stocks?

November 21, 2018 in Defination, Investment

There’s always a long-standing debate among investors on whether property makes a better investment proposition to shares. There’s no denying that the stock market historically outperforms other types of investments. And if you have to choose between investing in real estate and stocks, it might seem like a no-brainer.

Some people think the stock market is the better alternative because the real estate market is unstable at its best. There’s no guarantee that property values will appreciate from year to year and when home price gains slow or decline, investors take a serious hit. The stock market isn’t much better, it’s known for its volatility and there are unpredictable ups and downs.

Without a doubt, stock market investing offers an unparalleled ease. You can invest in stocks with as less as Rs 500. It can be done in the comfort of your home. The case with real estate is different. You have to go and survey the property, inquire about the locality and go through a lengthy process, including government regulations, to invest in it.

Each investment options provide a range of benefits. Real estate and equities, both are a great source of investment and help build wealth in the long term. Success in investing in these assets depends on the knowledge of the asset, inclination and attitude of individual investors and understanding the key drivers of the prices of these assets. Regardless of your asset class, returns are determined by different factors that generate different benefits. It’s important that you investigate and consider investing in both real estate and the stock market for different reasons.

Let’s look at these benefits in more detail and what to consider before you invest:

REAL ESTATE

  • A real estate is a tangible asset. It can be a land or a property that you can see, feel and utilize. It can provide a better quality of life. Moreover, before your purchase, you can inspect the property if it is in good condition to make sure that what you are getting is worth your hard-earned money.
  • Complete control over your investment in real estate is possible. The decision to rent it out to generate passive income, to make repairs or improvements and to sell it in the future is in your hands.
  • The value of real estate properties appreciates over time. It is one of the rare assets that rise with inflation. Even during tough times, it is less volatile. When the economy is down, you can still relax in your home.
  • A property is a source of satisfaction. You can take pride in its ownership. Since it is tangible, you have a constant reminder that years of hard work definitely pay off.

 

STOCK MARKET

  • Stocks are low maintenance. Investment in it can be left alone after the initial purchase and it will still pay out dividends. Because it requires less work, you can focus your attention elsewhere with confidence that your investment is still moving.
  • Investing in stocks is doable even for young investors. It is even preferable to start young to maximize its potential growth. Shares can be inexpensive and you can determine its volume.
  • When you buy shares of stock, you buy a piece of a company. The returns you earn is invested in prominent and are persistently successful, companies can certainly be of considerably high value. And historically, stocks have a high rate of return.
  • With stocks, you can invest not only in your own country but even in different countries and in various sectors.

Why Real Estate is still the best investment class?

When one wishes to invest his or her money in a place wherein a long-term viability and return on assets are at a higher rate, real estate investing is the best choice for you. Real estate investing provides for a more controllable amount of risks that other financial assets cannot match. It’s tangible nature also gives the investor a more peace of mind as real estate pricing seem to be more constant as compared to stock market investments.

However, there are also risks involved in this type of market. These risks could be more tricky to analyze in relation to the constant movement of the market, it can be easily affected by the performance of a particular neighbourhood that could endanger your credits where the property is situated, the need for a larger capital to actually invest in the real estate industry, the nature of the property which is less liquid than other financial assets and lastly, the taxes that come along with it. Stocks and real estate are both smart investments, but the right one for you will depend on your own personal preferences. If you’re looking for quick high returns, stocks may be the better option for you.

The biggest advantage of investing in Real Estate gives you is you can buy below market, add value and rent for positive cash flow. If you buy properties right you can make more than your initial investment back before you even rent the home. Your cash flow can provide you lifetime income with no retirement calculators and you have control over your investment to increase its value.

Regardless of which one you choose, it’s crucial to ensure that you research the investment opportunity carefully. Real estate can offer great returns, but you need to choose the right property. The wrong property can lead you owing more than the property is actually worth. The same can be said for stocks. Invest in the wrong company, and you may see your investment go down the drain.

Sources: blog.zricks.com

Dos And Don’ts For NRIs Investing In Indian Realty

Dos And Don’ts For NRIs Investing In Indian Realty

October 24, 2018 in Investment News, NRI News

Besides exercising necessary due diligence, NRIs also need to adhere to certain specific laws and regulations, while buying, selling, or renting out real estate in India

The realty market in India has always seen considerable interest from the Indian diaspora, as an investment avenue. With developers constantly striving to woo non-resident Indians (NRIs), they can choose from a variety of options, in the residential and commercial segments.

“The realty market is in the midst of a slowdown and this is the right time to invest,” says Kalpesh Patel, head – international sales, Rustomjee Group. “Developers are offering good deals and benefits such as flexible payment plans, subvention schemes, etc. Although demand still exists at the local level, buyers are playing a wait-and-watch game. NRIs must take optimum advantage of this situation,” suggests Patel.

Buying and Selling

An NRI can either come to the country and buy or sell a property or give a Power of Attorney (POA) to a relative and get the transaction done, without coming to India. NRIs can also avail of home loans in India. The documents for the loan may vary, according to the country in which the NRI is settled. Generally, the term of the loan will be 10 to 15 years, while the amount that the NRI is eligible for, will vary based on age, income, education, etc. To finance the property’s purchase, it is advisable to use a non-resident external (NRE) account, as this will help the NRI to take back the capital invested in the property when they resell the property.

Investing for the Future

“For NRIs who are on the verge of retiring and planning to settle in India, this is the right time to invest,” advises Ashwinder Raj Singh, CEO – residential services, JLL India. “Social infrastructure in most of the large Indian cities has improved a lot while civic infrastructure is also being ramped up. As more hospitals, schools and shopping malls come up and connectivity improves, it will give rise to better standards of living. This will directly enrich the quality of life after retirement,” Singh adds.

Once the primary residence is secured, NRIs can also use surplus funds, to invest in a second apartment and use it to generate rental income. However, they must be aware of all the bye-laws and regulations that apply to NRI investors, especially with respect to taxes, as rental income is taxable in India. It is also taxable in other nations, except in cases where a treaty exists between the two involved countries, with regards to double taxation, he points out.

“NRI investors should avoid projects by unknown developers. Numerous buyers have fallen into difficulty, by putting their funds in projects that lacked mandatory clearances and fell short of even the minimum standards of quality. Unless an NRI plans to visit India and evaluate projects, s/he should opt only for reputed developers. In all cases, NRIs should strictly verify points, such as the track record and brand visibility of the developer, the social and civic infrastructure available in the location, the amenities in the project and the timelines for possession, in the case of under-construction projects,” cautions Singh.

A project that is targeted towards NRIs, is no different from other offerings in the market. A property should be evaluated, purely on the basis of its location and amenities on offer, the legal validity of its title and the developer’s brand image.

Sources: housing.com

Registration with HRERA is Must For Real Estate Projects

Registration with HRERA is Must For Real Estate Projects

October 22, 2018 in Gurgaon Investment, RERA Update

In a landmark decision, the Haryana Real Estate Regulatory Authority (HRERA) said that all real estate projects will have to mandatorily register with it. The authority asserted that all ongoing real estate projects and those which have been completed come under its purview as per the RERA Act. It said that the only exception would be those which got obtained completion certificate prior to the enactment of the Act. The order means that over 800 residential and commercial projects in Gurugram, which had sought the exemption for technical reasons, will now come under the ambit of the authority. Currently, 250 real estate projects are registered with HRERA, Gurugram. The judgment was delivered after a real estate company raised objections to the applicability of the rules and jurisdiction of HRERAon its project after a buyer filed a complaint against the delay in delivery of the shop she had booked. The authority also made it clear that merely filing an application for part completion, or occupation certificate by a department of town and country planning does not make a real estate projects exempt. “In several cases the applications are incomplete and the certificates have been obtained or are under process. This will not be allowed and neither condoned. All projects, which have not obtained completion certificate must get registered,” said Dr KK Khandelwal, chairman, HRERA, Gurugram. Simmi Sikka, a buyer in Emmar’s commercial real estate project Emerald Plaza in Sector 65, had complained to the authority seeking compensation for the delay in the delivery of a shop. “The question was raised whether a project which is not ongoing and has received deemed occupation certificate should come under HRERA or not. We have settled the issue once for all and made it clear that projects, including the Emmar Plaza, came under our purview,” said Khandelwal. The order also made it clear that the developers were under the wrong impression that only ongoing projects came under the purview of the act. “Somehow the developers also managed to get exemptions under HRERA rule and using these to their advantage tried to get an exemption from the Act. This cannot be allowed and everyone is accountable,” the order said. The authority also said that this order will also mean that any loophole in the Haryana rules, which led to the alleged dilution of the Central Act, will be plugged.

“This judgment has not only settled confusion regarding the applicability of act and registration of projects but also nullified the effect of dilution of rules. It will enable the authority to exercise power and functions in the true spirit of the RERA Act which otherwise had been marginalized on account of Haryana rules. This decision also settled the controversy regarding ongoing projects, which will now be treated as simply real estate projects,” said Khandelwal.

The authority also maintained that as far as ongoing projects were concerned, the authority would look into timely delivery, layout, planning, design and sanctions, and to ensure that there is no diversion of funds. For completed projects, which have been delivered in the last five years, the obligation of the promoter would entail workmanship and structural defect liability. All real estate projects are covered for land title defect liability. it said. Sanjay Sharma, a Gurugram based real estate consultant, welcomed the ruling.

“This is the step in the right direction. It will bring all the ongoing projects under the purview of HRERA,” he said.

Sharma also called for proper legislative backing to the authority so that it could act independently.

“It is most likely that this decision could be challenged in a higher court. The government should give legislative backing to this order to ensure HRERA Act is not diluted and its judgments are implemented,” said.

Sanjay Sharma, a Gurugram based real estate consultant, welcomed the ruling.

“This is the step in the right direction. It will bring all the ongoing projects under the purview of HRERA. It is most likely that this decision could be challenged in a higher court. Therefore, the government should give legislative backing to this order to ensure HRERA Act is not diluted and its judgments are implemented,” Sharma said.

Sources: hindustantimes.com

What Are Ready Reckoner Rates? Real Estate Basics:

What Are Ready Reckoner Rates? Real Estate Basics:

October 17, 2018 in Defination, Real Estate News

To avoid evasion of stamp duty through the undervaluation for agreements and to minimize the disputes on the quantum of stamp duty, all state governments publish area-wise rates of properties, on a yearly basis, known as Ready Reckoner rates.

What Is The Significance Of Ready Reckoner/Circle Rates?

The Ready Reckoner (RR) rate, as it is referred to in Mumbai, is also known as the Circle Rate in Delhi. This rate is the government’s estimate of minimum property values in various locations. The rate differs in every state, city and in different localities in those cities. Authorities determine the price of real estate in a particular locality, based on several factors. Based on these factors, a benchmark is set, below which no property transaction can take place in that particular locality. This benchmark is known as the Ready Reckoner/Circle rate. It is the minimum price on which the government will charge stamp duty and registration fees.

The RR rates are typically lower than the current market rates of properties in a particular area. The rate is reviewed periodically and revised, to bring it closer to market rates. As real estate transactions take place in the private realm and the price is often not disclosed, state governments need a benchmark, to ensure that they do not lose out on an important source of revenue.

How Does The Ready Reckoner Rate Affect Real Estate Transactions?

While RR rates specify the minimum amount at which properties can be sold in an area, there is no maximum limit above which a property cannot be sold. This leads to a significant difference between the RR and market rates. Most property transactions in India take place on the basis of the market rate in a particular locality. The stamp duty and registration fees, to be paid by the home buyer, are calculated on the basis of this market rate. Therefore, a big difference between the RR rate and market rate leads to a loss of revenue for the government. In rare cases where the RR rate is higher, the stamp duty and registration fees will be calculated on the RR rate. On the other hand, higher RR rates discourage home buyers from registering their properties. By periodically revising RR rates and bringing them closer to market rates in every locality, the state government can increase transparency in real estate transactions and also ensure that they do not lose out on revenue.

The Importance Of Ready Reckoner Rates For Home Buyers

The RR rate of properties in a particular area is a good indication of the amount of money a potential home buyer will have to shell out. Market rates of properties are almost always higher and property prices in an area tend to increase when the RR rate is expected to be increased. It is also beneficial for buyers to purchase property in an area, where the gap between the RR and market rates is relatively smaller, especially if the purchase is being financed by a home loan.

Sources: housing.com

Agreement for Sale versus Sale Deed: Real Estate Basic

Agreement for Sale versus Sale Deed: Real Estate Basic

October 5, 2018 in Defination, Real Estate News

While buying a property, people enter into an agreement with the seller. The form and format of the agreement may be different. It may either be an agreement for sale or it may be a sale deed. People generally do not understand the difference between these two documents and treat both as synonymous. However, it is not so.

WHAT IS AN AGREEMENT FOR SALE?

An agreement for sale is an agreement to sell a property in the future. This agreement specifies the terms and conditions, under which the property in question will be transferred. The Transfer of Property Act, 1882, which regulates the matters dealing with the sale and transfer of house property, defines the contract for sale or an agreement for sale as under:

“A contract for the sale of immovable property is a contract that a sale of such property shall take place on the terms settled between the parties” – Section 54. Section 54 further provides that “It does not, of itself, create any interest in or charge on such property.”

From the above definition, it becomes amply clear that an agreement for sale contains a promise to transfer a property in question in future, on the satisfaction of certain terms and conditions. So, this agreement itself does not create any rights or interest in the property, for the proposed buyer.

What the agreement for sale creates, is a right for the purchaser to purchase the property in question on the satisfaction of certain conditions. Likewise, the seller also gets the right to receive the consideration from the buyer on complying with his part of the terms and conditions.

In case of failure of the seller to sell or hand over possession of the property to the buyer, the buyer gets a right of specific performance, under the provisions of the Specific Relief Act, 1963. A similar right is available to the seller under the agreement, for seeking specific performance from the buyer.

SUPREME COURT RULING ON SALE DEED AND AGREEMENT FOR SALE

This agreement for sale may or may not result in an actual sale of the property in question. Some of the stamp duty laws, like the Maharashtra Stamp Act, deem an agreement for the sale of an immovable property, on the same footing as a proper deed of conveyance and therefore, are subject to the same stamp duty as is applicable on the proper deed of conveyance or sale deed of an immovable property. Due to such deeming provisions, requiring payment of stamp duty on an agreement for sale, people mistakenly perceive an agreement for sale, as a proper sale deed.

The Supreme Court of India in 2012, in the case of Suraj Lamp & Industries (P) Ltd (2) v State of Haryana, while dealing with the validity of sales of immovable properties made through power of attorney, has held as under:

“Immovable property can be transferred/conveyed only by a deed of conveyance (sale deed), duly stamped and registered as required by law. We, therefore, reiterate that immovable property can be legally and lawfully transferred/conveyed only by a registered deed of conveyance.”

“Any contract of sale (agreement to sell), which is not a registered deed of conveyance (deed of sale), would fall short of the requirements of Sections 54 and 55 of the Transfer of Property Act and will not confer any title, nor transfer any interest in an immovable property (except to the limited right granted under Section 53A of the Transfer of Property Act).”

According to the Transfer of Property Act, an agreement for sale, whether with possession or without possession, is not a conveyance. Section 54 of the Transfer of Property Act enacts that the sale of an immovable property can be made, only by a registered instrument and an agreement for sale does not create any interest or charge on its subject matter.

CONSEQUENCE OF FAILURE TO EXECUTE A SALE DEED

As per the Indian Registration Act, 1908, any agreement for the transfer of any interest in an immovable property of a value more than one rupee, is required to be registered. So, if you have purchased any property under an agreement for sale, without it being followed by a proper sale deed, you do not get any right or interest in the property purported to be transferred under the agreement of sale.

This absolute rule is subject to the exception provided under Section 53A of the Transfer of Property Act. Section 53A provides that where the buyer has obtained possession of the property that is the subject matter of the transfer, while fully complying with his part of the obligation under the agreement, the seller shall not be entitled to disturb the possession so granted to the buyer. It may be noted that Section 53A provides a shield to the proposed transferee against the transferor and debars the transferor from disturbing the possession of the transferee, but it does not cure the title of the buyer to the property. The ownership of the property still remains with the seller.

So, in the cases where you have purchased any property under an agreement for sale and got possession, the title of the property still remains with the developer, unless a sale deed subsequently has been executed and registered under the Indian Registration Act. Thus, it becomes clear that a title in an immovable property can only be transferred by a sale deed. In the absence of a duly stamped and registered sale deed, no right, title or interest in an immovable property, accrue to the buyer of the property.

Sources: housing.com

Why A Brand Name Is Important While Investing In Real Estate

Why A Brand Name Is Important While Investing In Real Estate

October 3, 2018 in Investment

Buying a property is considered one of the biggest financial decisions in every household. A lot of factors influence this decision and one of the key aspects is the brand name. A good brand name is an important factor that you must pay special attention to as it’s not only a matter of dignity and pride but also serves as a measure of the value of the property. Following are some of the reasons why you should opt for a builder who has an impressive repertoire and a strong brand image.

Credibility and Expertise

While you’re looking to invest in real estate, it’s important to opt for a trusted builder to avoid any sort of foul play. Their dealings are very transparent leaving no chance of financial fraud. On the other hand, chances of the property being built on an undisputed land are high with a lesser renowned builder.
There’s also the level of expertise that reputed builders come with. They have a great deal of experience and knowledge about the industry. A branded builder will offer apartments with impeccable facilities and superior aesthetics without compromising on the quality of construction.

Delivery on Time

When you’re purchasing a property from a reputed builder, you’re most likely to acquire the apartment on time. They make it a point to not disappoint their customers and ensure a timely delivery of apartments no matter what. Moreover, projects developed by reputed builders are all RERA certified. On-time handover is one of the main highlights of the RERA bill, making it even more certain that you will receive the keys to your new home on the promised date.

Greater Return on Investment

If you’re planning to sell or rent out your apartment, the brand name of the property is going to work in your favour. You are certainly going to enjoy huge revenue from it because the value of the property automatically increases when it comes from a branded builder. Additionally, reputed builders always develop properties in either upcoming localities or well-established areas, with emphasis on good social infrastructure and connectivity. With all these boxes checked, you are guaranteed to enjoy higher ROI.

Ease of Home Loan Sanctioning

A reputed real estate brand comes with the added benefit of easy loan sanctioning. If you’ve invested in a property that has been developed by one of the leading and most popular builders in the market, then the chances are high that your home loan gets sanctioned without much hassle.

Most reputed builders have tie-ups with the prominent banks like ICICI, HDFC, and SBI which drastically reduce any risk of fraud or malpractice. These banks trust the reputed builders and that makes your loan sanctioning process a piece of cake! Avoid making the common mistake of investing in a real estate property developed by a less renowned builder as you might get your hard earned looted.
Invest in a property that has established a bond of trust with its prior customers and has earned a good reputation in the market. One such builder is the House of Hiranandani that has been changing the landscape of real estate in India. Our developments stand as proof of superior aesthetics and top-notch quality construction with all the global amenities.

Sources: www.zricks.com

How To Invest in Real Estate in India

How To Invest in Real Estate in India

October 1, 2018 in Investment, Real Estate News

We Indians are big-time Real Estate Investors. We look for almost every opportunity, property and schemes to invest our small finances. With our rich history providing enough proof that even kings and kingdoms fought against each other over land and property, real estate seems to be one of the best investment options ever. However, you need to know about every nick and niche related to real estate investment in India before you dive into it to earn profits.

So, here are tips and simplified steps to help you invest in the Indian Real Estate Market.

1. Patience is the Key: When you indulge yourself into real estate investment, you need to hold on to your patience more than ever. Stay calm, see the property leisurely and take steps slowly. Never rush into investing your finances without a proper research.

2. Research: Plan and research thoroughly before you invest. Always remember, Real Estate values and profits depend a lot on the city, location, environment and the condition of the infrastructure. Better the location and infrastructure, better will be your profits. A good location includes your direct access to some of the most important amenities of our daily life. For instance, commutation, shops, gardens, market, etc. are all small factors that need to be considered while researching for a property investment in India.

3. Background and Paper Check: One of the most important steps you need to consider when planning to invest in the real estate market is to follow a thorough background check of the property, property owners and its papers. Take help of your legal experts to pull off information about the property and assess the documents for any forgery or issues to avoid controversies and scams. Make sure the property is clean without any legal issues.

4. Check and Compare Rates: Once the previous pointers have been considered and checked, it is time to study and compare the rates of the property. Get the help of evaluators to check the value of the property and the infrastructure to ensure you get a good deal. Cross check the value with other sources to get the best rates. You may also take help from the Local Government for guidance to know about the real value of the property.

5. Calculate your Savings: Evaluate your savings before you plan to go ahead with the investment. Calculating your savings will only help you plan for your loans, the bank interests and hence the risk of your investment. Make sure your pocket allows you to make the investment without any risks to your regular life.

6. Consider all related Risks: Every investment has certain risk factors. Same is the case in the real estate investment market. In India, legal issues and internal land disputes are highly common. Also, it is wise to take help of the city council to check with the city expansion strategies to make sure the property and its location do not intervene with the city’s future plans. Consider going through these matters before you make a final decision while investing in the Indian Real Estate.

Sources: zricks.com

Supreme Court Construction ban may take toll on Development

Supreme Court Construction ban may take toll on Development

September 28, 2018 in Investment News

The development could grind to a halt in Maharashtra, Madhya Pradesh, Uttarakhand, Chandigarh and elsewhere following a Supreme Court ban on construction in parts of the country, delaying deliveries and hurting property companies and allied industries besides putting people out of work. The real estate industry said it’s being punished for state inaction over solid waste management. “It will choke supply, and impact home seekers. Effectively, home buyers will suffer just because some state governments have not formally notified the policy,” said Niranjan Hiranandani, national president of lobby group National Real Estate Development Council (Naredco).  “The intention behind the order is good from a long-term perspective, but a blanket ban stopping all construction will have a negative impact on housing.”  The SC has banned construction in several states and union territories because they haven’t put in place rules on solid waste management. 

The biggest impact is seen on Maharashtra, home to the high-value property markets of Mumbai and Pune, although the state has prepared a policy on the matter and may, therefore, be able to get relief on this score, developers said.
“The overall annual real estate industry size in India is close to Rs 10 lakh crore, of which close to Rs 1.5 lakh crore to Rs 2 lakh crore is contributed by Maharashtra,” said Pankaj Kapoor, MD, Liases Foras Real Estate Rating & Research. “Over 1,000 allied industries across major sectors such as banking, cement, steel, sanitary, tiles and electrical equipment will be impacted severely if the states do not manage to get this stay vacated soon.”The decision will also have a bearing on the recovering economy and the job market, he said.
Investors seemed to be optimistic, however, as real estate companies mostly shrugged off the news on Monday. Godrej Properties ended up 1.7% at Rs 698.10, HDIL gained 5.5% to Rs 34.55, and Oberoi Realty ended up 3% at Rs 454.95. Indiabulls Real Estate’s shares ended down 3.1% at Rs 149.25.
“The policy for solid waste management is already in place in Maharashtra, even though the same had not been submitted to the concerned authorities,” said Kotak Institutional Equities in a report. If a stay is given in the coming weeks, the impact of the ban won’t be material, analysts said.
“They (Maharashtra) are going to apply for a stay of this order as they are saying they already have a solid waste management policy in place,” said an analyst at a Mumbai-based brokerage. “If Supreme Court gives a stay, there will be no impact. If they don’t get a stay, then they will have to wait for the October 9 hearing.”
Hiranandani said it would have been better if the court had penalised the states and barred new construction while allowing ongoing projects to be completed.According to the court, the states and union territories had not framed any policy under the 2016 Solid Waste Management Rules put into effect by the environment ministry in April 2016.
Experts are hopeful that the matter will be resolved soon, with the concerned state administrations doing what is necessary and the court allowing construction to resume.
Sources: economictimes.indiatimes.com
Important Rules For NRIs Investing In Indian Real Estate

Important Rules For NRIs Investing In Indian Real Estate

September 26, 2018 in Investment, NRI News

Non-resident Indians (NRIs) have been a significant segment of investors, in the Indian real estate market. NRIs generally buy properties in India for investment purposes or out of their emotional connection with their country and for settling back, once they retire.

According to Amit Wadhwani, director of Sai Estate Consultants, India has emerged as a lucrative spot for international capital. “Overseas investments have surged 137 per cent, from USD 3.2 billion during 2011-13 to USD 7.6 billion during 2014-16. According to a survey, almost 30 per cent of the total global real estate transactions in India, will be cross-border,” he adds.

Important FEMA rules that NRIs must keep in mind: In order to attract more foreign investment, the Reserve Bank of India has made the rules simple for NRI investments. Real Estate transactions fall under the purview of the Foreign Exchange Management Act (FEMA). “An NRI or person of Indian origin (PIO), as defined in FEMA, can acquire by way of purchase, any immovable property in India, other than agricultural land/plantation property/farmhouse. This is under a general permit that has been given by the government of India. However, no person being a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal or Bhutan, shall acquire or transfer immovable property in India, other than lease, not exceeding five years, without prior permission of the Reserve Bank,” explains Amarjit Bakshi, managing director, Central Park. Types Of Properties Where NRIs Can Invest:  An NRI is allowed to invest in both residential and commercial properties in India. However, any agricultural land, farmhouse and plantation property can be owned, only if it is inherited or gifted to the NRI. Financial Transactions By NRIs: When it comes to property transactions in India, NRIs/ PIO can make payments out of:

  • Funds remitted to India through normal banking channel.
  • Funds held in NRE/ FCNR (B) / NRO account maintained in India.
  • No payment can be made either by traveller’s cheque or by foreign currency notes.
  • No payment can be made outside India.

Loan Eligibility For NRIs:  Bakshi elaborates that “Like normal Indian citizens, NRIs/PIOs too can avail of home loans in Indian rupees for their property purchases, up to 80 per cent of the property value, depending upon individual eligibility. Such a loan can be repaid:

  • By way of inward remittance through normal banking channels.
  • By debit to his NRE / FCNR (B) / NRO account.
  • Out of rental income from such property.
  • By the borrower’s close relatives, as defined in Section 6 of the Companies Act, 1956, through their account in India, by crediting the borrower’s loan account.”

How NRIs Are Taxed, For-Profit Earned From Real Estate Investments NRIs can earn returns from their investments in real estate, in the form of rental income and short or long-term gain. Rental Income The rental income earned from a property asset in India falls under the income accrued in India and is taxable, irrespective of residential status. Short-Term Capital Gains Short-term capital gains apply to the profit earned through the sale of a property, within two years of its purchase. The capital gains for such property are calculated as the difference between the sale proceeds and the cost of acquisition. It is taxed as per the applicable slab rate for the NRI. Long-Term Capital Gains Long-term capital gains (applicable when the property is held for more than two years) are taxed at 20 per cent. However, unlike short-term capital gains, the exemption can be claimed under sections 54, 54 F and 54 EC. If an NRI opts for an under-construction property, they may have to give a power of attorney to a trusted associate, for completing the deal. Hiring a lawyer to prepare the document, is also crucial, to ensure that there is no forgery and the investment is secure. Sources: housing.com

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