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Driving Factors in Kolkata’s Residential Real Estate

Jul 30,2019 / By / No Comment

Driving Factors in Kolkata’s Residential Real Estate

Kolkata, the state capital of West Bengal is one of the fourth most populous cities of India. Popularly referred to as the town of joy, the land is wealthy in its culture and tradition. When it comes to its real estate scenario, the city is witnessing rapid growth in all the segments ranging from high end to affordable properties.
City’s property market witnessed a couple of major enhancements in seeing that all the important estate market players have up their game, and are actively participating in this multi-core market.

The real estate sector in Kolkata, according to statistics, has shown a growth of 11% on a yearly basis.
There has additionally been the expansion of diverse townships. The Garia Baishnabghata Patuli township, the Behala township, the Alipore township and the currently emerging township in Rajarhat, New Town, Joka, Garia, Sonarpur, Barasat are a few examples.

This rising administrative district additionally provides cheap rent and fairly priced property compared to property costs in different metropolitans. The demand for property has seen a tremendous spike ever since the construction of the Metro Railways. There is already a metro corridor that connects Dum Dum to Tollygunge and was later extended to connect Noapara to Garia. The metro corridor currently under construction, also known as the East-West corridor will connect Salt Lake to Howrah, making connectivity a dream come true for commuters.

Kolkata is basically an End-user market and shown rapid growth in affordable housing in recent few Quarters. People living in B towns and working in Kolkata are preferring to buy property in the outskirts of Kolkata. The main reason for this is the affordable prices of properties in the outskirts.

Mukesh Agarwal pic

Insights by:
Mukesh Agarwal
Director, Maa Durga Properties

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Nagpur Municipal Corporation has planned to construct low-cost homes under PMAY on Orange City Project

Jul 9,2019 / By / No Comment
Nagpur Municipal Corp

Nagpur Municipal Corporation has planned to construct low-cost homes under PMAY on Orange City Project

As the construction of Metro Mall at the Orange City Street has begun, the Nagpur civic body has decided to start the construction of a hospital near Khamla and residential homes between Jaitala T-point and Yashoda Nagar as a part of the Pradhan Mantri Awas Yojna (PMAY) under Orange City Project.

City MP and Union Minister Nitin Gadkari in a meeting held last week directed the Nagpur Municipal Corporation to keep housing schemes under the central govt’s Pradhan Mantri Awas Yojana to encourage home buying affordable for the Middle Income Group (MIG) and Economically Weaker Section (EWS).

The proposed hospital buildings will come up in two buildings, of which one building would be a multi-speciality hospital and another one include OPD, radiology, pathology centres, and medicines.

The Nagpur Municipal Corporation following MahaMetro has started construction works for Metro Mall adjacent to Jaiprakash Nagar Metro Station at Radisson Blu Square. The basement work has completed and concrete work will start soon.

Orange City Street is also known as London Street project is being developed by the Nagpur Municipal Corporation in Maharashtra. The project includes 10 different expenses allocated for residential, commercial, IT Park, green zone, vegetable market, and medical zone. The remaining zones in the project are cultural, retail market, recreational, parks, parking etc.

It is being developed on 5.50 km on both sides of Wardha road- Somalwada-Khamla-Bhamti-Parsodi-Takli-Jaitala T-Point road stretch. The project will span across 75.34 acres of land. The total built-up area under the project is 10,75,984.40 sq mt. It will spread over a total of 21 plots and comprise 60 residential and 13 commercial buildings at the cost of 5,700 crores which was planned in the year 2007. This project received a negative response on Build-Operate-Transfer (BoT) model. Now, the Nagpur Municipal Corporation has come forward and taken the execution work in a phased manner. The civic body will sell the properties and recover the cost.

The civic body has made special building bylaws for the project to make it feasible and affordable for the Middle Income Group and Economically Weaker Section.

As per Abhijit Bangar, Municipal Commissioner of Nagpur, they are planning to begin construction works on five shopping malls at Cotton Market, Sokta Bhavan, Sakkardara, Netaji Market, and Budhwar Bazar within 6-months time period. They will soon start the tender process for Sokta Bhavan, Sakkardara and Budhwar Bazaar Complex.

For making the Orange City Street Scheme a success, the Nagpur Municipal Corporation (NMC) has come up with many initiatives including floating floor space index (FSI), special building regulation and use of all buildings for various purposes.

Image Sources: Google

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Affordable Housing blog Buying property gst Real Estate Real Estate News Smart Residential Living

Realtors appeal to the housing ministry to cut GST rate

Apr 17,2019 / By / No Comment
GST-Tax-implimentation

Realtors’ appeal for GST rate cutting

In a letter to the GST Council, brokers have requested that real estate agents be released from GST on services provided for affordable housing.

The Association of Certified Realtors of India (ACRI) has appealed to the housing ministry to reduce the 18% goods and services tax (GST) levied on brokers on the brokerage they earn from builders on each transaction and make it 5%.

Reduced GST on brokerage will help them overcome trouble and give better job opportunities to their community in coordination with the GST Council.

Brokers said they were fighting with a slowdown in sales and getting it difficult to sustain as builders refused to pay GST levied on sales.

“No builder is ready to pay GST on the brokerage. The channel partners are already squeezed; this is just an additional burden,” said Irshad Ahmed, president, National Association of Realtors.

The ACRI and the National Association of Realtors had also appealed to the central committee to withdraw the 5% fine on brokers. “The finishing and delivery of projects are not in our hand. We are only a marketing member and reliant on the information was given by the developers and authorities,” said Aggarwal.

The service tax levied on real estate agents’ services was raised to 14% from 12% in June 2015, just before GST was levied on realtors. The GST rate applicable for all services provided under the heading ‘real estate services’ on a fee or commission basis or contract basis and for services by way of renting of a residential home for use as residence is excluded from GST. Other rental aids attract GST at 18%.

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GST Update: New GST Rates For Real Estate

Feb 26,2019 / By / No Comment
GST

The Goods and Service Tax (GST) Council in its 33rd meeting has been conducted on Wednesday, 24th February 2019. The discussion on real estate related issues have been discussed and The lower tax burden on home buyers is expected to push demand in the segment which will, in turn, will keep developers committed to building more affordable homes. The decision will provide relief to the middle-class homebuyers in metros as well as non-metro cities. At the same time, the decision is expected to help the govt’s move towards achieving its target of “Housing for All by 2022”.

Demand for residential properties is expected to receive a major boost following GSTthe government’s decision to reduce the Goods & Service Tax (GST) rates for under-construction projects to 5% from the effective rate of 12%. Keeping in mind the objectives of  “Housing for All by 2022”, the government has reduced the GST to marginal 1% for affordable housing. Apart from that, completed projects which have received Occupancy Certificate (OC) will not attract GST.

Rationalization of GST Rate:

Residential Segment Type

Existing Effective GST Rate

New Effective GST Rate

ITC Availability

Residential properties outside affordable segment

12%

5%

Without ITC

Affordable housing properties

8%

1%

Without ITC

3. New Definition of Affordable housing – A residential house/flat of carpet area up to 90 sqm in non-metropolitan cities/towns and 60 sqm in metropolitan cities having a value up to Rs 45 lacks.

Both conditions will have to be met – house having a carpet area of 50 sq mtr valued at 50 lacs will be taxable at 5% and not 1%.

As per GST Council, Metropolitan cities are Bengaluru, Chennai, Delhi NCR (limited to Delhi, Noida, Greater Noida, Ghaziabad, Gurgaon, Faridabad), Hyderabad, Kolkata, and Mumbai (the whole of MMR).

4. Builders for the above types of residential projects will not be eligible to claim the input credits. As a result, the elimination of Input Credit Tax benefit may hit profitability for the supply side.

5. Transferable Development Rights /Joint Development Agreements / Long term lease premium and FSI(Floor space index) transfers shall be exempted only in case if it pertains to a taxable residential project, in other words, TDR(Transfer of Development Agreements) for commercial projects will be taxable @ 18%

6. Above changes will be effective from 1st April 2019 after notifications are issued

How will the new GST Rate Benefit the Homebuyers?

  1. Now the homebuyers will get a fair price deal. Earlier, the GST Tax rate was 8% for affordable housing properties and 12% for regular housing projects. But in the GST Council Meet that happened on Feb 24, 2019, the GST rate was cut down to 1% for affordable housing projects and 5% for regular housing projects, with no input tax credit.

  2. Affordable Housing plans will get attracted to GST at 1%.

  3. The interest of the homebuyers/consumers towards buying a property has been increased.

  4. Input Tax Credit not being passed on home buyers/consumers will not be an issue.

  5. Un-utilized ITC(Input Tax Credit), which has been used as the cost of the project should be removed and should lead to a better price.

  6. Tax structure and tax compliance should become simpler for builders.

Note:
TDR – Transfer of Development Rights
JDA – Joint Development Agreements
FSI – Floor Space Index
ITC – Input Tax Credit

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Top 6 cities where you can buy affordable homes

Jun 20,2018 / By / No Comment

Real estate investment. House and coins on table.The government has made a number of efforts to create an eco-system and environment to promote affordable housing. It has approved infrastructure status to Affordable Housing and also eases buyers to afford houses by giving tax concession, dropping the borrowing rates and increase flow of private and foreign capital in the real estate sector.

Thinking about where to buy affordable housing. Here are top 6 cities where you can buy affordable houses!

Bengaluru: You really need to do a market survey before you go ahead with your decision of buying in the affordable locations in this city. However, localities such as Kengeri, Ramamurthy Nagar, Electronic City Phase-2, Chandapura offer properties in the price range of Rs 3,000-4,000 per sq ft. A 2BHK costs between Rs 25-40 lakh while a 3BHK flat is estimated to command a price range of Rs 40-80 lakh.

Mumbai: We all know that Mumbai is a city offering expensive properties, yet there are affordable locations where you can buy property within the price range of Rs 5,000-7,000 per sq ft. Localities offering affordable properties are Vasai West, Vasai, Virar, Kalyan, Mira Road, and Nalasopara. In these locations, you can expect the price of 2 and 3BHK units between Rs 40-80 lakh.

Pune: It is an emerging destination for IT and manufacturing industries. Localities such as Chakan, Talegaon Dabhade, and Pirangut offers mid-segment properties. For instance, Chakan, has many options for all types of properties. You can expect a 2BHK unit to cost Rs 20-40 lakh, whereas a 3BHK flat may cost Rs 40-70 lakh.

Delhi-NCR: When it comes to Delhi-NCR, home buyers have a number of options for affordable homes. Affordable housing is available in localities such as Raj Nagar Extension and Yamuna Expressway, Greater Noida, Greater Noida West. The price range in these areas is Rs 3,000-4,000 per sq ft. You can expect lower or higher prices depending on the amenities and projects you choose. A 2BHK will cost you Rs 20-30 lakh whereas a 3BHK is expected in the range of Rs 40-60 lakh in these locations.

Kolkata: It is an extremely price sensible city where 60% of localities fall in the price bracket of Rs 3,000-4,000 per sq ft. Properties in the peripheral areas such as Rajarhat, Airport area, Garia, Joka, and Howrah are some of the locations where prices are affordable. Property buyers can get 2 and 3BHK units within Rs 20-60 lakh here.

Hyderabad: Just like Kolkata, Hyderabad is also a price-conscious city where 70% consumer preference is for Rs 3,000-4,000 per sq ft. price bracket. This two budget segment decides the overall movement in the market.

Areas like Kukatpally, Miyapur, Chandanagar, Manikonda, Ameerpet, and Sainikpuri are some of the locations where the rates are not only affordable but there is also a good supply of properties. You can get 2 and 3BHK units within Rs 30-60 lakh but the price may vary depending on the project and location.

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