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Maharashtra: Property is Expected to Get Expensive as Buyers to Pay Input Tax Credit

Jun 12,2019 / By / No Comment
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Property Cost in Maharashtra is Expected to Get Costlier as Buyers Have to Pay Input Tax Credit

The Confederation of Real Estate Developers Association of India (CREDAI) in its annual general meeting which was held in Kolhapur on 8th June 2019 has decided to pass the responsibility of Input Tax Credit to buyers. This move by CREDAI is expected to increase property prices in Maharashtra by Rs.200 per sq ft.

Rajiv Parikh, President of CREDAI has informed that a discussion was made which influenced the industry body to take the decision. However, the effective date of the same is yet to be determined. The industry body will follow up with the State government regarding the same.

Shantilal Katariya, Vice-President, CREDAI, has added that builders are paying 13% tax on all construction materials to the government but they are not recovering the same from the buyers. Input Tax Credit is a part of the Goods and Services Tax (GST), which is applicable in case any goods or services are furnished to a taxable person. Builders were not passing this tax to the buyer.

He also added that CREDAI will follow up the government in this concern.

Earlier a resolution was passed in this regard, asking the government to possess equal provision for RERA as all states have different terms under RERA, which was giving difficulty for business.

As per vice-president of CREDAI, builders in Maharashtra are the most affected as the state alone has a share of almost 50% of real estate business due to rapid urbanization. If there will be an equal RERA in all states, it would ensure a smooth business environment.

In another initiative, CREDAI complimented the government’s decision to amend the Land Title Act. However, to avoid litigation in future, search report for land will be prepared by the state government and not a private lawyer. As a result, it will bring down the number of litigation.

Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. CommonFloor does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.

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Trends to redefine the Indian Real Estate Market 2018

Jan 8,2018 / By / No Comment

In 2017, the Indian Real Estate sector has seen a substantial alteration with the implementation of reforms such as GST and RERA. This year look promising for good supply of houses across major Indian markets, and the growth prospects look brighter than ever. The Act was formulated to streamline and standardize the unorganized real estate structure in India.

Upgrading in the regulatory framework has built up an attractive destination for both global and Indian investors. So far, Indian real estate has attracted USD 32 billion in private equity and due to transparency, NRIs find India’s real estate market more trustworthy.

Developers will re-structure their business models, developers launched many projects and there was no assurance of completion of the projects. Now, through the RERA act, a time limit has been set for the projects to be completed. It will force developers to upgrade their business model. The developers will require bringing more clarity as well as liability in their system, and do a lot to upsurge consumer confidence.

Also, the Goods and service tax (GST) as well as the Benami Transactions (Prohibition) amendment act; will have a major impact on, how developers run their business. Developers should bring changes in their business models to maintain in the market.

The REITs will have a crucial and long-term impact on developers, with the choice of either risking or ‘corporatizing’ taking over, with their larger counterparts.

Here are the trends that are expected to reshape and redefine the sector:

1. Real estate developers are changing their business plans- Recent implementation of reforms such as the Benami Property Act, RERA, and GST have enforced a greater level of accountability, transparency, and quality-on-time on the part of real estate developers. Projects are therefore much more trustworthy and meet the set standards.

2. Workspaces are evolving into ‘co-working’ spaces- With the fast-evolving co-working space culture in India, regular office spaces will give way to more hybrid co-working spaces. Corporates and co-working operators will now work one behind the other, which in turn will benefit the real estate economy and also increase productivity, cost-efficiency and employee retention.

3. FDI into real estate will increase further- The launch of Real Estate Investment Trusts in 2017 enhanced transparency in real estate transactions, the real estate sector will draw even more worldwide investors than before.

4. Affordable housing- There is a target of building one crore new houses in rural India by 2019. The Housing for All scheme has been fixed for 2022, and affording housing in India is receiving the much-needed infrastructural attention in order to meet the target set.

5. REITs will permit substantial growth- It is expected that REITs will add considerable growth in India’s growth story. As progressively office spaces in India become REITs complaint, a variety of smaller investors will put in their money in return for regular dividends at relatively low risk.

With the growing trends in real estate segment, investors are now moving for investment in small scale as well. Real estate investing, even on a very small scale, remains a proven means of building an individual’s cash flow and wealth.

RERA was formulated to streamline and standardize the unorganized real estate market in India. However, once the market is standardized, there will be an array of opportunities to scale-up. With untrustworthy and deceiving developers out of the market, there will be only one way to go, forward.

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Pet-Friendly Homes in India is the new market gimmick

Dec 7,2017 / By / No Comment

A few years ago it was problematic to find an apartment complex in a main Indian city that would rent to pet owners. Pets were not welcome with authorities mentioning a variety of reasons some valid and some flimsy. Though no law prohibitions people from having pets, and Resident welfare associations have no power to throw out denizens with animal companions.

Today, it is stress-free to find an apartment complex with pet-friendly features and facilities. Acceptance of pets has become more common in both old colonies as well as forthcoming building complexes. Building complexes in localities like Koramangala in Bengaluru, now welcome pets as long as owners warrant hygiene and no trouble to other residents.

The newest rules passed by the Animal Welfare Board of India are in favour of keeping of pets in an apartment or a society. Some of the major points covered by these guidelines are:

• No RWA has the right to prohibition a denizen from keeping pets.
• This ban cannot be compulsory even if a majority of people are in favour of this ban.
• A ban on a pet cannot be based on null and void reasons like a dog barking.
• A ban cannot be hosted regarding the size of pets in a society.
• No society by-law or regulation can authenticate a pet-related ban.

Pet-friendly housing features

But with the changing demographics and rising demand for pet-friendly housing, developers and architects are integrating pet facilities in the design of individual homes. Apartment developments coming up in Bengaluru now feature rooms with pet-sized furniture, custom-built cabinets for food bowls and nooks with heated window seats. There are some complexes that even come with a dog pool separate from the people pool.

Developers are also making special rooms for pets like veterinary clinics, day boarding, dog-walking services, grooming stations, miniature dog parks, and rooftop dog walks with special cleaning systems. Some builders are adding insulation between walls and floors to soften pet noises, mainly barking.

Smart devices to watch over pets

The improvisation of smart technology and home automation has added another dimension to pet-friendly features in apartment buildings. Latest mobile applications allow you to set up cameras in your apartment so you can use your smartphone to check up on your pets while you are away at work.

With the help of these smart gadgets, you can also lessen some of your own fears about what your pet does when you are away.
Technology is also simplifying communication with your pets even if you are not at home. Dual mode pet monitors not only keep a watch over your pet’s activities but also let you communicate with them. All you have to do is turn on the mic on your phone, and your pet can hear you at home and react to you in real time.

Conclusion

After many years of prohibiting companion animals, apartment complexes in many major Indian cities are now accepting and welcoming them. Some developers have even started using pet-friendly features as a marketing gimmick to promote their properties.

Like any additional facility or amenity, pet accommodations experience extra investments and maintenance costs. However, pets are like family and most owners will do anything for them, when it comes to keeping them happy and healthy, irrespective of cost.

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Walk-to-work concept is gaining momentum in Indian Real Estate

Dec 6,2017 / By / No Comment

The concept of new urbanism and walk-to-work is gaining momentum in major cities. The concept of new urbanism inspires developments such as housing, workplace, and shopping in the vicinity of each other, and walkable streets and blocks and reachable public spaces play a vital part in such developments.

According to Colliers Research, about 90 million sq ft of office space under the different stage of construction across India is likely to complete in the next three years, and to be precise IT-ITeS districts of the cities will promote such walk-to-work concepts in Indian cities.

Bengaluru residential developers have already started trying out the concept of walk-to-work with projects near Whitefield and Hebbal. Integrated developments with schools, colleges, malls and public spaces within 500 mts to 1 km range will further counterpart such walk-to-work growths.

Tier 1 developers are concentrating on integrated developments. Some of the most popular samples of the integrated township are Prestige Shantiniketan and Brigade Metropolis in Whitefield, World Trade Center in Yeswanthpur. More developers are going to join the league.

The Magarpatta city in Pune is also one such successful example of a viable development model integrated with the commercial zone, housing developments, institutions, healthcare facilities and entertaining spaces with best in class infrastructure.

At the same time, Transit Oriented Development (TOD) trends should create a balanced land-use blend with residential developments along the transit corridor that help in succeeding controlled developments within the cities.

With a focus on the creation of mixed-use development in the effect zone of transit stations that are within the walking distance of (500-800 m), TOD is possible to lessen the average travel time and expenditures on transportation.

TOD should also include a facility for public spaces, systematized parking and support foot-travelers, bicyclists and non-motorized transport (NMT) users in cities.

Recently, India has observed a notable economic growth, Indian cities are emerging at a rate faster than other cities in the world. According to the Ministry of Urban Development (MoUD), the urban population in the country, which is approximately 377 million, is expected to grow up to 600 million by 2030.

This rapid development coupled with growing residential and commercial developments has led to many critical significances such as road traffic issues, increased pollution, public safety, and flooding. This, in turn, is weakening the livability quotient in the fast urbanizing metro cities.

While India’s collective annual infrastructure investment amounts to 35% of GDP, the government evaluates that it needs USD 1.5 trillion in infrastructure investment in another ten years. Even this huge amount will possibly only help bridge the infrastructure shortfall rather than create room for future infrastructural development.

As per the study was done by Colliers Research, the real estate developers should also focus on mixed-use developments at city fringes or beyond the city limits to house the overflowing population of the urban region to stabilize population explosion in main cities.

This planning method will not just ease the burden of urban infrastructure but also drive affordable housing as it remains as a distant dream owing to the high land cost in overbuilt areas in the city.

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