Japan’s Sumitomo Enters Indian Realty Sector with $2 billion Gurgaon Projects

Japanese conglomerate Sumitomo Corp today announced USD 2 billion township project in Gurgaon as it forayed into Indian real estate sector in collaboration with local partner Krishna Group.

The 50:50 joint venture, Krisumi Corporation Pvt Ltd will build 5,000 flats, shopping mall, office space and educational institution at 65-acre land in Sector 36-A, Gurgaon abutting the Delhi-Mumbai industrial corridor's Global City.

The project, which will have a total built-up area of 18-18.5 million square feet, will be developed in phases, the two partners announced at a media round table today.

"I want to create a Japanese city here...The first phase will comprise 1.2 million square feet of

 built-up, consisting of 430-450 apartments and will be completed in 4-5 years," said Ashok                 Kapur,      Chairman, Krisumi Corp.

Krishna Group, a diversified business house with interests in auto components, media, travel, and entertainment seating, owns the 65-acre land parcel where the mini-township will be built, said Kapur, who is also the head of the Group.

"Idea is to create a niche which Indian market had not seen," Kapur said adding the apartment that may cost Rs 1-2.5 crore will have quality and facilities equivalent to those costing Rs 15-20 crore at present. Sumitomo Corp, which has done 300 real estate projects globally, will bring in the expertise and technology for Krisumi City. 

"India's real estate sector is going through an interesting phase. While consumer's expectations have evolved manifold, most of the traditional developers are finding it difficult to effectively cater to all their requirements," said Masahiro Narikiyo, Chairman and MD,

Sumitomo Corp India. Narikiyo said the Tokyo-based group has done projects in Japan, the US, China, Singapore, Indonesia and Vietnam. The company was attracted to India because it "is politically very stable among emerging markets," he said. "It is governed by democracy, the value we can share." Sumitomo Corp has sold over 50,000 (rpt) 50,000 condominiums in Kansai and in the Tokyo metropolitan area over the past 50 (rpt) 50 years. In the office building business, it operates about 3,30,000 square metres of office space in Tokyo and Osaka.

Kapur said the biggest challenge facing the Indian real estate industry today is quality, efficiency, and commitment to timelines, all of which is exactly what Japan is known for.

"Japan is already beyond RERA," he said .. adding that Sumitomo may enter into more such alliances in India later on. The project spread over 65 acres will be developed in 7-8 phases over 10 years. While the first phase with 1.2 million sq ft development will have over 450 apartments, the entire project will offer around 5,000 apartments.

“The biggest challenge facing the Indian real estate industry today is with regard to quality, efficiency and commitment to timelines, all of which are exactly what Japan is known for. We are certain that our partner, Sumitomo Corporation, part of the 400-year-old Sumitomo Group, with their extensive global experience in real estate development shall contribute tremendously in creating projects with endearing value for our clients as well as the local communities around it,” said Ashok Kapur, chairman, Krishna Group.

The joint venture company has got most of the approvals for the first phase, which will be launched later this year. The construction of the first phase of the project is also expected to commence this year.

Source : http://bit.ly/2EP74ZK

Investing in Real Estate? These Micro Markets can Give Good Returns

There is an uncanny similarity between the stock market and the real estate market today. Though the overall equity market is looking weak, there are several stocks worth investing right now. Similarly, though the broader real estate market is flat, action is happening at the micro level. There are several pockets across metros and large cities where property prices are reasonable and investors can
expect Good Returns.

 

However, don’t expect prices to shoot up like they were between 2005 and 2008. “Rental yield can be a good yardstick for residential real estate. Investors should get in only when the rental yield is more than 3%,” says Pankaj Kapoor, MD, Liases Foras.

The introduction of the Real Estate Regulation Act helps buyers but has removed the information asymmetry that helped generate High Returns from property. “Real estate, especially New Launches, used to double in value in 3-4 years; that phase is n .. Second, the focus has shifted from premium properties to the affordable and mid-priced segments.

Due diligence by home buyers has also improved. “Home buyers are taking time and doing indepth research like visiting property sites several times before buying,” says Jayashree Kurup, Head – Content & Research, MagicBricks. “Three main factors to check is the credible developer, right-sized house and good price. Unlike earlier, home buyers now insist that all three are in place,” says Sharad Mit .. This week’s cover story looks at micro markets that are doing well and could offer value to buyers. We examine the factors that have worked for these pockets and tell you why you should consider buying property in these hotspots. Improving connectivity and quality of space are plus points.

Gurugram Strong Showing

Improving connectivity and quality of space are plus points.



Availability of high quality office space at reasonable rates has helped Gurugram score over more expensive Delhi. “Gurugram remained the preferred office destination in NCR with about 57% share in overall leasing in 2017,” says Sachdev of Colliers International India. In addition to the cost advantage, proximity to the airport is another attraction.

The price performance in Gurugram has been unlike other cities. A similar trend is expected in the coming year as well. “Premium office occupiers will continue to prefer Cyber City, Golf Course Road and NH 8 owing to their enhanced connectivity,” says Sachdev. Similarly, the state government’s efforts to decongest the Gurugram-Alwar highway should make commuting easier from Sector 48.

 For more View Source : http://bit.ly/2sBJMol

Take Five - Dwarka Expressway Primer

Why Dwarka Expressway? The 18 km Dwarka Expressway in 2006 was planned to decongest Gurgaon by providing an alternative to NH8. The 14 km stretch on Gurgaon side is complete but work on the remaining four kilometers is unfinished. Some land on the Delhi side is yet to be acquired.

Decision to accord NH Status: Acquisition of land will become quicker, specially on the Delhi side, once Section 3(d) of the National Highways Act is notified. Section 3 (a) calls for appointment of competent authority for land acquisition on behalf of the government of India.

Other Sections: Section 3(g) ensures that compensation is paid to families. This will be fixed as per the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Second Amendment) Bill, 2015.

Residential Stock: There are as many as 40,000 units expected to come up in this area spread across 70 projects. Construction is in progress currently in sectors 37 C, 37D, 102, 102A, 103, 104, 105, 106, 107, 108, 109, 110, 110 A and 111.

Price Trends: Most residential projects were launched at ` 3,750 per sq ft and their current value is below ` 6,000 per sq ft. Prices in this market almost doubled in 2012-2014 but are now not expected to increase anytime soon. Some developers will time their delivery with the completion of the expressway.

Source: PropertyatNeoDevelopers.Wordpress.Com

Commercial realty business in India rebounds

The year 2015 marked a turnaround for India's commercial real estate as steady economic growth and renewed corporate confidence, especially among ecommerce and IT companies, propelled transactions to the second-highest level in terms of area.

After over three years of weakness, total purchases and leases of office space in the top eight property markets rose to 35 million square feet during 2015. Net commercial real estate transactions by companies rose 17.1% from a year ago.

In 2011, a record 37 million sq. ft.of office space was taken up as rents eased after the global financial crisis. This time, however, it was the result of companies implementing growth plans, according to a report by property consultant Jones Lang LaSalle (JLL) India.

"During the year, office space demand was mainly driven by information technology IT enabled services, ecommerce, startups and large consulting firms," said Anuj Puri, chairman at JLL India. "Players in many other sectors like fast moving consumer goods, banking, financial services and insurance, manufacturing, telecom and pharma did not come into the market - however, this should happen in 2016 and 2017. Next year will also see demand for built to-suit properties, especially from the larger IT occupiers."

Commercial space transactions were distributed across new and old buildings in 2015, compared with largely newly completed buildings in 2011. There was a pick-up in large transactions this year, led by Flipkart, which leased 2 million sq. ft. of a custom-built office campus in Bengaluru, and Tata Consultancy Services, which rented over 2 million sq. ft. of built-to-suit space at Hiranandani Estate in Thane for 15 years.

Among purchases, pharma major Abbott IndiaBSE 1.38 % bought 5 lakh sq. ft. of space at Godrej Properties' commercial project in Mumbai's Bandra-Kurla Complex for about Rs 1,479 crore. A revival of momentum in commercial realty is an indicator of the economy's health and augurs well for job creation. Deals by both investors and occupiers suggest that sentiment is improving for the office property market.

The pan-India vacancy level still stands at 16%, although the `realistic' availability is actually 8-9% because total supply is not always relevant for corporate entities, he said. Many occupiers do not consider Grade-A buildings with multiple owners or those located in areas with inherent disadvantages and connectivity issues. Cities such as Pune, Bengaluru, Hyderabad and Chennai have a vacancy rate of 5-10% and would need fresh supply to meet growing demand, the report said.

Rental growth across Indian cities was steady, with Pune leading the pack with an 8.4% rise. This was followed by a 5.3% increase in average rentals in Bengaluru, 3% in the National Capital Region (NCR) and 1% in the Mumbai Metropolitan Region.

Source: PropertyatNeoDevelopers.Wordpress.Com

PE investments in Indian realty starting a new phase

Private equity investments in Indian real estate is starting a new phase, says JLL India.

In its report ‘Real Estate Private Equity 3.0’, JLL India said “We believe so; the PE investment community has learned from the past and has improved, and the possibility of them focusing on higher returns at the cost of risk again is unlikely.

“If the Indian Government, which has generated a lot of hope, works on the right path and delivers what it promised, the industry will have patience and will move positively,” it added.

Anuj Puri, Chairman & Country Head, JLL India said, “There has been a clear increase of focus among investors about where they want to invest their funds. During 2007-08, investors left no stone unturned to participate in India’s economy and real estate growth story, and invested across all possible asset classes. In the same period, 66 per cent of funds were diversified.”

“The share of such funds has reduced to negligible levels, post-2014. In contrast, residential-focused funds have increased to 85 per cent today from the then measly figure of 14 per cent. These two trends show that the investment approach of investors has changed from weighing every asset class on the opportunity it presented to becoming residential-focused, as this asset class has given maximum returns over the years.”

Source: PropertyatNeoDevelopers.Wordpress.Com

Parliamentary panel recommends pro-buyer measures in Real Estate Bill

A Parliamentary Committee today recommended a slew of measures favouring property buyers, which include a three-year jail term or a fine for a defaulting builder under a new law which will now cover projects of 500 sq. m. or eight flats.

The Select Committee of Rajya Sabha, which examined the Real Estate Bill 2013 and submitted its report in the House today, also recommended that 50 per cent of payments made by home-buyers for a real estate project should be kept in a separate account and used for that specific purpose only while the rest can be spent on other projects.

The Bill aims at establishing the Real Estate Regulatory Authority (RERA) for regulation and promotion of the sector and setting up of an adjudicating mechanism for speedy dispute redressal. It also aims at establishing the appellate tribunal to hear appeals against the decisions of the RERA.

Under the proposed new law, a jail term of up to three years or a penalty of up to 10 per cent of project cost or both can be imposed on a builder in case of defaulting on commitments made to a buyer.

The committee also recommended that the new law should cover projects of 500 sqm and more or eight flats, instead of 1000 sqm or 12 flats as proposed initially in the bill.

The panel recommended that promoters should get their accounts audited within six months after the close of every financial year by a practising chartered accountant.

It was also of the view that real estate development beyond town planning area may be brought under the ambit of the Bill.

The committee, however, did not agree that a person holding more than two apartments or plots in the same project should be treated as a promoter.

It said that a promoter, while applying for registration of any project with the authority, should enclose details of its existing projects, details of approvals, land title and payment dues.

The panel also redefined the carpet area, saying it means the net usable floor area of an apartment, excluding the area covered by the external walls and that under service shafts, exclusive balcony or verandah and open terrace areas, although it would include the area covered by the internal partition walls of the apartment.

Source: PropertyatNeoDevelopers.Wordpress.Com

High level committee approves land for ITC food park

A high level committee on land allotment to industrial units has decided to provide 30 acres of land to cigarette to FMCG major, ITC Ltd for establishment of a food park at Khurda, the emerging hub for food processing units.

The committee, chaired by the chief secretary, also gave its nod to steel equipment manufacturing facility proposed by SMS India Ltd. The facility is also coming up at Khurda, 28 km from here, and is estimated to cost Rs 250 crore.

"The committee considered 27 new proposals and 22 deferred proposals for land allotment. The major proposals were from ITC and SMS India," said Vishal Dev, chairman cum managing director, Odisha Industrial Infrastructure Development Corporation Ltd (Idco), the nodal agency for land acquisition in the state.

The final decision on land allotment will be taken by the government after the committee submits its recommendations. "ITC has already submitted a proposal for setting up a unit to make biscuits and confectionery at the Khurda food park," said a government official. Kolkata-based company is known for its Sunfeast range of biscuits. In the confectionery space, the conglomerate has brands like 'mint-o' and 'Candyman'. ITC is an established player in the packaged food business with brands like 'Aashirvad', 'Delishus' and 'Bingo'. Last year, Indo Nissin Foods Ltd, a subsidiary of Japan based Nissin Foods Holdings, had commissioned its factory with an investment of about Rs 100 crore at Khurda.

Earlier, another behemoth in the packaged food industry- Nestle had evinced interest to set up a state-of-the-art food processing unit in the state at an investment of around Rs 500 crore. Nestle intended to make its entire gamut of products including milk products, beverages, chocolates and confectionery at the proposed facility.

Other packaged food companies like Britannia and Parle Agro are already running their units in the state. The food processing policy of the government aims to promote establishment of units in food parks and mega food parks and increase the flow of investment across the supply chain.

Source: PropertyatNeoDevelopers.Wordpress.Com

Cabinet clears revised real estate Bill, commercial sector to be covered too

The Union government on Tuesday cleared amendments to the Real Estate (Regulation and Development) Bill, 2013, paving the way for legislation on regulators for the sector.

The Bill was introduced in the Rajya Sabha in August 2013 and referred to the standing committee on urban development. Most of the panel’s recommendations have been incorporated in the amendments.

Developers, both in residential and commercial sectors, will be required to register their projects with the regulatory authorities to be set up and will have to mandatorily disclose all information regarding the promoters, project, layout plan, schedule of development works, land status and status of statutory approvals.

Under the proposed law, 10 per cent of the project cost will be imposed as penalty for non-registration and another 10 per cent of project cost or three years in jail or both if still not compliant with the rules and regulations. For wrong disclosure or non-compliance of information rules, five per cent of the project cost will be imposed. The regulators will have the power of cancelling registration in the case of persistent violations and decide on further action regarding completion of such projects. 

The Bill, in the making since 2009, also mandates developers to deposit half the money collected from buyers in a project within 15 days to a separate bank account, to be used only for construction of that scheme. In the original Bill, 70 per cent of the amount had to be kept for this construction.

Ongoing projects that have not received completion certificates have also been brought under the Bill’s purview. These  will need to be registered within three months.  Developers will not be allowed to change plans and structural designs without the consent of two-third of a project’s buyers.

Real estate agents have also been made punishable for non-compliance with orders of the regulatory authority and appellate tribunals to be set under the proposed law.

An online system for applying to register projects is to be introduced within a year of the establishment of regulatory authorities. The  regulator has to decide cases within 60 days. States will have to make rules within a year. Adjudicating officers will be appointed to settle disputes and impose compensation and interest. Appeals against the adjudicating officer and regulatory authority will be to the appellate tribunals to be set up and final appeals will only be to the high courts.

Source: PropertyatNeoDevelopers.Wordpress.Com

FM Arun Jaitley promises to step up public funding to boost infrastructure

Concerned over slow growth of manufacturing sector, Finance Minister Arun Jaitley today promised to step up public spending on infrastructure, ease entry barriers for overseas investors and push Goods and Services Tax (GST) to boost economic expansion.

He also pitched for a low interest rate regime and defended the land acquisition bill saying it would benefit the rural India by promoting industrial activity in non-urban centres.

"Historic opportunity has revisited (us) and we have to use it to the maximum," Jaitley said while addressing investors at 'The Growth Net' conference.

The Minister expressed the hope that the constitutional amendment bill to roll out the GST, new indirect tax regime, would be passed in the next leg of the budget session beginning on April 20.

Once approved by Parliament, GST will subsume various indirect tax levies like excise, service tax and octroi.

Answering questions on the land acquisition bill, which is stuck in the Rajya Sabha, Jaitley said that the Union Cabinet would take a call on the issue as the Ordinance promulgated by the President on the subject is set to automatically lapse on April 5.

The Minister said that while the agriculture and services sectors have been doing well, "manufacturing is a challenge" and the government is trying to resolve the "legacy" issues hampering development of infrastructure sector

"Our manufacturing sector is challenging and it is here that we have to actually invent the key engine of growth. This is an area where countries which overtook us. China is an obvious example...

"Our concentration therefore is on 'Make in India', ability to try and device various methods of financing infrastructure...this is one are where we need to seriously concentrate on," he said.

The Finance Minister said he reviewed the progress of highway projects this morning.

"These are huge legacy issues. In the highways sector alone as many as 77 projects were stuck for want of one thing or the other," he said, adding that "now by resolving the issues 24 of them have taken off".

Referring to the defence sector, Jaitley said he was becoming a little optimistic because "a flurry of activities" is taking place in the sector.

"You see foreign investors partnering with domestic manufacturers, takeovers have started, large groups are now taking overs have started, large groups are now taking interests in entering that particular field," he said.

Earlier, he said only public sector units and some private companies were in the defence manufacturing. The new government has hiked the FDI limit in the sector to 49 per cent from 26 per cent.

"Therefore lot of liquidity getting into railways, highways, may be ports...," Jaitley said, adding that "I don't expect them (the private sector) to suddenly raise a fund and say I don't expect them (the private sector) to suddenly raise a fund and say I will build infrastructure.

"This is the first responsibility of the government particularly when you are trying to get out of the slowdown phase, we are quite conscious of that".

Jaitley said the government was committed to giving a push to infrastructure development.

"In my Finance Bill, there is a proposal to pass on a substantial part in terms of cess for highway authorities ... Rs 8 on that cess means Rs 80,000 crore for the National Highway Authority and part of goes into the railways also," he added.

Therefore, Jaitley said, with liquidity in the hands of highway authority, "incomplete projects can also be assisted by them through some fund mechanism".

The Finance Minister stressed that the government focus was to improve ease doing business in India.

"I mentioned about allocation of resources, resolution of disputes in government contract, bankruptcy law so that the exit itself becomes easier.

"In the ease of doing business there are some initiatives that are in pipeline from entry point to time gap between the entry point and actual start of business, to the enabling environment, the exit and to a non adversarial taxation regime," the Finance Minister said.

Source: PropertyatNeoDevelopers.Wordpress.Com

State budgets more relevant to property buyers

When the Haryana government announced its annual budget recently, the media wrote that there was little to cheer about. The stories did not make front page headlines like the Union Budget did. However, as a real estate buyer, the important thing is to study the announcements made in the state budgets carefully. Remember, property and lands are state subjects. While the Union government has been trying to draft model Land and Rent Bills at the Central level, the truth is that land and real estate policy remain a state subject. Even the much awaited Real Estate Regulation Bill is only recommendatory from the Centre and the states have to implement their own versions for it to be applicable at the state levels.

So, what can you do as someone interested in the residential real estate? Check out announcements of the new growth areas such as industrial zones and townships. Property INVESTORS on the look-out for such properties would do well to track the growth of property along these corridors.

In Haryana, there have been allocations of Rs 3, 0883, 291 for roads and buildings and both urban and rural development allocations are substantial. The INVESTOR will benefit when the details of the allocations and the areas they are to be spent in are announced. Keep watching the announcements and make your decision accordingly. Any allocations to infrastructure will benefit end users. Roads, metros and connectivity normally push up real estate values. So, if you buy in an area that will get an infra boost, you stand to benefit.

Affordable housing too has benefitted from policy declarations. If you are working on a limited budget you will gain from Budget announcements about this category.

In the Andhra Pradesh budget 2015-16, for instance, there is an allocation of Rs 3, 168 for building the Capital City on 33,252 acres. Rs 2,960 crore have been allocated to Roads and Buildings and Rs 122 crore to the Transport Department. In addition, Rs 3, 168 crore has been allocated towards Urban Development and Rs 8, 212 crore towards Rural Development. Rural water supply got Rs 881 crore, while housing has an allocation of Rs 897 crore. Vijayawada and Visakhapatnam Metro Rail projects have an allocation of Rs 300 crore. It was also declared that Andhra Pradesh will become a developed state in the country by the year 2029. Disaster Management was awarded Rs 488 crore.

How should you read this information if you are a potential investor in Andhra Pradesh? You know there are big allocations to the two main cities Vijayawada and Vishakhapatnam. Metro routes are to be drawn and implemented latest by the year 2029. Urban and rural housing will get a push with budget allocations. All these impact property values, directly or indirectly. However, don’t be in a rush to put your money down. Follow the developments on the ground and buy property in those areas that come in the path of progress. That way you will be able to live comfortably or get a good return on your INVESTMENT.

Source: PropertyatNeoDevelopers.Wordpress.Com

Real estate sector gears up for Navratras

India is the only country where every month some or the other festival is celebrated and festive kicks start usually from the month of March or with the festival of colours, Holi. Every sector and industry that follows the B2C model witnesses the most footfalls during that time. Festivals such as Holi, Navaratras, Diwali etc. mark the way for celebrations. For every business, this is the perfect time to come out with something new in the market so as to generate the highest sales. It has been also noticed that customers believe this time period as the most auspicious time to INVEST and invest big, such as a car, gold or even a property.

The real estate developers in India have been very proactive with respect to providing a lucrative deal during the festive seasons, especially Holi, Diwali and Navratras. All these festivals are one of the most anticipated and highly regarded festivals in India. People here have a tendency of waiting for these days every year to make the most important purchasing decisions of their lives. Real estate has always been considered as the most important buying decision; as it involves a lot of MONEY and future of every buyer. Every buyer in India try to wait till Navratras, Holi, Diwali and some other festivals to make a property purchase as it is considered extremely auspicious time for buying any asset. Each year these festivals bring joy to the faces of customers planning to buy a home in India. This time being the most sacred and auspicious time for people in India, it also attracts many customers to buy something new and something big; like property. Indian real estate is based on sentiments therefore, buyers consider this time of the season as the most apt for buying properties. During time like these, developers also try to lure the interested buyers by offering various schemes and offers on their one or more projects. In this way, the demand for real estate is met very well during these occasions.

Like the last year, this year too, developers are gearing up to come out with something for their customers. NCR realty major Ajnara India Ltd. is all set for the upcoming Navratras festival. The company recently announced a unique scheme for all its current projects. The customers will be asked to pay 10 percent as the booking amount followed by 80 percent amount within 45 days from BANK funding and finally, the remaining 10 percent on offer of the possession. In light to this special offer, Ashok Gupta, CMD, Ajnara India Ltd. says, “Navratras are considered to be an auspicious time for INVESTING. And the best investment in today's time is property as the returns are higher and any scheme is a big draw for any buyer. We at Ajnara are providing new scheme on payment plans under a 10:80:10 scheme along with No Pre EMI clause on our projects where one can pay 10% at the time of booking and 80% within 45 days from bank funding and remaining on offer of possession. The catch here is that till we do not offer possession of the unit, we will be liable to pay the instalments to bank on behalf of the customers”.

One of the leading developers of NCR, MMR Group has also launched a scheme considering the auspicious season of Navratras. Scheme has been finalized for their ongoing project 52nd Avenue, located at sector 52, Noida for product Orabella which offers multi use studio apartments. The scheme asks to pay 90% and get 12% assured return per annum till offer of possession or pay 50% and get 11% assured return per annum till offer of possession. There is a buy back scheme as well; pay 40% get 28% on the paid value in 2 years. Mahipal Singh Raghav, CMD, MMR Group says “In India, buyers generally prefer to buy properties during some auspicious events and Navratri being one of the most holy times of Hindu calendar, we usually witness a greater footfall of customers as compared to other days. Owning a home for self is everyone’s dream. Keeping this in mind we have launched this scheme which gives customers an OPTION of earning assured returns or buy back with returns”.

Ansal Housing, the benchmark of Indian real estate has also planned to offer a new payment scheme for its customers for its ongoing projects; Ansal Highland Park located at Sector 103, Gurgaon and Ansals HUB 83 located at Sector 83, Gurgaon respectively. The company has come out with a 30:70 scheme, where 30 percent of the total amount will be paid at the time booking and the remaining 70 percent to be paid at the time of possession. Kushagr Ansal, director, Ansal Housing said “The demand for real estate has been on a rise recently with positive sentiments floating in the market due to decreasing inflation. Keeping this in mind, we have launched a new scheme to allow flexibility in payment for the customers. We have provided the scheme on two of our best projects of Gurgaon. Looking at the way demand is shaping up in the region, it is very important to offer something new to the customers especially when they are anticipating the most”.

Source: PropertyatNeoDevelopers.Wordpress.Com

Will the govt prorogue RS to re-promulgate land Bill?

The government is looking at the possibility of calling an end to the ongoing session of the Rajya Sabha to enable it to re-promulgate the land acquisition amendment Bill.

The two Houses are scheduled to have a month- long recess beginning March 20, before meeting again on April 20 to continue the session until May 8.

According to the plan being discussed in the government, the Lok Sabha will continue its ‘Budget session’ when it meets after the recess but the Rajya Sabha’s ongoing 234th session will be prorogued and it would be the 235th session when it meets on April 20.

According to Article 123 of the Constitution, ordinances can be promulgated or re-promulgated when either of the two Houses is not in session. There is little likelihood of the land Bill finding the Opposition support. The ordinance related to the Bill will either need to be re-promulgated or allowed to lapse when it expires on April 6.

Therefore, proroguing the Rajya Sabha is the only option with the government if it wants to re-promulgate the land Bill. The Upper House, considered a 'continuous House' unlike the Lok Sabha, does not vote on money Bills. But the government will need to get the finance Bill passed in the Lok Sabha when the House meets after recess. Government sources claimed to have found 13 instances of a Parliament session being prorogued mid-session in the past.

But the government can also avoid all this trouble by choosing not to re-promulgate the land ordinance and sending a positive signal to the opposition that it is willing to take it on board.

The government is confident that the Rajya Sabha will pass two of its other key Bills - the Mines and Minerals (Development and Regulation) and Coal Mines (Special Provisions) Bills - before the House breaks for a month long recess on Friday.

Three hours have been allocated for the discussion on the mines and minerals Bill, after the tabling of the select committee report on Wednesday, while the coal Bill is scheduled to be taken up in the Upper House on Thursday. This will leave the government at least a day each for both the Bills to be resent to the Lok Sabha in the eventuality of the Rajya Sabha passing these with any amendments. The Cabinet Committee on Political Affairs will take a call on extending the session before Parliament breaks for the recess on Wednesday.

The Lok Sabha has already passed these two Bills. The ordinances related to mines and minerals, coal and land lapse in the first week of April.

Source: PropertyatNeoDevelopers.Wordpress.Com

Smart cities scheme to be rolled out next month: Venkaiah Naidu

The Modi Government's flagship 'smart cities' scheme will be rolled out from next month, Urban Development Minister M Venkaiah Naidu said on Monday.

"The Government is in an advanced stage of consultations, which will be over by the end of this month. Next month, we will roll out the much awaited scheme," Naidu said at the National Symposium on Sustainable Smart Cities here.

The Ministry had about four rounds of consultations with States, talks with 15 foreign countries such as US, Barcelona, Japan, and Singapore, among others.

Naidu said necessary approvals for the scheme will be competed by this month and action on the ground can then begin.

Smart cities, which will be developed on the PPP model, would incorporate measures such as LED lighting, rainwater harvesting, solid waste management, green buildings, and more metro rail, among others.

Source: PropertyatNeoDevelopers.Wordpress.Com

Land Acquisition Bill likely to be passed this week: Minister

Environment Minister Prakash Javadekar today expressed confidence that the amended Land Acquisition Bill will be passed by the Rajya Sabha this week.

He said two others bills, the Coal Bill and the Mines, are also likely to be passed by the Upper House next week.

“I hope that next week in Parliament (next five days) will be very fruitful. We have accepted all suggestions of various parties. Wisdom will prevail. All the Bills (that are pending) which are necessary for the development of the country will be passed this week,” Javadekar told reporters here.

He said the proposed Land Acquisition Bill has been debated well and hoped that the amendments will be satisfactory.

The Bill tabled in the Parliament, had last month faced stiff resistance from the Opposition and the BJP’s own allies, who termed it as “anti-farmer” and saw protests from all corners.

Last week, on Tuesday, the Lok Sabha passed the Bill with a total of nine amendments.

“There was much debate on the Land Acquisition Bill. Already, after nine amendments (in Land Acquisition Bill) I hope the concerns of farmers have been taken care of. The amendments have been (made) to dispel doubts in anybody’s mind and there will be no scope for any doubt. I hope the Rajya Sabha will also pass the Bill as amended in the Lok Sabha,” Javadekar said.

“The Coal Mines (Special Provisions) Bill and the Mines and Minerals Bill have gone to the Select Committees which will submit their final reports on March 18, and I am sure on March 19 both the Bills will be passed by the Rajya Sabha,” he said.

“We hope that all parties have realised that coal and mineral auction is the best way forward. There is 100 per cent transparency and no scope for corruption in auction.

“We are in constant touch with the Opposition parties, including Congress, and are hopeful that Land Acquisition Bill will come before Rajya Sabha and things will get sorted out,” Javadekar added.

Source: PropertyatNeoDevelopers.Wordpress.Com

Tax-saving tips for buying and selling a property

Irrespective of class or income, Indians are fond of buying gold and real estate. Purchasing and selling the metal is a straightforward game but a property, through its lifecycle (buying, owning and selling), can be taxing. If played right, you can reduce the tax outgo.

While Buying:

A house is the biggest purchase most people make in their lifetime and the government realises this. To give buyers relief, the government has allowed income tax (I-T) deductions if the property is bought on a loan. Under Section 80C, the borrower can claim deduction of up to Rs 1.5 lakh. For a self-occupied property, a Rs 2 lakh benefit is available under Section 24 (b) of the Income Tax Act for interest on the home loan.

If the property is not self-occupied, the entire interest paid to the lender can be deducted from income. "This applies even if a person borrows money from a friend, his family or a private lender provided appropriate loan document between the borrower and private lender is done and there is either a letter or a confirmation of interest charged by lender," said Hemal Mehta, senior director, Deloitte in India.

Problem Area: Under the current market conditions, project delays are a common thing. This can cause financial trouble to the borrower. A person can't claim deduction for the interest if his or her house is still under construction. A buyer can, however, get benefit for the principal amount. On possession, the borrower can claim deduction for the interest paid during the pre-construction period. This needs to be done in five equal instalments, starting the financial year you are handed the property.

Tip: To take advantage of current laws, a couple should take a joint loan in equal proportion. This will allow each to claim full tax deductions available for the principal and interest. This also applies to a child and a parent.

While You Own It:

If it's the borrower's only house and self-occupied, there's no taxation. For those who have two or more houses and these are neither let out nor occupied, the taxation can get tricky.

According to I-T laws, in such cases the owner should take a notional rent value and pay tax on it. There's a prescribed method to calculate the notional value, which takes into consideration the municipal value of the property and the rent control legislation (either of the two) or the prevailing rent in the area for a similar house. "In a case of a notional rent, there is no rule to submit a certificate from a third party. However, it's better that a person submits a letter from a broker stating the prevalent rent in the area," said Mayur Shah, executive director - tax & regulatory services, EY India.

Problem Area: If you are claiming housing loan deductions and housing rent allowance (HRA) at the same time, it can cause trouble. Many people claim HRA by showing rent paid to parents or wife (if there's a house in their names). A taxpayer is allowed HRA and loan deductions both under certain conditions. For example if your house is in a different city than that of residence. The department also allows you to claim HRA if you have a house in the same city as your residence, but you need to have a genuine reason. For example, many people in metros such as Delhi and Mumbai own house in far-off suburbs and can find it difficult to commute, owing to the distance. In such case, the person can claim both.

Tip: While calculating the notional value of a second home, you are allowed to claim few deductions such as municipal taxes. Also, an owner can claim deduction of a sum equal to 30 per cent of the value of the house property towards repair and maintenance charges.

While Selling:

When a person sells a property, he or she needs to pay tax on the profits made. If sold within three years of acquisition, the seller needs to pay short-term capital gains tax (STCG). In this case, the profits are combined with the income and taxed on the I-T slab rate.

If the property is held for more than three years, it attracts long-term capital gains tax (LTCG). The tax is levied at 20 per cent (plus surcharge and cess) after adjusting the gains for inflation using the cost inflation index the government issues.

A seller can save entire tax outgo if he or she uses proceeds equivalent to long-term capital gains for buying a new house located within India within one year prior to the sale date or two years from the sale date. If the property is under construction the time period permitted is three years.

The amount used for buying a new property is exempted from tax and if there's any balance, it will be taxed at a flat 20 per cent (plus cess and surcharge). If you are not immediately buying a house, this money needs to be kept in the Capital Gains Account Scheme (CGAS), and withdrawn within the stipulated timeframe.

If you don't want to go for a residential property, you can still save LTCG tax by investing in specified bonds issued by the National Highways Authority of India or Rural Electrification Corp (under section 54/54EC) within six months from the date of sale. These bonds have a lock-in period of three years. Also, the seller can only invest a maximum of Rs 50 lakh in these bonds, while you have to pay tax on the remaining amount.

Problem Area: If the seller had inherited the property or it was gifted to him, the capital gain will be computed on the basis of the cost to the previous owner. If the house was purchased before April 1, 1981, the I-T department will consider the acquisition cost by the original owner or the fair market value of the property as on April 1, 1981, whichever is higher.

If a person sells an under-construction property after holding it for over three years, the taxation rules completely change. This is because the I-T department considers the person as a property owner only when he or she has received possession.

Tip: While calculating STCG and LTCG tax on sale of property, one can deduct the money spent on improvement and also cost for acquiring the asset such as stamp duty, legal fees, and payment of brokerage.

Source: PropertyatNeoDevelopers.Wordpress.Com

RBI UNVEILS POSTBUDGET RATE CUT

Less than a week after the Union Budget, RBI governor Raghuram Rajan reduced the repo rate - the rate at which RBI lends to banks - by 25 basis points, to 7.5%, citing improved government finances. However, the burden of home and auto loans on borrowers is expected to ease only in April, the beginning of the new financial year. This is RBI's second rate cut in the last two months but only three of 45 banks - Union Bank, United Bank, and Karur Vysya - have so far lowered the benchmark rates.

Banks are yet to pass on the benefits of the earlier midterm cut in rates on January 15. “Since there is a lag effect for the monetary transmission to take place, effect of previous 25 basis points cut together with the present rate cut would encourage banks to review their base rates,“ T M Bhasin, chairman of Indian Bank, said.

Although banks have seen a marginal dip in cost of funds, they are reluctant to lower rates now due to earning pressure on account of rising bad loans. Also, the financial year end is the time banks try to beef up their balance sheet by aggressively mobilizing deposits and often offer better deals.

An immediate rate cut would reduce interest income for banks. Although some economists did forecast a rate cut given the improvement in the quality of fiscal deficit in the Budget, the timing of the rate cut took markets by surprise. Apart from announcing the cut midweek, this was also the first time that RBI announced its decision before markets opened for TRADING.

Source: PropertyatNeoDevelopers.Wordpress.Com

Know how new tax rules impact your property purchase

The Budget 2015 has been released in which many tax laws related proposals were made by the finance minister. Some real estate industry participants are in their favour and some feel they will impact the property buyer’s pocket. These include, abolition of wealth tax, additional deduction u/ 80CCD of Rs 50,000 (this is over and above the Rs 150,000 deduction available) on NPS contributions, corporate tax rate to be reduced to 25 per cent over next 4 years from the current 30 per cent, increase in service tax to 14 per cent from 12.36 per cent.

Now consumers are constantly thinking that how can one save on taxes now? How does it impact the mid-income buyers’ pocket? Will affordable housing remain a distant dream? To give you all the answers, a live chat session was organised with Vaibhav Sankla, director, H&R Block. The topic of the session was – ‘Decoding Budget 2015: Find out how new taxes impact your property purchase’.

So how a first time home buyer can get benefits from this budget especially in the absence of section 80EE, Sankla says, “80EE benefits were available for FY 2013-14 and 14-15 only in the absence of any extension under this section no additional benefit will be available for FY 2015-16.

How will consumer be benefited because of corporate tax reduction? Sankla answers, “You will not get any direct benefit by reduction in corporate tax rates. But if your employer company can save some taxes it may result in higher payouts in the form of salary increments. Further if you can be benefited as a shareholder if you are holding any company's shares.”

What are the implications of abolishing wealth tax? Is detrimental? “Wealth tax is imposed on non-productive assets such as plot of land, gold, cash, residential house properties which are not rented out for a minimum of 300 days in a year, motor cars, etc,” says Sankla.

Those who have large investments in plots, physical gold, etc. shall benefit from abolition of wealth tax. “I think the fact that the wealth collection has been very meagre especially after factoring in the cost of collection lead to the decision of doing away with it. The government intends to recover an amount equivalent to the annual wealth tax collection by way of additional surcharge of 2 per cent from those who earn more than Rs 1 crore of taxable income. Given all this, I think that abolishing the wealth tax is not detrimental,” he says.

On asking is it better to pre-pay a home loan as the principal amount payment is not exempted, Sankla informs that, “one can get a deduction up to Rs 150,000 for repayment of Housing Loan principal u/s. 80C if it is not already exhausted by other eligible deductions. You can further claim deduction for Housing Loan interest paid up to Rs 20,0000 in case of self occupied property and full interest deduction for a rented property. So pr-paying the housing loan is more of a financial decision base on whether you cost of housing loan post the tax benefits is more that what is your opportunity cost (post tax) if you invest the amount somewhere else instead of prepaying”.

Tenancy and Rent:

Is rental income tax exempted? Rental income is taxable under the head income from house property. “You can claim deduction of municipal taxes paid, standard deduction @30per cent of the rental income (net of municipal taxes) and interest on loan taken for purchase/reconstruction/repairs (if any) from it and the balance needs to be offered for taxation as income. However, if the balance amount is negative then the same can be used to set-off against your other taxable income such as salary, interest, etc,” says he.

On explaining how one can save on capital gain tax while buying tenancy premise, Sankla guides that, “You have to purchase or construct a residential house to be eligible to claim tax exemption on capital gains. If you are buying the house and getting the ownership rights of the property then you will eligible to claim the Exemption u/s. 54”.

Source: PropertyatNeoDevelopers.Wordpress.Com

Buying a property? Check the legal status

With many projects facing delays and many getting stuck in court for various reasons, investing in a property with clear legal status is a matter of prime importance on a consumer’s mind. However, most of us are unaware of what kind of legalities should be checked before buying a property. To help and consult such consumers, a live chat session was organized with Sadhawa N. Mishra, partner- real estate, SNG Partners. The topic of the discussion was - “How to check the legal status of your property?".

While explaining, the legal checks that should be made while buying an apartment, Mishra, says, “You need to verify the original title deeds along with building approvals/occupancy certificate. Further, you also need to ensure that all the documents for sale are adequately stamped and registered.”

In case of a resale property, Mishra advised, “Apart from the above mentioned documents, please check the transfer deeds, share certificate”.

Do the legalities differ for plots? To this question Mishra answered, “In case of plots, you need to additionally check the Property card/7/12 extract apart from the above mentioned documents.”

Questions around bank approved projects were asked in abundance by the participants. Does bank approval mean that the property has all the legal approvals? Mishra opined, “It is not necessary. However, presumption can be made that once the project is approved, it has got all the legal approvals.”

Mishra advised participants to avoid paying cash to the builders even if they ask for it. He said, “You should not give in cash. However, if the builder is not ready to listen and you want to go ahead with the deal, then you can do so at the time of registration of your agreement. However, cash transaction is not advisable and you should avoid as much as you can.”

To people who buy or has bought properties through brokers, Mishra counselled them to check the legality of property. He asked them to get a sub-registrar search done to ensure that the property is not encumbered and the relevant agreement for sale is registered with the sub-registrar of assurances.

Considering there are many buyers who avoid vetting documents through lawyer and prefer brokers do the job for them, Mishra strongly recommended them to visiting lawyers to get the documents verified.

In case, the final product differs from the product showed in brochures, Mishra says that one can claim the compensation if the same is a part of the MOFA agreement.

Understanding the Legal Jargons:

What are stamp duty charges and why are we supposed to pay it? Mishra defined, “Stamp duty payment is mandatory by law. All the documents related to property or otherwise need to be stamped as per the relevant stamp act.”

Readers also asked about the importance of getting an Encumbrance certificate? Encumbrance certificate is issued by the concerned Sub-Registrar which mentions details of all transactions related to a property. This is important because if there is any sale/mortgage over the property, then the same can be identified.

Mishra also answered questions on the importance of obtaining NOC from society before selling the property. “Yes, it is important to obtain NOC from the society, though it’s not a mandatory requirement. Societies cannot deny issuing NOC unless there is a dispute over the property with respect to payment to be made to society or Municipal Corporation”.

Source: PropertyatNeoDevelopers.Wordpress.Com

Real estate sector focuses on silver lining

The real estate sector had pinned high hopes on the Union Budget 2015 for introducing various reforms that would not only push the government’s intention of ‘Housing for All by 2022’ but also provide the common man some sops for housing loan and taxations. However, the ‘common man’ seems to be quite dissatisfied. As per a recent reports, more than 51 per cent of the respondents were not happy with the Budget presented. However, 30 per cent of the respondents were satisfied with the measures announced by the finance minister.

Looking for housing options? Here is your chance!

Apparently, those who were not happy were concerned about the expected rate cut in home loans and tax rebates on housing loan repayment that were completely ignored in the speech. In a pre-budget report, majority of the respondents had said that they were expecting measures for reduction in home loan rates and increased limits for tax deduction in home loan repayments.

Voicing the sentiments of the common man, Lalit Kumar Jain, CREDAI chairman says, “A big opportunity to address core issues has been lost. It is fine to talk about policies and a vision like ‘Housing for All by 2022’, but sadly the budget does not give any direction towards executing this. Much like the infra bonds, the government could have launched Tax-free Housing Bonds as well, to allow home loans at 7 per cent to home seekers and provide the much needed funds for the sector.”

However, with several indirect measures such as the ‘benami bill’ and rationalisation of REITs, the sector is expected to benefit in the long run.

Kalyan Chakrabarti, MD, Red Fort Capital mentioned, “I like the budget. Decentralised structure is the focus of the budget. REIT and AIF have attained a leg up. Corporation tax rate decrease road map is cool.”

Sharing the same sentiment, V Suresh, former CMD, HUDCO said “The REIT benefits will be good for more investments for rental, commercial and other properties. Similarly, 2 crore urban and 4 crore rural houses for each family by 2022; allocation of Rs 20,000 crore and tax free bonds for infrastructure is a positive move. All these aspects will definitely impact the realty sector in the long run.”

Therefore, only time would tell as to what extent this would impact a common man. As of now, the real estate sector is concentrating on the benefits these indirect measures would bring to the industry.

Source: PropertyatNeoDevelopers.Wordpress.Com

Shifting to cement roads will save crores of rupees: Nitin Gadkari

Thirty six cement makers have assured supplies of 95 lakh tonnes at prices lower than market rates for road building in the country, Union Minister Nitin Gadkari said today.

"Thirty-six cement manufacturers have committed to supplying 95 lakh tonnes through their 103 plants pan India at prices up to Rs 180 a bag against a market price of over Rs 300 a bag. This would boost road building and result in huge savings of crores of rupees," the Road Transport and Highways Minister told reporters here.

The Ministry has decided to build concrete cement roads in place of traditional bitumen roads. Cement roads are cost-effective and require less maintenance, he said.

"This will give a push to Prime Minister Narendra Modi's Make in India vision," he said, adding that cement is manufactured indigenously whereas bitumen is imported and costlier too.

"It is going to be a revolutionary step in the construction industry's history and would save crores of rupees," he said. A portal has been launched wherein a central or state government agency could register and procure cement directly from suppliers on cheaper rates on "cash and carry basis".

He said the method for making available cement through the portal was transparent and left no scope for corruption.

"Rajasthan government has already decided to build 2,000 km of village roads in the state using cement and concrete," he said adding, "I appeal to all state governments to utilise the facility in the larger interest of nation building and its development," Gadkari said.

He said cheaper cement and iron ore slag would also help translate Modi's dream of providing the poor affordable housing.

He said, he will also appeal to the Rural Development Minister to build cement and concrete roads under the Pradhan Mantri Gramin Sadak Yojana.

Gadkari also said that concrete roads would also be built in extreme Left-wing affected areas along with pre-fabricated material with the help of the army's engineering wing.

He said his Ministry was confident of achieving the target of building 30 kms of roads a day even before March 2016 and is set to construct 15 km a day by the end of this fiscal.

Earlier, he launched "INAM - PRO, the Platform for Infrastructure and Materials Providers" here.

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