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1BHK flat prices may dip further in outer Mumbai suburbs

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1BHK flat prices may dip further in outer Mumbai suburbs

Developer Manohar Shroff, former secretary of Maharashtra Chamber of Housing Industry (MCHI-Navi Mumbai), said flat purchasers with a limited budget will benefit a lot from the relief extended to builders.

MUMBAI: Developers with projects outside Mumbai said incentives for affordable homes announced in the budget will boost the realty market in the city. The budget has eased rules this year to grant 100% tax exemption on profits from selling flats of 300-600 sq ft carpet area rather than the built-up area. This will increase the size of the flats on which a builder can make profits without any tax by 25-30%. In non-metro areas, limit is 600 sq ft carpet area and in metros, 300 sq ft.

Developer Manohar Shroff, former secretary of Maharashtra Chamber of Housing Industry (MCHI-Navi Mumbai), said flat purchasers with a limited budget will benefit a lot from the relief extended to builders.

For instance, if a house in the affordable segment was earlier priced at, say, Rs 20 lakh, it will now cost Rs 17-18 lakh due to the 100% tax exemption offered.

“In Mumbai, a flat with a 300 sq ft carpet area in Dahisar or Mulund used to cost in the range of Rs 25 lakh to Rs 30 lakh. But now the price will drop by Rs 2-3 lakh per unit as more builders will start projects in this category, and so the supplies will automatically go up, thereby reducing the costs,” said secretary of Builders Association of Navi Mumbai, Haresh Chheda.

Chheda said the Budget has also extended the time limit to enjoy tax exemption for such constructions from 3 years to 5 years.

In the extended suburbs up to Panvel, Kalyan, Badlapur, Ambarnath-where the carpet area limit to enjoy the exemption has been set at 600 sq ft-the cost of a 1BHK will further reduce as land prices are not as steep as in Greater Mumbai.

“The affordable housing sector could not have asked for a better budget. It has a series of directives that are positive, especially the infrastructure status to this sector. It’s been a longstanding ask that’s finally materialised”, said Rajesh Krishnan, CEO of Brick Eagle. His company has affordable housing projects in Maharashtra, Tamil Nadu, Gujarat and Rajasthan.

He also said, “Conferring infrastructure status will make borrowing for projects easier due to longer tenures of loans and better terms. The government has already eased norms for registered FPIs for investment in the infra sector (subscribe to bonds issued by unlisted infra companies) which will prove beneficial.”

Krishnan further stated, “Extending the project duration from 3 to 5 years to avail the tax break under section 80-IBA of Income Tax Act is another major move in favour of developers.”

Maha airports to get PPP wings

Maharashtra stands to gain big time from the Centre’s decision to public-private operate airports in smaller cities in the partnership (PPP) mode. An Airports Authority of India (AAI) official told TOI the state would get priority on this front for having the maximum number of airports in the country. The total number of airports and airstrips in Maharashtra–both used and unused–is more than 25. Of them, AAI manages six–Mumbai, Aurangabad, Pune, Solapur, Gondia and Kolhapur. The Maharashtra Airport Development Company Limited manages a total of eight airports, but none of them is fully operational at the moment. Kolhapur, Solapur, Aurangabad and Amravati come under the tier-II category of cities. Airports in these cities are likely to get wings in PPP mode. TNN

Property deals up in Mumbai & Pune

Demonetisation and the wait-and-watch policy adopted by buyers ahead of the Budget brought down property registrations in the state by 24% in January, but Mumbai Pune and Thane showed improvement in the first month of 2017. “In Pune division, registrations increased by 1%, while in Mumbai and Thane, they went up by 7% and 9%,“ said an official said.

Source: economictimes.

Ahmedabad Real Estate News

Under Construction Flat Booking Finds Tax Deduction Under Time Constraints

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Tax Deduction

If a buyer makes a transaction to book an under-construction flat and if he acquires it within the three-year period of the sale of his old house, then he is entitled to a tax deduction, says a ruling from the Mumbai bench of the Income-tax Appellate Tribunal (ITAT). If an apartment is booked in an under construction project than it must be viewed as a method of constructing residential tenements, says the December 18 judgment.

That means if the buyer uses the entire gain from the transaction to buy another house within two years or construct another house within three years. The two- and three-year period applies even if the buyer bought another house a year before selling the first one. But the property should have been bought in the name of the seller.

It is mandatory that within a period of two years after or one year before the date of transfer of old house, the taxpayer should construct a residential house or acquire another residential house within a period of three years from the date of transfer of the old house. The date of receipt of compensation will determine the period of acquisition or construction in a case of compulsory acquisition.

This exemption is effective and can only be claimed in respect of one residential house property purchased/constructed in India. In the case of multiple house purchases or constructions, the exemption under section 54 will be available in respect of one house only. Any purchases made outside the country does not fall under any kind of exemption. Section 54 gives relaxation in such cases by providing relief to the taxpayer who sells his residential house and acquires another residential house from the gained capital.

After the sale of an asset, the difference between the buying price and the selling price is a capital gain or a capital loss. These are further classified as long-term or short-term. If a property is held for 24 months or less, with effective from 2017-18, then that asset is treated as Short Term Capital Asset. Then an investor can make

treated as Long Term Capital Asset. Then only a Long Term Capital Gain (LTCG) or Long Term Capital Loss (LTCL) can be made on that investment.

ITAT agreed that booking of a new flat in an under-construction apartment should be considered as a case of “construction” and not “purchase”, hence following the earlier decisions of the Bombay high court and the tribunal itself. Further ITAT allowed the fact that the construction can began prior to the date of sale of the old asset. Same was stated in the earlier judicial decisions of the Karnataka high court and Ahmedabad ITAT, that the date of commencement is not relevant but it is the completion of construction that comes in relevance to section 54.

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India Real Estate News

HDFC and Quikr Make A Deal

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HDFC and Quikr Make A Deal

According to a deal between HDFC and Quikr, a stake of more than 3 percent will be given to the mortgage giant in return to its transfer of offline and online real estate brokerage business to the classified ads platform.

After acquiring Commonfloor in 2016 Quikr already has a major presence in online real estate broking.

“Most of the searches for real estate are moving online. Quikr has a much bigger presence online. Through this deal, we are partnering Quikr in the broking business,” said HDFC MD Renu Sud Karnad. According to her, this deal will strengthen Quirks position with offline support.

The deal suggests that HDFC will transfer to Quikr its entire shareholding in HDFC Realty, a real estate brokerage platform, and HDFC Developers, which runs the HDFC RED online platform.

Karnad added that the deal expects Quikr to generate home loan leads for HDFC. The transaction consists of a co-branded alliance between both parties and the HDFC brand will continue to be used online for a year.

The e-real estate classifieds platform HDFC RED has around 7,000 project listings and generates traffic of over 80,000 unique visitors per month. HDFC Realty has a 300-member, in-house sales team, and 7,000-strong nationwide broker network. Avendus Capital was the exclusive financial adviser to Quikr while Kotak Investment Banking acted as the exclusive financial adviser to HDFC on this.

30 million monthly users make Quikr India’s largest classifieds platform. It runs multiple vertical businesses across real estate, automobiles, jobs, services, and goods. The Quikr Home, its real estate vertical generates 3.5 million monthly unique visitors.

Both companies intend to work closely and conduct analytics and identify potential homebuyers, and therefore home loan customers, early in their home-buying journey. Quikr founder and CEO Pranay Chulet said, “We see great synergies between Quikr and HDFC as we start working together to bring a seamless online-to-offline platform to developers and consumers.”

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India Real Estate News

Retaining The Sustainability: GRIHA Launches Star Rating For Urban Homes

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GRIHA Launches Star Rating For Urban Homes

Green Rating for Integrated Habitat Assessment (GRIHA), is the National Rating System of India, a Sanskrit word meaning – ‘Abode’. Human architecture has always consumed resources in the form of energy, water and material from the environment. From their construction to operation, these habitats absorb the resources throughout their life cycles, emitting wastes in the end. This emission could be direct in the form of municipal wastes or indirect emission into the atmosphere, such as from electricity generation. Hence GRIHA was formed to reduce an architecture’s resource consumption, waste production and overall environment impact up to certain national acceptable limits.

In attempt to quantify all these aspects, like energy consumption, waste generation etc. GRIHA tries to manage, control and bring down the respective to the best possible limit. Being a rating tool, it helps people to assess the performance of their respective projects against the national benchmarks.

Hence it becomes an evaluation of the environmental performance of an architecture on a holistic level. Covering its entire life cycle, this evaluation provides a specific standard for a ‘green building’. This rating system aims to strike a balance between established institutions and emerging concepts, on a national as well as the international level.

The process starts with an online submission of documents according to the criteria. Then a team of professionals and experts from GRIHA Secretariat takes a site visit for the evaluation of the building.  There are four different sections categorized by 34 criteria in GRIHA rating system. Some of them are site selection and site planning, conservation and efficient utilization of resources, building operation and maintenance, and innovation. 

Sanjay Seth, CEO, Green Rating for Integrated Habitat Assessment (GRIHA) Council says, “A rating between one and five stars is being provided, helping the costumers to know about the sustainability of the houses”.

According to the Union Minister, Hardeep Singh Puri, the climate resilient and sustainable buildings are the need of the hour. As the government is aiming to construct around 1.2 crore houses for the urban poor under the affordable housing scheme.

In one of his keynote addresses, Andreas Baum, Ambassador of Switzerland to India and Bhutan said that the Indo Swiss collaboration is operating with the Indian Bureau of Energy Efficiency in the development of guidelines for energy efficient housing.

“At present India is witnessing a rapid urbanisation, if each building becomes greener than the last one, then we have a huge opportunity and hope for our country. We need to look beyond the conventional methods of building, in order to provide our citizens with a good quality of life. Hence, GRIHA gains important in meeting our national goals with respect to a sustainable society”, says Dr Ajay Mathur, director general, TERI & president, GRIHA Council.

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