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Ahmedabad Real Estate News

Tata Housing sets sights on Rs 15-20 lakh affordable homes again



Tata Housing

The Mumbai-based firm will also start deploying capital from its two platforms with CDC-IFC and Macquarie

Bengaluru: After focusing on premium housing for several years, Tata Housing Development Co. Ltd plans to resume building homes costing Rs15-20 lakh, after incentives in the Union budget made low-cost housing more attractive for builders.

The Mumbai-based firm builds affordable homes under Tata Value Homes and premium and luxury homes under Tata Housing. Within Tata Value Homes, its entry-level homes are under Shubh Griha, and the slightly more expensive homes under New Haven at Rs25-60 lakh.

The Union budget on 1 February proposed infrastructure status for affordable housing projects to facilitate higher investments in the sector. It also proposed a 100% tax deduction on profits for building houses of up to 30 sq. m and 60 sq. m in carpet area in the top four cities and the other cities.

“After being quiet on Shubh Griha, this year we plan to build more homes in the lower end of Rs15-20 lakh. We haven’t been able to do such projects in the past two years from a profit perspective and because of land availability issues; but because of the tax breaks and other incentives announced in the budget, we want to return to this segment,” Tata Housing managing director and chief executive Brotin Banerjee said.

Between 2009 and 2014, when it launched its first Shubh Griha project at Boisar in Maharashtra and the last phase of its Ahmedabad project, the realty firm has delivered some 4,000 homes.

Tata Value Homes has a $90 million investment partnership with The International Finance Corp. (IFC) and CDC, UK’s Development Finance Institution (DFI) and The International Finance Corp. (IFC) to provide affordable housing for low-income households. It also has an equity platform of around Rs2,000 crore ($307 million) with Macquarie Infrastructure and Real Assets (MIRA), a part of Australia’s Macquarie Group Ltd. The developer will begin to deploy capital from the two funds and close its first project transactions this year.

This year, Banerjee said it will start deploying capital from these corpuses and close at least a project each from both these platforms.

“The strategy is to maintain a diversified portfolio where we will build low-priced homes but also build homes in the Rs1-2.5 crore segment, which have performed well. However, we will have to chase profit rather than focusing on boosting market share. If needed, we can drop market share,” he said.

Housing shortage at the beginning of the 12th Five-Year Plan (2012-17) was estimated at 18.78 million, according to a report by the ministry of housing and urban poverty alleviation.

The Union budget also proposed that for joint development agreements signed for development of property, the liability to pay capital gains tax will arise in the year the project is completed.

The deferment of capital gains tax on JDAs would help reduce the cost of land for developers. Also, reducing the long-term capital gains holding duration from three years to two years will help bring transparency in transactions in the secondary market.

The government’s aim is to complete 10 million houses for the homeless and those who live in kachha houses by 2019.

“Affordable housing is the need of the hour but in India, it is still a business where people are trying to learn the ropes of the business. The success in doing affordable housing will depend on developers creating independent entities dedicated to build low-frill homes, separate from their regular business,” said Gulam Zia, executive director, advisory, retail and hospitality, Knight Frank India.

Ahmedabad Real Estate News

Under Construction Flat Booking Finds Tax Deduction Under Time Constraints



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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Ahmedabad Real Estate News

Nagpur One Of The Big Potential Cities For Affordable Housing



credai nagpur

According to a report released by CREDAI Nagpur is among 45 potential cities that are projected to drive the demand for affordable housing. The ‘Dawn of India’s Future Cities’ report was released at the two-day New India Summit organized by CREDAI in the city.

As per the press release issued by CREDAI, Lucknow, Jaipur, Kochi, Bhopal, and Ahmedabad are some of the other main cities included in the list of 45 cities. The New India Summit will focus on the opportunities in Tier II and III cities of India.

As per the release, “Driven by investments in infrastructure, affordable housing, skilled workforces, these cities can potentially see accelerated growth in the manufacturing, tourism and warehousing sectors, and emerge as India’s new megacities”.

The release further added that the study based its findings on key parameters such as socio-economic momentum, enhanced connectivity infrastructure and high-value indicators. With a sharp-focus on real estate, it identified areas of opportunities for developers while reiterating the impact of regulatory changes on the sector.

The study suggested that the country needs new cities to augment its growth. Initiatives such as ‘100 Smart Cities’ and the Urban Rejuvenation Scheme — AMRUT— will provide emerging cities with a blueprint for becoming the next flagbearers of development in India.

“India’s demographic capabilities bring a huge opportunity to match the world’s economic superpowers. This opportunity also brings with it challenges such as developing new urban centres,” said Jaxay Shah, CREDAI’s national president.

Geetamber Anand, CREDAI’s chairman added, “The Nagpur summit will help builders gauge the opportunities in smaller centres. The Tier I cities are already overcrowded There is a clear need for new cities to be developed as the growth engines of the country”.

Union Surface Transport Minister Nitin Gadkari also addressed the meet through video conferencing.

Also Read: Pune Smart City Targets Rs 100 Crore Grant From World Bank

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Ahmedabad Real Estate News

CREDAI New India Summit



credai new india summit

CREDAI is the apex body that represents over 12,000 private Real Estate developers spread across 23 state-level chapters and 177 cities in India. Established in 1999, CREDAI has worked hard to make the industry more organized and progressive by networking closely with Government representatives, policymakers, investors, finance companies, consumers and real estate professionals.

The New India Summit is another such effort from CREDAI to direct focus on Tier II, III and IV cities and develop them to be the forerunners of success. CREDAI New India Summit is all set to unleash the potential of an emerging India. This one small step has the power to give way to a new India.

For the longest time, our leaders and foresighted influencers have put all their time and energy in developing the Tier I cities namely Bengaluru, Mumbai, Delhi, Pune, Ahmedabad, Hyderabad, Chennai and Kolkata. No doubt, these cities have really changed the way people look at India today. These cities are the epitome of advanced technology and modern culture. But they also face challenges due to the grave pressure of urbanization. Decreasing quality of life, increasing the cost of living, overpopulation and unemployment, increase in transit time and traffic congestion, expensive housing, hospitality, education and healthcare facilities are some of the issues that all the Tier I cities face today.

According to a report, smaller cities are developing 79% faster as compared to metros with just 21%. Our of the 12,000 CREDAI members, 76.77% of them are from Tier II, III and IV cities. Looking at the scenario, it is only innate to divert the energies in developing the areas which still have potential. Thus, offering a good quality life to people in those cities itself and taking the pressure off of the Tier I cities.

The Forbes Magazine has said small cities are India’s emerging business locations. The government has also been putting dedicated efforts into schemes that directly benefit the growth of Tier II, III and IV cities. Sustainable economic development, improving infrastructure and transportation, increasing employment opportunities, and introducing technologies for rapid urbanization are some of the prime agendas that the government has been taking actions on.

The CREDAI New India Summit will take place on the 9th and 10th November 2017 in Nagpur, Maharashtra.

Also Read: FS Realty Bags The 9th Realty Plus Excellence Awards (North) 2017

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