1st May 2017 was a red letter day for the Maharashtra real estate sector with the onset of Real Estate Regulatory Authority (RERA) Act. The much-awaited regulation brought in a huge air of relief to the thousands of home-buyers in Maharashtra, especially Mumbai and its sub-urban regions. It is certainly a huge moment of celebration for homebuyers, who have often been innocent victims of powerful real estate developers, bringing an end to years of agony and despair. Having said that, builders have also accepted the new act with open arms. They are hopeful that the act will help to bring more transparency amongst buyers and also earning their trust.
In a historic landmark, two of the Mumbai’s real estate giants – Mayfair Housing and Raunak Group are amongst the first to register their housing projects, Mayfair Vishwaraja and Unnathi Woods respectively, under RERA Act. Gautam Chatterjee, who holds interim charge of the state regulator, said that the registration process will be completed in the next few days. Nayan Shah, CEO Mayfair Housing, was the first to upload his project plans on the MahaRERA website on Monday followed by Rajan Bandelkar of Raunak Group.
Under the RERA Act, it is now mandatory for developers to upload all necessary details about their projects including experience of last five years, development agreement, estimated cost of the project, cost of land, sanctioned plans, flats sold so far etc. along with an escrow bank account number. Builders are also required to submit an affidavit stating that all information provided by them during registration of their project is according to RERA regulations.
Speaking on the occasion, Mr Nayan Shah, CEO Mayfair Housing, said “We are very proud to declare ourselves as the first real estate company in India and Maharashtra to comply with the MAHA RERA regulations and rules for our affordable housing project. RERA is a great initiative by GOI and GOM and we extend our full support. We always were a RERA COMPLIANT COMPANY and we will continue to make all efforts to be better and keep the interest of our Customers above all. We have uploaded all details of our project named Mayfair Vishwaraja located at Titwala (East), behind the Maha Ganapati Mandir. We have already kept on hold all the brochures and other sales related promotions including the project specs until the time the project is registered. We shall release the same only after we have done a thorough review of the same and have them in compliance as per the rules framed under the MAHA RERA ACT”.
Rajan Bandelkar, Director Raunak Group, also remarked, “Raunak Group has always complied with all necessary guidelines and we are happy to follow the RERA guidelines. We have registered one of our projects at Thane, Unnathi Woods – Phase 7 and are also in the process of getting all our other projects registered as well. The registration process was pretty simple and the MahaRERA website is really very user-friendly.”
There are total four wings in the state RERA office, which are Finance, Legal, Technical and IT & Administration. Without registration builders are not allowed to advertise or promote any marketing activity related to selling, booking, sale offers or invite people to purchase plots, flats or building – both residential and commercial. Before application, the project needs to be duly approved by respective authorities like BMC.
Gautam Chatterjee said, “Developers have been warned to restrict themselves from providing inaccurate or false details during registration or else they might be subject to heavy penalties. The new law will bring more positive approach and self-discipline in the industry.”
Mayfair Housing and Raunak Group have led from front to set an example for other real estate developers to follow. Hopefully, RERA Act will now be able to alter the entire real estate scenario in the state and bring relief to both developers and home-buyers.
Under Construction Flat Booking Finds Tax Deduction Under Time Constraints
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.
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.”
Retaining The Sustainability: 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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