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West Bengal: Real Estate Regulation Act Gives a New Ray Of Hope To Many

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West Bengal: Real Estate Regulation Act

“It is a very important legislation. For a long time we have been hearing about a lot of projects which are not getting completed.” says a buyer.

High hopes are pinned on Real Estate Regulation Act (RERA) as it is yet to be implemented in West Bengal. However, several consumers, who have been facing problems in getting the possession of their property feel that they will soon see better opportunities.

Anshu Ruia (34) had put in his hard-earned money into DLF Galleria in the eastern part of Kolkata in 2008. The building was ready by 2013 and the company had asked him to sign an agreement stating a no claim police and wait for agreement.

However, Anshu refused to sign the agreement making it all the more difficult for him to acquire the property. He had paid all dues amounting to around Rs 1 crore for a commercial property that he brought for personal use. However, Anshu is yet to inhabit his property.

“I had booked this property in 2008 and in 2013 I paid the entire money including stamp duty and registration charges. But despite that they did not give me possession of my property,” he said. He added that he has been making frequent trips to get possession and the developer is taking advantage of his circumstances. “Such developers take the advantage of their might and our hard-earned money is lost. We still don’t know how to get justice,” he said.

Anshu even approached the consumer court but to no avail. The builders and developers of West Bengal have welcomed the Parliament’s move.

“It is a very important legislation. For a long time we have been hearing about a lot of projects which are not getting completed. A lot of buyers are facing difficulties in getting possession and lack of transparency in many documentations. This is intended to address the whole issue. Developers will have to be more transparent and more upfront with their proposals and the buyers will also have the rights to certain grievance management or grievance redressal mechanisms in case certain things don’t happen,” said Harshvardhan Neotia, Chairman of Ambuja Neotia Group.

“Earlier, there was a feeling that it would be difficult when you have already built something on the basis of a super built-up area, how do you now talk about carpet area? Or for that matter how do you now put the money into an account act. But obviously that needs to be done and it is pretty understandable that buyers of those under-construction units also have to be given some protection. They have given some time for the builders to be able to come up and be able to comply with that. It is certainly not easy, but I am sure it is possible. The impact of the RERA will obviously be a positive one. The serious builders of the developer community will experience a good profit and the casual people will face difficulties. It will also be difficult for the people who failed to maintain,” Neotia added.

But there are political layers also to dash the hopes by delaying the implementation in the state. Housing, Environment Minister of West Bengal and Mayor of Kolkata Municipal Corporation Sovan Chatterjee explains the reasons, “It is not an easy job to implement the RERA in West Bengal because of the situation and circumstances of this place, which is changing very rapidly. There are certain complications if this act needs to be implemented worldwide. We are not overruling the RERA system. We have taken their suggestions and have also discussed this issue, where various people were invited who were interested for the implementation of RERA.”

“It has also been discussed whether this act will be accommodated within the state law or the national law and we are still to decide and get into a conclusion. There are certain procedures which are inter-related which makes the act a bit hard to implement at this point. I am a part of the municipal board  for thirty three years and I have experienced a lot which gives me a view that how difficult it is to implement this act, but we are definitely working on the process so that the act gets implemented soon. There is also a lot of legal procedures which needs to be followed and many cooperative and packaging systems at the same time. Unless the whole procedure gets sorted, we cannot conclude the whole fact. We are looking forward to implement the act but will it follow the RERA system or the RERA spirit of the system we don’t know. We even need to look for the criteria of the West Bengal government and how does it match there,” said Chatterjee.

Despite the change, people like Anshu Ruia who have spent more than the principal amount on fighting litigations continuing to wait. Ruia has said that moves like RERA have come as a ray of hope.

“I am looking forward to RERA because I have gone through the act which was passed and is really beneficial for consumers specially when there loopholes in consumer protection act which this developer took  advantage of but they are very well covered in RERA,” Anshu said.

Source: India Today

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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