Rather than avoiding site visits or the purchase of resale homes during monsoons, buyers can use this season to evaluate the pros and cons of a home’s location and construction quality and strike a good deal.
During the monsoon season, a real estate property and its surrounding areas may be quite different from how it is during the rest of the year. Consequently, this season offers prospective home buyers, with the opportunity to glean valuable insights on their intended purchase.
Infrastructure and amenities in the area
Real estate experts advise that home seekers should visit the construction site more than once, before making a final decision. “Visiting a site in the monsoons when the traffic is at its worst, in most places, will provide insights on the waterlogging situation, as well as travel and access to the area,” explains Shveta Jain, managing director – residential services, Cushman & Wakefield. Monsoons are an apt time for buyers to go house hunting in a country like India and assess the condition of the building and the area around it, says Manju Yagnik, vice-chairperson, Nahar Group. “During monsoons, getting transportation from your home to the nearest railway station or bus depot is a nightmare in cities like Mumbai and this aspect cannot be overlooked during such site visits,” Yagnik points out.
Monsoon is the best period to check the overall quality of construction of a house. Issues like seepage in the ceiling and near the washrooms are quite common during rains. “Heavy rain will reveal the construction flaws, like seepages/leakages, quality of plumbing and drainage, waterlogging, traffic in the neighborhood, etc. It is thus, the best period to visit the site and should not be avoided,” insists Dr Anil Jindal, chairman, SRS Group.
While ascertaining construction quality may not always be possible in an under-construction property, the rainy season is the perfect time to check the quality of a resale house. Ramkumar Mahadevan, a resident of Navi Mumbai, bought his property which was a resale house, during monsoons. “One of the factors that I considered while finalizing a top-floor flat, was the possibility of leakage issues. This is particularly important in a resale property. I went ahead with the deal, only when I felt assured that the flat could withstand the elements of nature. The monsoon actually puts any building, even if it is a reputed builder with the high quality of construction, to the test,” he shared.
Best time to negotiate
Issues like leakages during the monsoons can also be used by buyers to make the deal work in their favor. “If a buyer likes a particular property that has an issue of water-logging in and around the building or a leakage problem, then, the prospective buyer has a chance to bargain further and get a fairly good deal and get it solved. This may not be possible in dry weather conditions,” says Yagnik.
As the demand for properties tends to dip in the monsoon season, it is an ideal time for discounts. “The monsoon is generally regarded as a lean period for the realty sector. However, it is a good time for home buyers, especially for those looking at resale properties. This is the time when demand is less and sellers are willing to negotiate on lowering the price for serious buyers,” explains Yagnik. Moreover, with people preferring to invest in real estate during the festival season which begins in September-October, builders offer attractive discounts around monsoon to boost their sales for that quarter.
Advantages of selecting a property in the monsoons:
Buyers can gauge whether the property has problems pertaining to seepage, leakage from the terrace, drainage issues leading to stagnation of dirty water, etc.
For a resale home, a final inspection in this season can reveal construction quality and how the house has been maintained.
Low lying areas are prone to flooding, leading to traffic jams and transportation woes. The extent of this problem can be best judged in the monsoon season.
In cases, where flaws in the project become evident during the rainy season, buyers can bargain and also ask the developer to mend the same.
As it is a lean period, vis-à-vis sales, sellers may be willing to negotiate on the price.
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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