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FICCI Issues Guidelines To Improve Second Real Estate Market

Rajbir Achoriwala

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FICCI Issues Guidelines To Improve Second Real Estate Market

FICCI offered some recommendations on improving the level of transparency in the second real estate market.

In collaboration with Grant Thorton and escrow platform Escrowffrr, FICCI has offered some recommendations on improving the transparency in the second real estate market. This has been done after a survey showed that 54% respondents felt financial risk as being the primary concern for them followed by the deal being authentic, and trust on the broker when buying a property.

The secondary real estate market contributes a whopping 72% to the overall transactions in Delhi-NCR in the year 2017 and 2018. On the other hand, it shares 57% in Mumbai. FICCI took the decision after noticing the decline in the growth rate of the secondary real estate market. The government passed regulation, RERA is mainly concerned with the primary market. However, the secondary market lacks any type of regulations.

A number of home buyers prefer to buy re-sale property as it is ready-to-move and removes any risk of delay. The report prepared by FICCI offers the following recommendations;

  • The government should focus on mandatory digitization of property records to reduce legal challenges.
  • The GST for secondary real estate market needs rationalization. The tax rate has been increased from pre-GST 11% to 18% now. The stamp duty also needs to be subsumed in the GST.
  • The government should bring in a single license fee for real estate agents across the entire country to match global standards.
  • The report has suggested a mandatory escrow mechanism to safeguard all parties involved in the sale. This can help bring in transparency and at the same time reduce any litigations.

With these guidelines, FICCI has given the government a new way to take care of the secondary real estate sector. These will also ensure that there is transparency between the home buyers and developers during any transaction.

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