Friday, March 16, 2012

Invest in Booming Real Estate Residential Property in Gurgaon


Residential Project in Gurgaon is a complete solution for the customer looking to create a place called ‘home’. The project is a brand new one with unparalleled enthusiasm and vigor for customer services. The Residential Project Sector 37 C Gurgaon and the locale is wisely chosen for a variety of reasons. It is merely 3 minutes away from the nearest Metro and ten minutes away from the MG Road Metro station. A very lucrative scheme for the home maker and the investor, prices of the project are bound to appreciate in the near future. Thus, one could choose to make a home for him/her here, put up a flat for rent or even sell it with a neat gain in hand. The Residential Apartments in Gurgaon also come in a variety of options giving a person more flexibility. The projects come in 2/3/4/ BHK Residential Apartments with a wide range of irresistible facilities such as lush green gardens, tennis and badminton courts, swimming pools and amphitheatre.
The apartments also have a multi tiered security structure for residential blocks, theme park for children and a gym cum spa for the health freaks. For those working on electronic gadgets, there is 100% power back up at all times and the proximity to the International Airport is an additional plus point. Investing in 2/3/4Bedrooms is not just a wise but also well thought out plan- a home in which one would love to live and live to love. 

Saturday, March 10, 2012

India Imposes New Rules on Property Developers



The Confederation of Real Estate Developers Associations of India (CREDAI) is imposing a new code of conduct on real estate developers in the hopes of instilling more transparency and accountability in the market. 
Experts at CREDAI say middle-class consumers are complaining that developers are taking advantage of them by demanding additional feels upon move-in, delaying taking possession of properties and failing to meet basic development standards. The agency is requiring its 8,000 members voluntarily sign the agreement as part of the self-governing system. The agency reported success in a pilot program after which the new code of conduct is modeled and has invested in advertising to spread awareness to consumers of their new rights.
A new code of conduct has been agreed by the Confederation of Real Estate Developers Associations of India (CREDAI) with the aim of resolving complaints about the house buying process.
The most common complaints are a delay in taking possession of a property, failure to meet commitments, additional money being demanded above the agreed price and ambiguities over sold areas.
‘The primary concern of the consumer is transparency and accountability. Many middle class customers carry the perception that the developers are not answerable and that the only recourse is litigation which is a long drawn and messy process,’ said Pankaj Bajaj, president of CREDAI for the National Capital Region.
CREDAI has over 8,000 members and it requires them to sign a Code of Conduct which is a self governing mechanism requiring them to adhere with prescribed levels of transparency with their customers.
Apart from committing to being transparent with the customers on area calculations, approvals status and specifications, the Code of Conduct requires the developer to declare what compensation will be paid if there are delays delivering a project.
According to Bajaj the aim is to differentiate good developers and fly by night operators in a sector which has been maligned for its opaqueness.
CREDAI has also launched a Consumer Grievance Redressal Forum where any member of the buying public can lodge a complaint against a CREDAI member.

‘We realized that self governance and peer pressure are powerful tools. We have been running a pilot project of this exercise and found that 90% of the complaints against developers got resolved due to the peer pressure from the CREDAI forum on the concerned developer,’ explained Bajaj.
The Forum has a panel of experienced developers and legal experts who decide on the complaint. Complaints can be lodged on the CREDAI website. There is also an advertising campaign to increase awareness of the code.
‘Hopefully, this programme will succeed in aligning the faith of the consumers with the intent of fair and transparent developers. We also hope that as a result of this, the market is going to start discounting non transparent developers where there is no redress forum for complaints,’ added Bajaj. This article was originally published at Property Wire.

Friday, March 2, 2012

Union Budget 2012: NAREDCO recommendations to ministries will help accelerate housing development in India



The real estate industry in India has emerged as one of the most vibrant sectors in the country, providing jobs to millions. The sector plays an important role not only in providing shelter to people, but also in rapid urbanization, which is a key to speeding up economic growth in the country.

But the sector, in the last couple of years, was not given its due in the Union Budget. Real estate developers associations have prepared a number of wish lists to achieve a higher growth in the sector. 
The National Real Estate Development Council (NAREDCO) made a number of recommendations in this regard to the ministry of finance and the ministry of housing and urban poverty alleviation for inclusion in the Union Budget 2012-13, with a view to accelerate housing development in the country.

Declare housing as infrastructure and bring it under Section 80IA of  Income Tax (I-T ) Act: 
 This will enable developers and housing finance institutions to raise funds at low rate of interest from domestic and foreign markets ,which,at the moment,is confined to Indian banks and public equities at a very high rate of interest.This will also incentivize developers by bringing down their income tax liability. Most countries, and the world Bank treat housing as infrastructure.

Special incentive to developers to undertake construction of smaller houses under Section 80IB (10) of IT Act: 
 More than 90% of the shortage in housing is in the category of smaller-size houses (300-1 ,200 sq ft built-up area). Under Section 80IB (10) of I-T Act 1961, there used to be an incentive for 100% deduction of profits derived from the construction of housing projects up to 1,000 sq ft built-up area in Mumbai and Delhi,and up to 1,500 sq ft built-up area at other places.

This was withdrawn through Finance Act 2009.As this was a big incentive for developers to construct smaller-size housing units to suit the requirements of low- and medium-income households, it has been suggested that this provision should be reintroduced and 100% deduction of profits derived from constructing housing units up to 1,200 sq ft built-up area be allowed. This will go a long way in addressing the housing requirement of LIG and MIG categories .

Increase in deduction limit on account of interest payment on home loan from Rs 1.5 lakh to Rs 3 lakh under Section 24 of I-T Act 1961: 
 Deduction of Rs 1.5 lakh, paid as interest on home loan, was introduced through Finance Act 2001,and made effective from April 1, 2002. Before 2001, 100% of interest paid on home loan used to be deducted. Ten years down the line, merely on the basis of cost inflation indexation, Rs 1.5 lakh of 2001 would be close to Rs 3 lakh in 2012.

Also, the indexed cost of Rs 20 lakh property in 2001 would be around Rs 40 lakh in 2012.Thus,merely on the basis of cost indexation,there is a strong case to increase the deduction limit, on account of interest payment on home loan, from Rs 1.5 lakh to Rs 3 lakh. 
   Increase in exemption limit of rental income under Section 24 (a) of I-T Act 1961: 
Supply of rental housing in the market is insignificant because of the low rate of return on high investment in housing property. As everyone can't own houses for various reasons, 40-50 % of the total housing stock ought to be on rentals in the market to meet the housing needs of the low-income group (LIG), who have no capital to buy, and of floating population. 

It has been suggested to increase the deduction limit from 30%, presently available under Section 24 (a),to 50% and levy tax only on 50% of the rental income. This is necessary to incentivize people to build or buy houses for renting purposes and, thus, increase the stock for rental housing. 

Exemption from capital gain if proceed from transfer of a house property is utilized for purchase of one or more houses or invested in capital gain bond under Section 54 of I-T Act 1961:
As per the provisions of Section 54 of I-T Act 1961, investment of capital gain from the sale of a house, if made to purchase one house, is exempt from capital gain tax. If capital gain is more than the cost of the house, tax is payable on the balance. 

It has been suggested that where the entire capital gain is invested in purchase of residential property (one or more) or invested in capital gain bond, it should be exempted from capital gain tax. It will be a big incentive for investment in housing. 

Service tax on residential construction : 
Imposition of 10% service tax on residential construction, when the government is struggling to meet the demand-supply gap in housing, especially in low-income groups, is a deterrent , as it raises the cost by about 3%. Therefore, the service tax on residential construction should be withdrawn . 

Fund for housing: 
This will be helpful in creating a dedicated affordable housing fund, in line with infrastructure fund, exclusively for developing housing of EWS & LIG. Also, it has been suggested that this fund should have access to pension, insurance and provident funds to meet the long-term investment requirement of the housing sector. 

Measures to down-market housing finance to poor sections of society: 
It has also been suggested for developing suitable mechanisms based on interest subsidy, funds pooling and relaxation of mortgage requirements, as also instruments like micro financing, community pooling, agricultural land mortgaging and annual installments, etc,to meet the housing loan need of urban poor and rural households. There is also a suggestion for graded scale of grant, subsidy and loan for social housing to ensure that the lowest strata of poor get the maximum benefit. 
News has been originally published at Economic Times.