TREND MILL
Looking Skywards!
As buying a home in bursting-at-its-seams Ludhiana becomes a challenge, residents explore the vertical realm
Kanchan Vasdev

WITH every inch of land in Ludhiana practically having been used up by fast-mushrooming colonies, finding a house to buy in the state’s financial capital is no mean feat. Having run out of choices, Ludhianvis are now pushing vertical limits to build the house of their dreams and apartments are the obvious choice.

Overexploitation of land to build houses has created dearth of space for constructing houses within municipal limits of the city. Despite being ready with cash, buyers are unable to get land for constructing a house in the city. With the need for vertical expansion rising, many private and government agencies have started construction of apartments in the city. Most of these projects are under construction and at the same time the existing flats are now finding takers.

Ludhianvis did not have a taste of flats till some years ago. They were used to living in independent houses. In 1985, the Improvement Trust developed a colony on Pakhowal Road and offered apartments in a covered area of 170 to 200 square yards. Though the area soon became the heart of city, most apartments lay abandoned as most owners simply waited for prices to go up and strike a good deal. But no more. Many private companies came up with housing projects offering having luxury, high-income and middle income group flats.

Within a year and a half, many projects were announced. Besides several schemes announced by Improvement Trust and Housing Board at Pakhowal Road, Sant Ishar Singh Nagar, Rishi Nagar, BRS Nagar, Chotti Habowal and Shaheed Bhagat Singh Nagar, several private players too jumped onto the space saver apartments bandwagon.

Priced between Rs 25 lakh and Rs 1.25 crore, these apartments are catching the fancy of not only corporate sector employees, who get transferred to various parts of the country and settle for an apartment, but also many local residents who have opted for luxury apartments like Crosswinds and Basera Homes.

A real estate expert said the Golf Link Apartments coming up on Humbran Road, Acme Apartments on Chandigarh Road, Eldeco Apartments, Omaxe on Pakhowal Road, Crosswinds near Lodhi Club, Basera Homes and Rajgarh near South city have recorded 50 to 80 per cent sales. “Still, the response is not very encouraging and recession could be one of the reasons.

Ludhianvis often compare price of constructing a house on a piece of land and an apartment. If there is a wide gap, they would choose an apartment. Otherwise, they would opt for constructing a house,” says Parminder Singh, a real estate expert. “It is only logical to grow vertically as agricultural land should be spared but it will take a long tome for residents to adopt the culture. Builders are ready and are offering apartments on a platter, but residents are yet to make up their minds.”

On the contrary, a Ludhiana-based businessman said that he had booked a luxury home for Rs 1.25 crore. “I know I can construct a much better house in the outskirts with this price but then it is better to stay in safer surroundings. The children will have their schools nearby and I would be in the city. Why not?” he asks.

Not only big builders but also small colonisers are trying their hand at sell apartments. A similar project has come up in Haibowal area where apartments measuring 150 square yards and priced at Rs 26 lakh are up available. “Otherwise where can you buy a house worth living in for Rs 25 lakh? So people are going in for the same,” says Vimal Kumar, another real estate agent. 

Housing sector demand picking up 

DEMAND for residential projects in major cities is picking up on lower home loan rates, property price cuts by developers and job market recovery, a study by Religare Capital Markets Ltd said. Indian real estate saw demand for housing collapse from 2008 amid a global credit crunch and buyers fearing job losses.

"Now that property prices have climbed down and the risk of job layoffs has diminished, the service class is likely to participate actively in property absorption, leading to a strong recovery in residential demand," Suman Memani, associate vice-president, Religare Capital Markets, said while releasing the report.

Correction of home loan rates from levels of 13 percent in early 2008 to around 8 percent now has also helped spur demand, he said. But prices in the residential segment, that make up about 70 percent of the real estate market in India, may only move up in 2 months, Memani said. "Rising demand for residential projects may spruce up prices only after October."

Religare expects residential prices in the premium and luxury space to rise 10-15 per cent as valuations have bottomed out in a few locations with property registrations in cities like Mumbai and Pune rising about 20-22 per cent in April-June quarter over January-March quarter, Memani said.

Indian real estate developers like Ackruti City Ltd, Anant Raj Industries Ltd, Omaxe, Parsvnath Developers and Sobha Developers, saw a sales slump following the economic downturn. Their margins were also squeezed as many launched cheaper housing to boost unit sales.

Fund raising through the institutional placements route would help realty firms restructure their balance sheet and many have focussed on execution of projects rather than creating a land bank, which is positive for the industry, Amitabh Chakraborty, president - equity at Religare Capital Markets, said. — Reuters

Commercial still struggling

HOWEVER, the commercial sector would see vacancy rates rising as much as 25 per cent in 2009/10 with oversupply of about 30 million square feet of space in seven cities and IT companies showing slower employee growth of 2.5 per cent, Memani said. Although rental values have started correcting from February 2008, capital values of the commercial properties have not eroded so far, he said. "We expect some correction in the commercial property valuations with deals going through post-October," Memani said.

GREEN HOUSE
Sweet fruits of labour
If procuring plants of fruit trees, check for parentage and performance, even if it means driving to a far away nursery, writes Satish Narula

The season for planting is on and I am assuming you must be busy procuring plants. Is it your first buy or had you purchased a plant last year too and it did not survive? There are reasons for failure and also some initial precautions for success. Are you aware of these? Let us discuss these for some fruit plants.

Though there has been an increase in demand for plants, there is no matching supply. Above all, there are some targets to meet. Somewhere down the line quality is compromised. Be very particular at the time of procuring fruit plants. First things first – do not buy plants from a local nursery unless it is registered and the source of plant is known.

Quality fruit plants with known parentage and performance are best bought from recognised or government sources. It is advisable to wait a year if you could not get a quality plant due to any reason. One more thing, don’t let distance come in the way of getting the best plant.

Never-ever think, ‘Oh, should I go so far for one plant?’ If you still are thinking, the answer is: Yes, you must, as the fruit plant comes into bearing three to four year after planting and at that time if you get a few fruits of poor quality, it will be too late to repent!

Assuming that you did buy the plant from a reliable source, then why did it die? The rearing of a young plant needs the same attention as that of a child. Plants should be planted in a pre-dug and filled pit. While planting, care should be taken to remove as much soil from the pit as is the size of the earth ball.

Any polybag or straw packing should be removed and plant should be placed in the centre of the pit as deep as it came from the nursery. After adding soil all around the plant, thoroughly press it to eliminate air pockets around the plant. Immediately after planting, water copiously.

It is still safe to add chlorpyriphos with the first watering. For this, dilute the chemical in the ratio of one millilitre to a litre of water. This will keep white ants at bay in the initial few months. Till the plant gets established, do not let the soil dry out. Keep it moist but at the same time make sure there is no stagnation and roots get breathing space.

Since plants are planted in recently dug and filled pits, sometimes soil settles down and the plant gets tilted to one side. Be very careful at this stage. If allowed to stay like that, the plant will grow lopsided growth and may snap under its own weight at the time of fruiting.

To correct the fault, use a stake on the opposite side of the tilt and draw the plant to the centre by using a piece of twine that is revolved round the plant only once. This is to prevent the tying material from cutting into the delicate plant stem.

One of most important operations after planting is to keep an eye on all growing points of the plant. Any drying part should immediately be removed. The drying out could be due to initial transplant shock. Tips may start drying back due to dieback disease, too.

Allowed to grow unchecked, the drying will travel downwards killing the entire branch. Remove the dead portion along with a bit of healthy part and spray the plant with bavistin, dissolved at one gram to a litre of water. Also keep an eye for any insect attack and take precautionary measures.

This column appears fortnightly. The writer is a senior horticulturist at PAU and can be reached at satishnarula@yahoo.co.in

Fortnightly Alert

When you go to buy a plant, do not be lured by its mere size, especially those brought from private nurseries of Uttar Pradesh. You may end up with spurious plants. In most cases, the plants are raised in clay soil and these are extracted from the soil with a very small earth ball. Consequently, most feeder roots are cut.

Such plants may be four feet or bigger but the earth ball is hardly 250 gram or so. When these are planted in soil, they cannot cope with the aboveground plant requirements due to absence of an adequately developed root at the base. The plant may even take two to three years to die. When you extract the dead plant from soil, the same earth ball will come out with it!

TAX TIPS
For urban property, original sale deed proves ownership
S.C. Vasudeva

Q. I have inherited a house built by my father on 24 marla plot within the municipal limits by virtue of his registered will. The original sale deed clearly shows that the plot measures 24 marlas. But when I applied for mutation of the property in question in my name, I was told that only 15 marlas are in my father’s name. The house, which had been in my father’s possession and is now in mine, measures 24 marlas. It is a very old house built about 60 years ago. My query: what would be status of this house at the time of its sale? The sale deed would be for 15 or 24 marlas? Can there be legal/ownership complications for my heirs and descendants or for those of the purchaser? My legal advisor says that for urban properties the main document is the original sale deed or actual possession. The land records are irrelevant. Am I being misguided unknowingly? — Amarjit Lal Jaggi

A. Your legal advisor has correctly suggested that in case of urban property the main document for proving ownership is the original sale deed. The status of the house property would, thus, be based on the facts given in the original sale deed relating to the plot on which your father built a house. The legal ownership in this respect would, therefore, be based on the above-said document.

CGT liability depends on land location

Q. We are three brothers and have inherited ancestral agricultural land measuring approximately two acres in Tehsil Jalandhar. We want to sell this property.  The sale proceed of this is likely to be Rs 20 lakh. The above amount will be equally distributed among the brothers. We need to know the tax liability on this amount in case it is taxable. How can we save tax on this? — Manjit Singh

A. The facts in the query are not complete for the purpose of computing capital gains tax liability. It is essential to know the following for the purpose of computing such liability:

n Whether the agricultural land is situated within the municipal limits of Jalandhar?

n If the same is outside municipal limits, whether the land is situated upto a specified distance from municipal limits from all directions?

n Cost of agricultural land proposed to be sold and date of its purchase. In case the land was purchased prior to 01.04.1984, its fair market value as on that date would be required which can be substituted for the cost. It may be added that in case the agricultural land is outside the municipal limits as also beyond the distance specified by the notification issued by the government, capital gain arising on the sale of such land would not be exigible to tax.

For senior citizens, Rs 2.25 lakh upper tax-free limit 

Q. My mother, who is 88, has sold a piece of land that was purchased more than 25 years back for Rs 3 lakh. The sale proceeds have been received in cash. She has no PAN and has not been a tax payee throughout her life. How should she invest her sale proceeds? Is there any tax liability for her?  — Ashok Kumar

A. The tax liability in respect of the capital gain arising on the sale of land would depend on the cost of acquisition thereof. The amount paid for acquiring the plot 25 years back has not been indicated in the query. It is, therefore, not possible to work out the amount of capital gain and the tax, if any leviable thereon.

It may be added that your mother being a senior citizen is not liable to pay tax in case the capital gain arising from the sale of the plot of land is not more than Rs 2.25 lakh, this being the maximum amount upto which tax is not payable by a senior citizen.

The said limit is applicable for assessment year 2009-10. The capital gain, if any arising on the sale of plot, should be utilised for acquiring capital gain tax saving bonds. This will enable her to save tax leviable on capital gains, if any. The balance amount, if any can be deposited in bank or under any other scheme which gets her the best possible rate of interest.

CGT depends on cost inflation index

Q. My wife bought a HUDA residential plot for Rs 3,47,625 in May 1998 and sold it for Rs 6 lakh in May 2009. What will be total tax imposed?  — Rajesh Sharma

A. The tax liability in respect of the capital gain arising on the sale of residential plot would work out at Rs 23,596 on the basis of cost inflation index notified for the financial year 2008-09. 

This is because such index has not been notified for financial year 2009-10. The tax payable for assessment year 2009-10 thereon @ 20% plus education cess of 3% would work out at Rs 4,861.

The above capital gain may reduce on the basis of the cost inflation index to be notified for the financial year 2009-2010.

Buying A plot You can stand witness

Q. My mother wants to purchase a plot in Punjab. The first witness in Punjab is the lambardar but can I stand as the second witness? — Ashutosh

A. The sale deed in favour of your mother in respect of a property being purchased by her will be executed by the seller. At the time of registration of such a sale deed, both the seller and purchaser have to be present before the sub-registrar.

The signatures of the purchaser can be attested by anyone, provided his identity is proved to the satisfaction of the sub-registrar.

In my opinion, there should not be any difficulty in your being witness as to the attestation of signatures of your mother while effecting the registration of the sale deed in her favour.