The Tribune, Chandigarh, India

	state of realty: uttarakhand Fair weather in hill state S.M.A Kazmi Even though it is the arithmetic of demand and supply that fuels the growth of the real estate sector, a conducive political environment has always been considered necessary for it to bloom and zoom. No surprise then that the property market had caught a virtual chill before the Assembly polls in five states recently with the realtors as well as investors adopting a wait-and-watch policy. But now as the new governments have taken over and the clouds of uncertainty have lifted, it is fair weather time for the real estate sector in these states be it Uttar Pradesh, Punjab or Uttarakhand. The realty business that had nosedived during the past five years of BJP rule in Uttarakhand is now likely to soar with the Congress-led coalition government coming to power in the state. After witnessing a real estate boom in the initial seven years after the formation of the state, the business had taken a solid beating in the past five years. With Congress Chief Minister Vijay Bahguna at the helm of affairs now, realtors are optimistic that their business would get a boost. The investors and end users are also hopeful of getting a better deal now. The recent 5-10 per cent increase in the circle rates of properties in Dehradun valley by the district administration is also expected to give a boost to the stagnant market and lead to appreciation of land prices. The circle rate on Rajpur Road is now Rs 49,000 per sq yd, and Rs 8,500 for Sahastradhara road. "We are hopeful that the growth-oriented policies of the new Congress government will revive the real estate business in the state," said Inder Singh, a Dehradun-based builder, whose shopping mall project on the East Canal road in the heart of the city is likely to be operational by July this year. Crippling policies Though there were many factors that had led to a slowdown in the realty sector in the state over the past few years, experts feel that the lack of a cohesive urban development policy, and above all, the negative message that went out during the BJP rule had hit real estate business in the state. The tough time for this sector started in the state much before the global slowdown hit the property market in other parts of the country after 2007. The amendments in land laws, high stamp duty and circle rates brought by the BJP government at that time had virtually put a dampener on the property business in the hill state. Although there has been steady rise in the revenue from stamp duty and registries, property rates remained stagnant. Buyers felt the squeeze when the Chief Minister Khanduri brought an amendment in land laws in 2007-08 that restricted outsiders from buying more than 250 sq m of agriculture land. The move sent out such a negative message that outside investment evaporated despite the fact that the law was only meant to protect agriculture land and did not affect urban properties. This move brought the thriving real estate business to a near halt. In 2009, the government implemented the master plan of Dehradun and affected a 1 per cent cut in stamp duty rates in a bid to boost the real estate business in the state. But this move also failed to improve the situation. In 2010, the then Chief Minister Ramesh Pokhriyal Nishank reduced the stamp duty to 4 per cent in order to spur growth and announced other sops that would boost the real estate business. But it did not help either. The state government did try to take some remedial measures by raising the permissible height of the housing projects from 15 metres to 21 metres. But this, too, did not elicit the expected response from the builders and investors. As a result several projects were either shelved or went in limbo giving jitters to investors and leaving the end users high and dry. Many of the residential projects that were started in the Doon valley during the Congress rule between 2002-2007 are still hanging fire. Many of these, particularly on the Sahastradhara road, have either been abandoned or remain incomplete as original builders found it hard to complete their projects. The absence of any cohesive policy has also added to the problems of the real estate developers. They rue the absence of single-window system to get clearances and proper guidance about the different rules and regulations in the state. The master plan for Dehradun has only created confusion, said a builder whose project in the city is in limbo. The situation is no different in other cities in the state like Hardwar, Haldwani and Nainital. But experts are hoping for better times now. "We are all hopeful that like the previous Tewari-led Congress government, Chief Minister Vijay Bahuguna would also take steps to improve the situation for real estate. "There is need to allow the outsiders to buy land in the state and improve infrastructure so that the market sentiment improves," said Qamar Siddiqui, a real estate builder. “But with buyer inquiries increasing in the past few weeks things seem to be getting rosy", says an optimistic local property dealer Ranjit Singh Aswal. Victims of policy gaffe: Many new commercial and residential projects in Dehradun had elicited poor response from buyers and investors as the real estate sector in the state suffered due to unfavourable government policies
	Office space demand dips The absorption of office spaces declined by 14 per cent in seven major cities of India in the first three months of the 2012 calendar year compared with the previous quarter, according to property consultant DTZ. The office rentals across the key prime markets remained largely unchanged as the overall market sentiments were subdued, it said. The absorption during the January-March quarter stood at 7.22 million sq ft against 8.42 million sq ft in the previous quarter, DTZ said. "Cautious sentiments prevailed in the market as domestic macro economic indicators remained uninspiring while contrary to expectations, no drop in benchmark interest rates were effected," the property consultant said in a statement. During the quarter, DTZ said the demand was the highest in Bengaluru at 3.6 million sq ft, followed by Mumbai at 1.2 million sq ft. It said no major change was seen in the composition of demand with IT firms accounting for majority of the take-up across the country. "Till such time as the interest rates are not brought down, we do not expect sentiments to improve. The sector needs at least a 100 basis points cut in interest by the end of the year to bring back the investors and serious buyers. “The cumulative take-up falling by 14 per cent quarter-on-quarter is a manifestation of the subdued mood of the occupiers,” DTZ India CEO Anshul Jain said. The occupiers are holding on to their decisions to take up commercial A grade office space, he said. “We expect a turnaround sometime around October 2012. Rentals will remain stable or increase marginally till then,” Jain said. The report suggested that the cumulative vacancy across the seven key cities fell further to 22 per cent by the end of Q1, primarily because the demand for space completely offset the new supply that got ready for fitouts, since some of the new space had already been pre-leased. The project completions in Q1 grew by 30 per cent quarter-on-quarter as pace of construction picked up in a few key markets such as Mumbai, Bengaluru and Chennai, where most of the demand was concentrated in the past year. — PTI
	Green house Let the colours of nature cascade Jazz up the empty vertical spaces in your home with the magical touch of hanging baskets Maj Gen C.S. Bewli Floral display is at its best when it is created in a hanging basket and viewed at an eye level height. A well-balanced and artistically prepared basket always attracts attention no matter where it is hung. Hanging baskets with flowering plants are the sure shot and easy way to add colour and flair to the garden outdoors as well as to complement the decor of a balcony or a terrace garden. These provide an additional design element to pep up the over all look of any area. As the name suggests hanging baskets are hung in a porch, balcony, staircase, under a tree or at any other unused suitable place. To meet this requirement, plants with trailing cultural habits are preferred because of their ability to display flowers and foliage to the best advantage, covering more floral area than a normal potted plant. Not only this, any shortcoming in the container is also camouflaged by such plants. There are numerous species of plants which do well in hanging baskets in winter as well summer months. Depending upon an individual's taste there is a wide choice in the selection of flowering plants which can be grouped together to make up a magnificent display. The display can be made of one or more than one species. A hanging basket is a suspended container firmly secured for growing decorative plants, which can attractively fill empty vertical spaces to add colour. The baskets are made of wire-mesh either galvanised or plastic coated, wood, bamboo, clay, ceramics, terracotta or plastic with drainage holes. These are available in a wide range of colours, style and sizes. Choosing a basket The choice of basket depends upon the choice of plants and its location: n Wire, wooden or bamboo baskets are not meant for direct planting, but are usually lined with sphagnum moss, coconut fibre or any other suitable material to keep the soil intact. Such baskets are for outdoor use and tend to dry up fast. These thus need more frequent watering. The advantage in this is that planting can be done from the sides as well giving more floral area to add to the beauty of the basket. n Ceramic and plastic baskets come in different colours and are suitable for both indoors and outdoors while giving contrasting or matching effect to the surroundings. These don't need to be watered very often and can also be "positioned" on a flat surface. The "green thumbs" can also experiment with hanging baskets by planting cacti and succulents in these rather than seasonal flowering plants. These baskets last long as these slow-growing plants can remain in the baskets for years. Once the plants are set, they need very little maintenance and attention. These look best in ceramic or terracotta planters with normal cactus compost. Zygocactus (Christmas cactus) with white, pink, purple and red flowers; Aporocactus flagelliformis with crimson flowers, epiphytic cacti in different hues; Chamaecereus sylvestri with showy red flowers and sedum morganianum, are some of the suitable species for such displays. Summer and winter flowers look best in wire-mesh baskets lined with sphagnum moss. These can also be created in wooden, plastic, ceramics or terracotta planters by placing taller plants at the top and trailing plants around the edge of the basket to give a cascading effect. Pansies, petunias, verbenas and nasturtium in different hues are suitable for winter baskets, where as trailing geraniums and begonias are for summer baskets. Chlorophytum and some ferns also do very well in hanging baskets. Other species may also be tried. Short cut If there is shortage of time and you want to create a hanging basket display then the easiest way is to get reasonably sized 4-5 plastic pots with young flowering plants of your choice. Place these plants with the pots in any hanging basket of your choice. However, care should be taken to ensure that the plants are of trailing habit and the basket is aesthetically camouflaged as far as pots are concerned. Creating a hanging basket in a wire-mesh planter n Select a suitable sized basket which matches with the decor, ensuring its harmony with the plants and their flowers. n A wire-mesh basket should be generously lined halfway up with a 5 cm thick layer of a little bit compressed moist sphagnum moss. n Fill the basket halfway with moist compost comprising one part coarse sand, one part garden loam, two parts mature dung manure alongwith some NPK fertilizer and bone meal. n Take out 5-6 trailing young plants of your choice in respect of flower colour and foliage from the pots with their root balls intact and insert each plant gently in the basket at compost level with roots inside the basket and foliage outside. Fill moist compost around the root balls. n Complete the balance of 5 cm thick sphagnum moss lining around the basket and add moist compost leaving 5 cm from top. n Take out another lot of 5-6 chosen plants from the pots and place them in a cascading fashion on the sides of the basket. n At the centre of the basket on top place 3-4 plants, not necessary of trailing habit and further add compost as a finishing touch. n Gently spray the basket and hang it where it gets some morning or evening sun. After about a week gradually shift the basket to a brighter place for sun-loving plants. — The writer is President of the National Cactus and Succulent Society of India
	REALTY GUIDE Best bargain in 45 lakh B K Sanghi ... Q. I want to buy an independent floor/apartment either in Mohali, Zirakpur or Chandigarh. Which would the best area/colony to invest money to get good returns in future? My investment limit is about Rs 45 lakh. The area of property could be anything from 450 sq ft to 1,800 sq ft. — harshit goyal A. With the investment limit of Rs 45 lakh that you have, Zirakpur seems to be the most preferable destination for you. Its strategic location at the entrance of Chandigarh, Panchkula and the Mohali district gives it a distinct advantage as compared to other locations in the tricity area. While buying a property always look for the project that has all the basic amenities and better connectivity. As several major developers have projects in Zirakpur, you have a good choice here. The housing projects on the Zirakpur-Patiala and Zirakpur-Ambala roads have modern amenities and are good for investment purposes. Apart from this, Peer Mushalla, which is right next to Sector 20 in Panchkula, is also a good option in the price band mentioned by you. The upcoming projects here offer good facilities, and connectivity of the area is also good. If you have ready cash, then it will be best to bargain with the developer as cash down payment can really net you a better property at affordable price. email your queries to realestate@tribunemail.com
	Tax tips Can I utilise capital gain to buy commercial property S. C. Vasudeva email your queries to sc@scvasudeva.com ... Q. Thanks for your reply but please clarify my doubts raised in my query earlier. The capital gain has been treated as short-term gain which is not correct. The fact is that plot was allotted in April 2004, and the possession was taken in October 2007 and was sold in January 2012. Kindly clarify my points as it was long-term capital gain: n Will the amount of capital gain that I have earned from the sale of this plot be Rs 45 lakh or it will be minus the amount spent by me on this plot? n In how much period do I have to utilise the full amount of capital gain on the acquisition of new property? n Whether or not, I can utilise the gain on the purchase of plot and commercial property also. n Is it necessary to utilise this gain during the financial year 2011-2012 or can it be utilised in 2012-2013? — Rajiv Sharma A. Your queries are replied hereunder: n Your query did not indicate that the possession was taken in 2007. As Conveyance Deed had been executed in December, 2011, it was assumed that the possession had been taken along with execution of the Conveyance Deed. The query now sent by you also does not give the details of installments paid for the period between April, 2004 and November, 2011 so as to compute the indexed cost of the installments so paid. The correct amount of long-term capital gain can be computed only after the aforesaid information is available. n The amount of capital gain would be computed after deducting such indexed cost from the sale price of Rs 45,00,000. n The amount of net consideration realised on the sale of the plot should be invested for the purchase of a residential house within one year before or two years after the date of sale of the plot. In case you desire to construct a residential house, such net consideration should be utilised for the construction of a residential house within a period of three years after the date of the sale. So much of the amount as has not been utilised for the purchase or construction of a residential house, before the due date of filing the tax return for the year in which the amount of capital gain arose, is required to be deposited in a bank account under the capital gain scheme. The amount so deposited can be utilised for the purchase or construction of a residential house within the period specified hereinabove. n You would not be entitled to exemption from the taxability of the amount of capital gain in case you desire to purchase a commercial property by utilising the amount of capital gain or the amount of net consideration. n As indicated above, the net consideration has to be utilised for the purchase of a residential house within the period specified hereinabove. You also have option to utilise the amount of capital gain towards the purchase of capital gain tax-saving bonds within six months of the date of sale of the plot. You can purchase such bonds to the extent of Rs 50 lakh in a financial year within the aforesaid period of six months. No change in base year for cost indexation Q.I was allotted a plot (residential) by MIG Housing Society in 1988 at V. Methapur, Jal. At that time there was no habitation in that area. I paid Rs 30,000 for a 20 marla plot. Five marlas, which were under high tension wires, were given for free. As the plot was uneven, I got it filled at a cost of Rs 20,000. Thereafter, I erected a gate and engaged a watchman at a monthly salary of Rs 2000 to take care of the plot. I must have spent almost Rs 2 lakh over a period of 23 years on the plot. Recently MC Jal notified that no construction would be allowed under high tension electricity cables. I sold the plot for Rs 12 lakh and the society has now allotted it to someone else. Please let me know the indexed cost and the capital gain tax that will have to be paid by me. I am also enclosing a press clipping (dated September 18, 2010) mentioning that the base year for giving benefit of cost index is being changed to April 1, 2000, and, therefore, an asset bought between April 1981 and April 2000, would not be taxed. — C. Singh A.The amount to be considered towards the cost of the plot would be Rs 30,000 paid by you for the purchase of the plot and Rs 20,000 incurred for filling the uneven plot. It is assumed that the amount paid for filling was spent in the financial year 1988-89. On the said basis, the indexed cost of plot would work out at Rs 2,43,789. There is a long-term capital gain of Rs 9,56,211. You will be liable to pay tax @20 per cent plus education cess of 3 per cent thereon. The amount of Rs 2,00,000 spent on maintaining the plot would not be added to the cost of the plot as it cannot be counted as being spent for making any improvement to the plot. The press clipping sent by you with regard to the change of the base year from April 1, 1981 to April 1, 2000, is in accordance with the provisions of Direct Taxes Code. Direct Taxes Code is yet to be passed by the Parliament and has not been implemented so far. At present, the provisions of Income-Tax Act 1961, are in force which provide that the base year for computing long-term capital gain should be April 1, 1981. Tax liability on sale of flat? Q. My son purchased a flat in 2002 in installments. He paid all the installments up to 2004. The total cost of flat was about Rs 10.50 lakh. But unfortunately my son expired in a road accident in 2008 and subsequently the flat was transferred in the name of his mother. We sold the flat for Rs 25 lakh in 2011 and purchased a new flat in the same month for Rs 35 lakh after taking a loan of Rs 20 lakh from a bank. Please let me know if there is any tax liability. — M. Kumar A.The facts given in the query do not indicate that the installments were paid in full by March 31, 2004 or by March 31, 2005. Further, it has also not been indicated in the query the manner in which the flat devolved on the mother after the death of her son. The reply to your query, therefore, is based on the presumption that the installments were paid within the financial year 2004-05 and that the flat was inherited by the mother on the death of her son by virtue of a Will. On the basis of the above presumption, the indexed cost of the flat would work out at Rs 17,17,188. The amount of capital gain would thus be Rs 7,82,812. In view of the entire amount of capital gain, having been utilised for the purchase of a residential house within one month of the sale of the flat, there should not be any tax liability in respect of capital gain arising on the sale of the flat. Successors can contest property division Q. After the death of our father in 1993, the family members distributed the joint properties of their father by arriving at a family compromise, and thereafter got it decreed through Court in 1995. On the basis of that decree the said properties were got transferred by the legal owners decided by the court in their names in the records of the Municipal Corporation as well as the revenue department. Thereafter, some members raised construction while the others disposed off their share. All the taxes/dues etc. are being paid regularly by the legal owners out of their own sources. My query is whether: The family members or their successors (grandsons/daughters) who had sold off their share raise an objection against the share granted to any other family member by the court. What further precautionary steps should be taken by the members who have not sold off their share to avoid further harassment? — krishan lal gaba A. You cannot stop the grandsons/daughters of such family members who were not able to manage their share of property properly from contesting the validity of the family arrangement entered into by family members for which a decree was obtained from the Court in the year 1995. A final decision in this regard will have to be made by the Court of competent jurisdiction as to the right of such parties to contest the validity of the family arrangement and the Court decree passed subsequent to such arrangement. It may not be possible to take any pre-emptive measures in this regard. However, this being a civil matter, I would advise you to consult a lawyer for taking proper advice on the issues raised by you.
	Vaastu wisdom What is the correct place to keep money? madan gupta spatu ... Q. Can you throw some light on the right location to keep money, TV, telephones, aquarium etc? — Nandini A. Cash boxes can be located in the room towards the north (treasury). But if the box is heavy (such as a safe, heavy almirah) then it should be kept in the southwest corner and the door of the almirah should open towards the north. TVs and computers should ideally be placed in the south-east corner of the living room or study room. They should not be placed in the north-east or south-west corners. Telephones can be placed in the south-east or north west corner but not in the south-west or north-east. An aquarium with nine gold fish and one black fish placed in the north-east corner/portion of the house or factory is very good. email your queries to vaastu @tribunemail.com
	Indians top buyers of Dubai property Indians have topped the list of first-time property buyers in Dubai last year, having bought properties worth 2.1 billion dirhams (Rs 292 crore), Dubai Land Department data has revealed. “The Indians topped the list of new investors in Dubai properties and conducted 927 transactions worth 2.1 billion dirhams. This represents 16 per cent of the overall value of transactions carried out by new investors,” the department said. While it did not mention the nationality of the second largest investors, the department said the UAE nationals came third, having invested 1.575 billion dirhams (Rs 219 crore). According to the department, the ‘new’ money flowing into the Dubai property market last year totalled 13.13 billion dirhams (Rs 1,825 crore). Meanwhile, Asian investors formed 68 per cent of the overall number of investors in the sector, with the UAE nationals topping the list with 35 per cent representation of the overall number of Asian landlords, followed by Indians at 20 per cent.
	CREDAI’s call for reforms Launching its multi-pronged strategy to focus attention on the real estate industry's unending problems, the Confederation of Real Estate Developers' Associations of India (CREDAI) has decided to send an 'SOS' to the Prime Minister and planned for a nationwide developers' strike to sensitise the policy makers. The real estate industry across the country has been a victim of "official apathy and indecision" at various levels that has brought it to a crippling stage, said Lalit Kumar Jain, national President of CREDAI. In a statement reflecting the concern of the real estate industry Jain said, "Despite the fact that the sector contributes close to 7 per cent — working out to a whopping Rs140,000 crore — we are facing suffocation due to various administrative delays on various counts. But all our appeals for speedy action are falling on deaf ears". CREDAI recently held a conclave of developers in Pune in which 112 city presidents and 22 state presidents of the confederation participated. They discussed the challenges being faced by the real estate industry. CREDAI will soon seek an appointment with the Prime Minister to discuss the need for immediate reforms in the realty sector. In its next governing council body meeting it will decide to give a call for a day's strike to draw the government's attention towards the problems being faced by the industry, said Jain. "We may have to go on an indefinite strike if the problems affecting the developers and home buyers are not addressed," he added. He, however, clarified that the developer community was not against any government or a political party. "Our aim is to get the problems resolved so that we developers can play an effective role in the housing for all mission planned by the government," he said. Pointing out that "where there is will, there is a way", Jain said Nashik district collector deserved kudos for successfully implementing the policy of giving NA clearances within eight days of submitting a proposal. Jain explained that the housing shortage works out to 27 million as per current projections, and by 2025, shelter will be of a matter of a huge concern for nearly 50 crore persons. "Obviously, the government alone will not be able to meet the gigantic challenge and it will be imperative for it to involve the private sector initiatives on a large scale." Instead of facilitating the industry to function without any hurdles, the government is enforcing policies like compulsory reservation of 20 per cent of the developed property for affordable housing, he said and asked: "Is it fair to burden the majority 80 per cent buyers with additional cost?" "There are many other ways to ensure affordable housing. For example land can be made available at affordable rates to the developer so that he can build affordable homes for buyers. And, reforms on taxation, administration and banking are also very important", he stressed. Experience in other parts of the world has shown that reforms on four counts — administrative, land, taxation and banking — are vital for mass construction of houses. This requires political will and involvement at the highest level across the spectrum. "Real estate is a capital and labour-intensive industry and it supports over 200 other industries like steel, cement and other construction material. Thus, the reforms will have a cascading affect leading to a doubling of the GDP, employment for almost 1 crore persons, apart from providing a million white-collar jobs. —TNS
	Carlson Rezidor-Bestech to invest $42m in Gurgaon, Mohali hotels Sunit Dhawan The Carlson Rezidor Hotel Group has announced a strategic partnership with Bestech Hospitalities Pvt Ltd in India. Under this, the two will invest $ 42 million in a joint venture to develop two hotels - Park Inn by Radisson Gurgaon in Sector 88 of Gurgaon and Park Inn by Radisson Chandigarh at Mohali. As per the agreement signed at Gurgaon recently, Bestech will have exclusive development rights for Park Inn by Radisson in central and north India, with the goal to develop 49 Park Inn by Radisson hotels by 2024. Carlson Rezidor will manage the hotels through a management company in which Bestech is a partner. "We will introduce a new generation of Park Inn by Radisson, developed with a strong focus on the growing middle class in key emerging markets," said Simon C. Barlow, president, Asia Pacific, Carlson Rezidor Hotel Group, while addressing a Press conference at Gurgaon after the signing of the agreement. "We are proud to partner Carlson Rezidor in India with this new strategic partnership. We are confident that Park Inn by Radisson will appeal to domestic business as well as leisure travellers," said Sunil Satijia, managing director of Bestech Hospitalities. The states covered by the partnership include Chhattisgarh, Delhi, Haryana, Himachal Pradesh, Jammu and Kashmir, Madhya Pradesh, Punjab, Rajasthan, Uttar Pradesh and Uttarakhand.