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Time to make a kill?
Guest column
Realty bites
Decor trends
At home with
Feng Shui
Real
comment
Tax tips
2.8 m more houses needed by 2017
Realty guide
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Time to make a kill?
There are a number of factors that are responsible for a buyer’s dilemma. Much media attention was given to the National Housing Bank’s (NHB) Residex data for the period April to June 2013 for the top seven cities that showed an across the board fall in the prices of residential units. However, while the NHB Residex showed price drop, the ground realty is that prices in big metros have remained high. It is the smaller metros and the Tier II and III cities that have seen price levels get destabilised due to the rickety economic ecology in the country. Even in this, the data certainly doesn’t predict an immediate price correction across the
board.
The dismally low sale volume and rising inventory overhang is the other factor that is making buyers defer their decision in anticipation of a desperate sale by developers the subsequent price cutting. The unsold inventory level is 23 months in NCR and up to 48 months in Mumbai (the comfortable level is 14-15 months). But here, too, it will be erroneous to assume that the developers will blink first and lower the prices further. Few developers would admit to lowering the prices send wrong signals to buyers. The fact is that whatever fall is depicted by different agencies is generally in the secondary market where the sellers can lower their profit margins. In the primary market some new projects can be launched at slightly lower rates, but those under-construction or nearing completion are likely to maintain the price levels. The tricity tale Taking stock of the current scenario of the tricity market one can see the buyers in wait-and-watch mode. But if buying a property is on your shopping list this festival season then according to experts the time is ripe to take a plunge as prices are likely to stagnate and not plummet. “With most of the customers waiting to make a kill, the market will zoom the moment economic and political stability returns post elections. Then the prices will surely go up”, says city-based realty consultant R.P. Malhotra. Low sales and the current slump in the tricity region actually doesn’t mean that there are no buyers. It is just that no buying is being carried out. “We get about 400 to 450 client visits each month. So, if so many people are looking for the right deals and property then it means that they have an interest in buying. It is just that an average buyer is waiting for the right moment”, says Prateek Mittal, Executive Director of Zirakpur-based Sushma Buildtech group. “Those entering the market in the next six months are likely to get immediate returns as they wil be able derive maximum benefit once the market recovers”, he adds. The secondary market in Chandigarh, Panchkula and Mohali has taken a severe hit over the past one year. The prices have gone down by up to 35 per cent in certain areas. “For Chandigarh this is unprecedented as real estate prices here have never dropped so much. At the most these have remained stagnant, but this time around the fall has been significant”, says Malhotra. So, even though very few sellers are desperate enough to sell in this low tide, it is time to make a kill if one gets a good deal, he adds. However, for a mid segment buyer with a budget of
Rs 30 to Rs 50 lakh the choice lies only in the periphery areas. Here, too, the primary periphery zones like Zirakpur, Mullanpur and Pinjore-Kalka Urban Complex may not have much on offer if you want to buy this festival season. But one can check out good options in projects in Dera Bassi, Kharar, Banur, Landran Road and Baddi areas. And if return on your investment and appreciation of prices is also on your agenda, then also the periphery areas have good potential. “All these areas will give a return of over 30 per cent over the next 18-24 months. An investment in property is hardly a dead investment ever only point is that you should have the ability to hold your investment till the time favourable winds start blowing once again”, adds Malhotra. “Once economic stability returns and a new government is in place the situation is certainly going to improve for the realty sector in the country in general and in the tricity region in particular”, echoes Mittal. Commercial property also makes a good investment if one chooses the project and location wisely. For example the Delhi national highway stretch in Zirakpur which already has Best Price, Metro outlets, it is already active and currently the price range there for commercial property is between
Rs 5900 and 7500 per sq ft depending on the construction level of commercial projects and according to market experts these rates will be in the range of
Rs 9000 per sq ft once the construction is complete as the area has good commerical potential so one can get a good return on investment besides getting almost 12 per cent annual assured returns being offered by some developers there on up front payment for commercial space
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Guest column Real Estate Investment Trusts (REITs) have re-established the real estate markets of Singapore, Korea, US and Japan and have generated strong interest among the people. Considering the success of REITs in these markets, SEBI has polished the features of REITs, suggesting who can invest in these investment instruments.
The success of REITs in other markets of Asia is the major motivation for their introduction in India.
To encourage retail investors to invest in this asset class, REITs were created in the US as part of a special legislation that allowed these to be incorporated as companies without being taxed at the corporate level, provided they followed a set of rules and regulations. One of the main regulations is the distribution of 90 per cent of their income to their investors as dividends. This created a pass-through entity that investors benefited from as they received a consistent income flow, unlike stocks, which may or may not pay dividends. As for demand, REITs constitute the only means to infuse large doses of capital, which is a must for the realty sector. It has been projected that the sectors like hospitality, retailing, logistics and healthcare are supposed to get a big boost after the creation of REITs in India. As the realty market is mostly owned by private players, the REITs will generate more transparency to value-add and manage investment assets. But for generating more transparency these still need to have some strong organisation in the market. Launching REITs in India in a structure similar to what exists in the US may not be a wise move as several India-specific aspects must be considered before introducing such a product to the investment community. The dual nature of REITs emphasises their dependence on the real estate market. Without an organised real estate market, REITs can’t deploy the funds they raise. Also, the domination of private players might make the things a little cumbersome for big property investors in order to qualify for the REIT status. Such regulations in the Indian context ask for some relaxation in the qualification norms about the proportion of income from investment business. Like stocks, however, REITs are a part of the overall capital markets. REITs thus invest the pool of money sourced from their investors into real estate markets, linking them with Main Street as well. It is important to emphasise the dual nature of REITs since the existence of a mature capital market is as important as the existence of a mature real estate market. The absence of one of these elements makes it impossible for a REIT market to function. Why does India need to go for REITs? In India shortfall in residential and commercial spaces is huge while there is no shortage of demand. As such the constraints on REITs by government can only originate from inadequate supply position. REITs can be considered as a better investment plan if dealt with the above shortcomings. The present economy of our country would do well with such added investment and hence this is the reason why SEBI has thought of re-introducing the scheme to the public. It adds up as another investment arena for the investors who are looking for diversification of their portfolio. REITs provide flexibility in such way that the investors’ money is invested in risk-free real estate. Moreover, REITs help individuals to invest in the real estate market without having to buy the property actually. Even lower amount of money can be invested in the real estate with these. Buying a real estate property directly would mean investing a huge sum in a single project whereby REIT enables group buying which reduces the risks involved. REITs will make real estate affordable for the investors who own the best quality properties under expert management. Property industry and companies will be able to get funds at cheaper cost, leading to better margins. The productivity of the sector will improve with better corporate governance. The government will earn higher revenues from real estate and ancillary sectors. Just as gold can now be bought and sold as a mutual fund, REITs will channelise equity funding in the real estate sector. Once allowed in the Indian market, they would become a medium of convenient investment for developers and small investors. Further, the volatility of the market in general will be reduced. On the supply side, the benefits of REITs are many. It allows small investors to take part in the realty boom which is a direct fallout of the economic growth, specially a services-centric economy like India; gives depth to financial markets; provide incentive to mortgage finance by creating a secondary market through mortgage REITs; helps the retail investor to diversify —REITs have low co-relation to capital markets; and assures protection from inflation as real estate appreciation has strong positive co-relation with price rise.
Sebi guidelines Looking to attract more real estate investors into the capital market, Sebi has proposed listing of REITs saying the evolution of such investment vehicles is “crucial” for the rapidly growing real estate industry. REITs would be allowed to list on stock exchanges through Initial Public Offer (IPO) and can raise funds further through Follow-On Offers, according to the draft norms issued by Securities and Exchange Board of India (Sebi). “REIT shall be set up as a Trust under the provisions of the Indian Trusts Act, 1882,” it said while seeking comments from stakeholders by end of this month. However, REITs would not be allowed to launch any schemes. As per draft rules, only such entities that have at least 90 per cent investment in completed revenue generating projects. “To ensure regular income to the investors, it has been mandated to distribute at least 90 per cent of the net distributable income after tax of the REIT to the investors,” Sebi said. The Trust needs to initially apply for registration with Sebi as a REIT in the specified format. After being satisfied on the eligibility conditions, the regulator would grant registration to it. According to Sebi, REITs can issue units
of their investment schemes through a public offer and list them thereafter on a stock exchange in a way similar to the issuance and listing of shares during an IPO. For coming out with an IPO, Sebi said that the size of the assets under the REIT need to be at least Rs 1,000 crore, in a bid to ensure that initially only large assets and established players enter the market.
— PTI
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Realty bites
Real Estate Brokerage franchise network RE/MAX India, has formed a National Association with Godrej Properties. RE/MAX, with over 90,000 agents across the globe and in more than 90 countries, will now have the authority to sell and market all the projects of Godrej Properties Limited across the country. NAREDCO sets agenda
for growth The National Real Estate Development Council (NAREDCO) and the government have drafted a blueprint to help boost the real estate sector. Commenting on this development Navin Raheja, the newly appointed Chairman of NAREDCO commented, “we are grateful to the Government and Girija Vyas for these steps. This will help establish a seamless channel of communication between government and the industry players. Not only will the industry find its voice in the formulation of policies and other initiatives, this will also help the industry to understand the compulsions and priorities of the government too”. “Indeed, the real estate sector is facing severe challenges” said Sunil Mantri, President of NAREDCO. “The market conditions are tight. The liquidity crunch is getting worse and beginning to hurt every stakeholder, including the buyer. Also, there is a serious need for a better consistency and alignment in some of government’s policies”. Sunil Mantri further shared that NAREDCO is working closely with the government on a number of vital issues. Enhancing liquidity into the sector is perhaps the most urgent challenge. “We want the government to grant us the industry status. The Union Government needs to take urgent steps to help us get single-window clearances for our projects across the country. There is an acute shortage of trained manpower in the sector. The real estate sector needs government support to upgrade technology. We are happy that the government is extending its full support in resolving all these issues” he concluded. Grihapravesh ties up with Radius Group Grihapravesh Buildteck Pvt Ltd, today announced it has tied up with Radius Group for the first M2M compliant GREEN building in India at its project in sector 77 Noida. The Radius Group is a pioneer of Machine-to-Machine Communication (M2M) that puts the basic building blocks equipped with energy-harvesting sensors and connected systems to enable a home or office to become more intelligent leading to the future Smart City and is an ideal fit for developing townships and estates where long range foresight and planning are required. The collaboration would provide unique benefits to apartment owners including access control, asset tracking, automated number-plate recognition, building management systems, intercom and door entry systems, unified communications, smart home energy managements and boom barrier control. Red Fort Capital to
invest 1000 crore in Lotus Greens projects Private equity firm Red Fort Capital would invest Rs 1,000 crore in its various residential projects of Lotus Greens Developers in the national capital region. Lotus Green Developers has recently been founded by Nirmal Singh, one of the promoters of another realty firm The 3C, and its Vice Chairman P Sahel, who has worked for realty companies like Jones Lang LaSalle and DLF. “Red Fort Capital has already committed
Rs 365 crore. We will utilise this fund for development of our various projects in Delhi NCR region,” Lotus Greens founder Nirmal Singh said in a statement. The money would be utilised for a 100-acre township in Gurgaon and 50-acre group housing project on Yamuna Expressway to be launched soon. "The remaining
Rs 635 crore would be utilised for the company's expansion plan of adding more residential projects in the NCR," "Red Fort Capital is a leading private equity firm with more than $ 1 billion under management. The fund has invested in more than 20 projects in India with 60 million sq ft under development.
— PTI
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Decor trends An earthy feel to a home is always welcoming and is, thus, appreciated. It gives a feel of being enveloped in the innocence of Nature. Exquisitely hand-carved vases in abstract and unique shapes can highlight any dull, drab corner of the interiors. One can make the whole decor come alive by either lighting a few candles in these clay containers or by using dry or fresh flower arrangements. Vases with an intricately carved jaali not only make a smart statement but also combine aesthetics with functionality. Think like a craftsman To dress up your interior space you must use wooden flooring and bamboo which could be innovatively designed for the ceilings and windows. Earthy tones of the colour enrich the interiors and enhance the feeling of coziness. This transforms a regular place into a welcoming and lively home that blends with the landscape in a harmonious bliss. A touch of class
Give your interior space a luxurious look by the placing vases, planters, sculptures and murals in corners. These add wellness, cheerfulness and a character to the interiors. Tall lamps or jaali vases with an indirect lighting add elegance and glamour to a mundane interior space. Earthenware is the rightly chosen accessory for this look. Planters and urns with huge plants help to bring the outdoors in, apart from giving one a feeling of being one with Nature. It is like living in Zen. Urlis decorated with bright colourful flowers also enhance the appeal of decor. Interesting hand-carved urlis can be placed at the entrance of the living space to give it a very welcoming look. Another unique way of adding earthiness and warmth to any interior space is by adding a water element to the interiors. The soft whispering sound of the gentle water is amazingly therapeutic. Broad urns can be used as indoor fountains which definitely add a dreamy feel to the home. Another interesting element that enhances the vertical spaces is the murals and back-lit jails that can be placed as a painting or can be used in a cantilevered way.
The interior, boasting wooden decorations and plenty of granite and marble surfaces, exhales comfort and will remind you of the outdoors. It will also make the interiors feel more spacious than they actually are, due to the transparency that characterises the place. Recylcled chic Recycled or reclaimed materials can also be used creatively in the interiors. Individually, vases can
be put in the corners of the house with long sticks of flowers. The lighting must be designed to give oomph in the interiors as they make the things invisible in proper textures that one wants it to
depict. Speak through sculptures Back to rustic roots Earthy feel in an interior can be enhanced by using hardened clay or handmade ceramic tiles which look very trendy and can be placed in various decorative patterns. These can be mixed with stone tiles to make random patterns and are also very durable. — The writer is an Interior Designer
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At home with
Feng Shui Kitchen is a very important part of a home as this is the place where “energy giving” food is prepared for the whole family. The energy of the kitchen can be transferred easily to every member of the family. So the energy levels of the cooking area should be maximised by keeping the following points in mind at the time of construction of a house. Right location First of all, the kitchen should be located deep inside your house, although not in the center. If possible, the kitchen should not be visible from the main door. Ideally, a wall should separate it from the front of the house. Kitchen should be on the ground floor, as a kitchen located at basement level brings bad luck to the family’s matriarch. As you walk into a house, kitchen on the right hand side is more preferable than the one on the left. Kitchens that are located on the left side of the house. This may breed disharmony between siblings and betweeb children and parents. Avoid the northwest and southwest directions for kitchen. A kitchen in the northwest of your home as may damage the luck of the patriarch. I may even cause him to lose his major source of success — be it a powerful benefactor, mentor, or patron. Revitalising salt rituals in kitchens Of all the rooms in the home, the one most vulnerable to bad or stagnant energy is the kitchen. Once a year give the floor, door, and walls of the kitchen a salt wipe. This is a simple but powerful way to ensure that kitchen surfaces are cleared of the negative chi, and the food cooked in the kitchen never gets afflicted by harmful or stagnant energy. To clean your kitchen with salt, press a damp cloth into natural rock salt and, as you wipe all the surface, visualize that you are drawing out the old, negative chi . Always use natural rock salt because you need the power of the earth. Ssynthetic salt is ineffective. Managing fire and water elements As you wash and cook food in your kitchen, be sensitive to the conflicting energies of the fire and water elements. Of all the elements, these two have the potential to be the most beneficial or harmful. Water brings good name and reputation. Fire attracts honor, fame and success, but it can burn everything to ashes. Between the two, it is water that controls fire. Locating the sink and stove Water and fire confrontation is the cause of commotion and quarrels within the home so consider the location of the sink and stove in your kitchen, and do not have a toilet or water tank above the stove. During the yin hours of the night, keep at least one light turned on in the kitchen to rekindle the fire energy. Symbollically , this will also keep kitchen of the home warm, ensuring that yang energy never dies. Inside your kitchen make sure that the water tap is not near the stove or faces it directly. The stove symbolises the fire element, which will reach negatively to the water element. Avoid putting mirrors or mirror tiles above the stove as these will cause the fire energy to double which is harmful. Also make sure the stove does not face a staircase, refrigerator, toilet, water pipe, store room, or door. Ideally, position it diagonally opposite the kitchen door. If it is then opposite a back door, put up a divider to block the energy flowing through the door. The stove should never be underneath a window. The writer is a Feng Shui and Vaastu art consultant and founder of The Artizen. (She can be reached at:
www.artizen.co.in)
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Real
comment
Amid the economic downturn, it’s crisis time once again for India’s realty sector. Policy glitches are once again creating roadblocks for the revival of the sector.
Today, the biggest challenge faced by the capital-intensive real estate sector is the shortage of funds. Banks, which are the largest and cheapest source of finance, are shying away from lending to real estate companies.
Moreover, bank funding is restricted to project financing (excluding land) and is available to select developers with healthy balance sheets. While non-banking finance companies have exposure to only debt funding, that too at a much higher interest rate, the expensive private equity players are either not deploying their funds or are exiting the scene. Even on the foreign direct investment front, there’s a dismal scenario, with its share plummeting from eight per cent three years ago to three per cent now. The government allows 100 per cent foreign direct investment in construction development — such as townships, housing and built-up infrastructure — through the automatic route. But some restrictive conditions are proving to be a dampener. These include minimum capitalisation of $10 million in the case of wholly-owned foreign venture, minimum built-up area of 50,000 sq m, minimum 50 percent project development in five years and lock-in period of three years. There is a clear case for relaxing the lock-in period to facilitate early exit, as also a reduction in the minimum capitalisation and threshold built-up area. The Ministry of Housing and Urban Poverty Alleviation has already recommended a reduction in the minimum area requirement from 50,000 sq m to 20,000 sq m. The delay in launching real estate investment trusts is further adding to the woes of the fund-starved sector. On one hand, funds to the real estate sector have been drying up. On the other, interest cost as a percentage of sales has grown from 12 per cent two years ago to 18 per cent now, making debt repayment difficult for developers. To make matters worse, debt restructuring, or loan re-casting, has been made difficult by banks on the directives of the Ministry of Finance . One fails to understand why the government is fighting shy of granting infrastructure status to real estate to help it access cheaper capital, especially when the ministry concerned has already recommended it. Now, the Reserve Bank of India’s recent directive to ban the subvention scheme has closed the option of raising cheaper finance, despite the fact that there have been hardly any defaults. The long and cumbersome approval process is further adding to the prevailing real estate crisis. Unfortunately, the Real Estate Regulatory Bill has overlooked this important aspect. But an expert committee set up by the ministry recently has come up with a reform blueprint in this regard. One hopes it gets implemented to check large-scale delivery delays that not just add to the cost of the property but also shake the confidence of the property buyers and investors. A recent study by global property advisor CB Richard Ellis has said the real estate sector can double its share in the country’s GDP to 13 per cent, provided the cost of borrowing is reduced, approval process is fast-tracked and bottlenecks are removed. It’s time the government pro-actively took initiatives on the policy front to not just revive real estate but also to put it on fast track.
— IANS
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Tax tips
Tax on compensation amount
A.
The facts given in the query are not complete as the query does not indicate whether the agricultural land was situated within such distance as notified by the Central Government in accordance with the provisions of Section 2(14)(iii)(b) of the Act. In case the agricultural land was situated within the notified distance, the amount of additional compensation received shall be taxable in accordance with the provisions of Section 45(5)(b) of the Act which states that the enhanced compensation shall be deemed to be income under the head capital gain of the previous year in which such amount is received by the assessee. The amount of interest received on the enhanced compensation will be taxable in the year of receipt. Reply to the query is based on the fact that the agricultural land was compulsorily acquired in 1981. Will I have to pay tax on the balance capital gain amount? Q. I purchased a flat in 2000 for Rs 20 lakh on home loan. In April 2013, I sold it for Rs 1.50 crore. After clearing the loan of Rs 10 lakh, I kept the balance in a savings account. In July 2013, I booked a new house and paid Rs 1 crore from that account. I now have around Rs 40 lakh in the account for the purpose of paying instalments, if need be. If I don’t pay any instalment out of this money before June 2016, will I have to pay tax on the same? — Rajiv A. The liability to pay capital gains tax arises when the flat is sold by you. The same having been sold in the financial year 2013-14, the liability for capital gain tax would arise in this financial year. The amount of capital gain would be computed by taking into account the amount of sale consideration minus the cost of acquisition (subject to indexation). However, the capital gain is exempt under Section 54 of the Act, if it is invested in a new house, subject to certain conditions. In your case, capital gain computed after indexation works out at
Rs 1,03,47,384. You are, therefore, required to utilise Rs 1,03,47,384 by June 2016. As you have already utilised
Rs 1 crore in July 2013, you should make the payment of Rs 3,47,384 to the builder before July 31, 2014 to obviate the necessity of depositing the above amount under capital gain scheme and for utilising such amount towards the payment to builder. This would enable you to comply with the provisions of Section 54 of the Act and claim the exemption from the taxability of capital gain amounting to
Rs 1,03,47,384. How long can I keep the capital gains in my savings bank account? Q. I expect to earn capital gains from the sale of a residential house in December, 2013. As I get six months time under 54EC, I want to invest in National Highways Authority of India (NHAI) bonds in April or May, 2014. How long can I keep the capital gains in my savings bank account to avoid paying tax? — Rameshwar A. As per the provisions of Section 54EC of the Income Tax Act, 1961 (The Act) where capital gain arises on the transfer of a long-term capital asset and the assessee invests the whole or any part of the capital gains in long-term specified assets, such as bonds issued by NHAI or the Rural Electrification Corp. Ltd., within a period of six months from the date of such transfer, then the amount of capital gain so invested shall not be charged to tax. However, the maximum amount that can be invested in such bonds shall not exceed
Rs 50 lakh during any financial year. Therefore, capital gains arising from the sale of your residential house may be invested in NHAI or REC bonds within
a period of six months from the date of sale of the house. In this six-month period, the capital gain amount may be kept in a savings bank account but failure to invest the amount within the period of six months of the date of transfer of the house property would bring the entire amount of capital gain within the taxable net. Can I transfer a villa in my daughter's name without exchange of money? Q. I have purchased villa in Panipat for Rs 49 lakh from the developer in November, 2011, on sale agreement. I have made the full payment for this villa. The possession of the villa is yet to be taken. I have raised home loan of Rs 13 lakh from a nationalised bank. My daughter is perusing medicine in USA on scholarship. Now I want to repay the home loan of Rs 12 lakh from the funds to be directly remitted in the loan account by my daughter. Later on I want to transfer the villa in my daughter's name. I want to know whether I can transfer the villa without the exchange of any money. Actually, I want to create a mortgage deed in favour of my daughter directly from the developer. Please advise me how to proceed in this matter. — Balwinder S. Lonna A. Your queries are replied hereunder on the presumption that you have used the term ‘mortgage deed’ instead of the term ‘sale deed’:
Can house tax be deducted from rental income? Q. My query is regarding the reply given by you in an earlier issue (dated 9-03-2013). You had mentioned that the Service Tax in respect of rental income for the year is computed by deducting that from the house tax payable. But my CA (advocate) does not agree. He says that in Punjab the property tax is deducted but house tax is not deducted from rental income. Send me any one judgment in this regard. — Amit Singh A. Notification No. 29/2012-SD (dated June 20, 2012) exempts the taxable service of renting of immovable property, from so much of service tax leviable thereon as is in excess of service tax calculated on a value which is equivalent to the gross amount charged for renting of such immovable property less taxes on such property, namely, property tax levied and collected by local bodies. The words "property tax" and "house tax" are used inter changeably and, therefore, in case house tax has been levied and collected by a local body the same would be deductible for computing the amount on which service tax is leviable. Rules of exchange
A. Any gain on the sale of any capital asset is liable for capital gains tax. In this case, there is sale of land to the builder to the extent the undivided portion of the land which is proposed to be given in exchange of new residential units to be given back by the builder. Accordingly, the market value of the constructed property (excluding land) will be the sales consideration from which the indexed cost of land, which is being given to the builder, will have to be deducted. The balance amount will be the amount of capital gains on which tax is payable. However, the value of the construction is deemed to be your investment in a new house property, and therefore, you can claim exemption under Section 54F of the Act to the extent of such value of construction. Can I claim deduction on the entire interest amount? Q. I had taken a home loan for a flat in April, 2013 and immediately rented it out. I am showing the rent as my income. As per the bank's provisional certificate for financial year 2013-14, I shall be repaying interest of around Rs 2.5 lakh. I live in a rented house for which I get house rent allowance from my employer. Am I eligible for a deduction of Rs 2.5 lakh (entire interest paid) or only Rs 1.5 lakh? If I am eligible for Rs 2.5 lakh deduction, how can I prove this to my employer? — Sunil Jain A. As per Section 24(b) of the Act, income chargeable under the head “income from house property” shall be computed after deducting any interest payable on the capital borrowed for acquisition, construction, repair, renovation or reconstruction. In case of a rented property, the entire interest is allowable as deduction. The limit of
Rs 1.5 lakh is applicable only when the property is self-occupied. Therefore, you are eligible for deduction for the entire amount of
Rs 2.5 lakh as the property for which the loan is taken is a rented property. The provisions of Section 24(b) of the Act along with the interest certificate will help you to convince your employer that you are eligible for the deduction of entire amount of interest. Email your queries to
realestate@tribunemail.com
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2.8 m more houses needed by 2017
The figures given by the global consultant are based on the estimated growth of population across India. The top eight cities will constitute about 23 per cent out of the total demand. These cities are National Capital region (NCR), Mumbai, Kolkata, Chennai, Hyderabad, Bangalore, Pune and Ahmedabad. “Of the total demand in top eight cities, middle income group (MIG) and higher income group (HIG) categories constitute majority of the demand at 2.5 million units,” the consultant said. The demand for lower income group (LIG) will be a mere 3,00,000 units in these eight cities, due to expected increase in the housing and income standards in these key economic centres. The gap between cumulative supply and demand in HIG and MIG segments during 2013– 2017 is estimated to be about 45 per cent in the top eight cities. The supply of housing units in MIG and HIG during 2013–17 is expected to be around 1.4 million units in the top eight cities and of this nearly 1 million units would be in MIG category and only about 4 lakh units will be in the HIG category. “The gap between fresh demand and supply is expected to see an incremental expansion as supply will fall short on account of economic, regulatory and political scenario,” C&W Executive Managing Director (South Asia) Sanjay Dutt said. However, he noted that some of the demand in the next couple of years can be met through the existing vacant stock. “While demand for housing units will grow proportionate to the rise in population, supply is expected to be less aggressive in the short to medium term,” Dutt said. In the NCR, the consultant has projected the demand and supply in HIG and MIG categories during the next five years at 7,77,917 units and 6,06,274 units, respectively.
— PTI
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Realty guide
Do I need to pay stamp duty for inherited property?
A. A Will is a legal declaration by which a person, the testator, names one or more persons to manage his or her estate and provides for the distribution of his property after his death. According to property laws a gift is the voluntary transfer of property from one person (the donor or grantor) to another (the donee or grantee) without full valuable consideration. In order for a gift to be legally effective, the donor must have intended to give the gift to the donee (donative intent), and the gift must actually be delivered to and accepted by the donee. If you inherit a property through Will in India,
then no stamp duty hasto be paid. The stamp duty on gift deed in Haryana is less than 6 per cent.
Go for family settlement deed Q. I am a government employee and have two sons. Both my sons are married. I own some ancestral property and want to transfer one of my houses in the name of my one son. This house is in Jalandhar and all of us are also living in the same city. How much will it cost me to transfer the house . Should I gift the house to my son? — Rakesh Malhotra A. As the property in question is ancestral and not your self-acquired property, all the natural legal heirs are co-owners/co-sharers in it. You can make gift only for your share and not for that of anyone else’s share. For this, the best solution will be to make for a family settlement deed. The family settlement deed can be self-drafted or you can take the help of some legal expert. The property can be divided the way you wish by the way of this settlement and all the co-sharers should sign it unanimously. The deed has to be duly attested by witnesses. You can take an affidavit from your other son in which he can relinquish his rights to the property. After completing the settlement deed along with the affidavits you can forward it to the authority concerned for registration to carry out mutation in the revenue records. This will clarify the title of this property for future generations.
Cost of transfer Q. My parents had died in a road accident. There is no Will regarding the house owned by them in Punjab. We are three brothers and one sister. Kindly let me know how much expenditure and time it will take to get this property transferred in the name of the legal heirs? Also, if our sister is not interested in claiming her share in the property then will it be sufficient to take her consent on a simple affidavit? — Harshpreet Bhatia A.
Intestate refers to a situation where a person dies without leaving a legal Will. All the natural legal heirs of your mother and father become co-owners/ co-sharers of the property after their death. First of all you should
submit the death certificate to a competent authority. Then you should complete different formalities which may differ in the case of an accidental death. You can also take an affidavit from your sister in which she can relinquish her rights to the property, according to her wish and submit it to the competent authority.
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Real Estate Investment Trusts (REITs) have re-established the real estate markets of Singapore, Korea, US and Japan and have generated strong interest among the people. Considering the success of REITs in these markets, SEBI has polished the features of REITs, suggesting who can invest in these investment instruments.
The success of REITs in other markets of Asia is the major motivation for their introduction in India.
To encourage retail investors to invest in this asset class, REITs were created in the US as part of a special legislation that allowed these to be incorporated as companies without being taxed at the corporate level, provided they followed a set of rules and regulations.
Are prices going to fall further? Is it the right time to enter the property market or should one postpone the decision to buy by a few months more? There are shades of the Hamletian dilemma in the “to buy or not to buy” queries that are being posed to market watchers at the beginning of the festival season this year. With the Navratras failing to give a boost to the sales graph, the sector is likely to witness a lacklustre October-December quarter. But where does it leave you if you want to invest in a property.
Reviving a five-year old proposal, Sebi has issued draft norms for listing Real Estate Investment Trusts (REITs), which will help in channelising more funds into the real estate sector.
RE/MAX India partnership with Godrej Properties
Since time immemorial clay has been used to satisfy the creative urge of mankind . Pottery as a medium of expression of creativity is extremely flexible. Today any swanky and elegant interior gives paramount importance to accessories as their placement can change the vibrations of any living space.
Maintaining the purity of Nature and natural products is the key to weaving an earthy appeal in your decor as well as the whole lifestyle. Earthy is exotic and if you keep things like the weather conditions and the characterististics of the materials being used then it will not be difficult to achieve this look. A little renovation or just few shifts and add-ons can change the whole look of your living place. There are many who prefer organic products in terms of clothing and food and the same goes with the interior and exterior looks but with a different term called eco-friendly.
The colour palette which adds an earthy feel to the interiors includes muted earthy shades ranging from antique golds, browns, beiges, burnt Sienna to brilliant crimsons and vermilion.
Terracotta, stone and resin sculptures can be placed majestically and can make a statement in any home or living space.They add an element of mystery and are very trendy. This is one element that is everlasting as any inner space can be identified by the sculptures which it houses. A majestic sculpture in terracotta not only encrypts uniqueness but also adds grandeur. Sculptures depict story as these are made of several forms which make the space look alive.
Q. We had ancestral agricultural land in Ambala beyond municipal limit. It was acquired in 1981. There has been litigation regarding the amount of compensation and we received a sum of
Rs 9 lakh as enhanced land value and Rs 31 lakh as interest in 2013. The amount has been received as compensation is for agricultural land. Please tell us the income tax implication for the amount so received.
— Bandeep Rekhi
Q. We had purchased some land in 1995. A part of the undivided land is now being given to a builder in exchange for a constructed residential property of about 2,800 sq. ft. If the constructed property is taken as two units of, say, 1,500 sq. ft. and 1,300 sq. ft. in the land owner's name, will there be any long-term capital gains? How can one save the tax to be paid on this capital gain?
— Rajinder Kumar
Top eight cities, including NCR and Mumbai, would witness an additional housing demand of 2.8 million units in the next five years, but supply will lag behind due to economic and regulatory issues, says property consultant Cushman and Wakefield. “The total new housing demand across India will be nearly 12 million units in the next five years (2013-17),” C&W said in a statement.
Q. I had read in your paper that property received as gift from father has to be got registered by paying stamp duty of 6 per cent in Haryana. Kindly tell me that if I inherit some ancestral property through a Will then will I have to get it registered in my name through the same process or is there some other rule?
— Sunny Bhandari
