 |
|
| REAL ESTATE |
|
|
Business as usual in housing sector Salaried class hit RBI puts cap on housing loans Boom sans development in Faridabad Plots comparatively costlier than houses Counter-magnet project loses attraction Slump catches realtors unawares in Baddi
While planning, do not always follow the square or a rectangular garden concept Global Realty From leasehold to freehold Slugfest of giants in Dera Bassi
1,400-acre technology park on anvil in Bangalore City of Charminar expands Estrate talk Construction of Vidhan Sabha complex jacks up prices near Dharamsala TAX
Tips |
||||||||
|
|
|
Business as usual in housing sector
Witnessing a marginal impact on the demand, the builders in the national capital are taking it as a temporary phenomenon. Some of them have devised innovative methods of knocking down additional amenities in the flats and residential complexes to set off the rise in costs to the clients. “Where are the good properties for the young couples with growing double income in family, who are eager to buy their own home. Majority of them are not even concerned about interest rate, as their decision is dependent on rising monthly rents, property prices and availability of the property,” Dr B.P. Dhaka, Chief Operating Officer (COO), Parsvnath Developers Limited, a leading builder which is coming up with an initial public offer soon to finance projects, says “We have not seen any impact on the already soaring demand. In fact, the market is influenced by the demand and supply, roaring income levels and booming domestic economy, in comparison to small changes in interest rates,” he says.
Double impact
The hike in interest rate on home loans has not only increased the EMI for the customers, but also the cost of property. “We have been forced to revise the cost of our flats and outlets in malls by one to 1.5 per cent as the cost of raising funds has increased across the board,” Mr Anurag Gupta, MD, Majestic Properties, says. The company is coming up with integrated township projects in Rajpura and Mohali near Chandigarh. Notably, all leading public and private sector banks have raised lending rates to keep pace with the rising funding costs. The State Bank of India, HDFC, ICICI, Union Bank of India, Punjab National Bank and Oriental Bank of Commerce have announced a hike in interest rate and also deposit rates to meet the demand-supply gap in credit. Ruling out any such shift, Mr U.S. Bhargava, General Manager (Retails), Punjab National Bank opines: “Some of the private bankers and financiers may offer zero per cent processing fee or freebies on home loans, but the fact is that the customers soon realise that they are being taken for a ride by putting much higher hidden charges.” It is the public sector banks, which offer transparent deals, reasonable interest rate and good customer service, which is what a normal customer looks for. For instance, Mr Bhargava said, on a home loan of Rs 10 lakh for 20 year period, the revised EMI would be Rs 8,840 as against Rs 8,520, after hike in interest rate from 8.25 per cent to 8.75 per cent on home loans. Earlier in its annual policy statement for 2006-07, the Reserve Bank of India had increased the risk weight on banks’ exposures to commercial real estate and capital market to 150 per cent from 125 per cent —cautioning them against increasing risk in property credit. Loans in the Rs 2 to10 lakh category make up more than half the home loan market right now and another one-third is taken up by loans between Rs 10 and 25 lakh. However, some builders admitted that some clients are approaching private financiers to raise loans since banks were unable to ‘finance the black money’ portion of the deal. It is a fact, said a builder in Noida. “Most of the sellers demand 50 to 60 per cent of the total sale deed in cash as black money and the rest in white through cheques. Banks can finance only the white money portion of the deal, forcing the client to raise the balance money from private financiers and hefty rates,” he adds.
Speculative deals
Bankers said with the ongoing bull run on the stock market, spurt in global oil and gold prices, a section of market in investing in real estate speculating further appreciation of prices. In fact, in Noida, Gaziabad, Gurgaon around
Delhi, hundreds of flats have been bought by the builders, who are expecting a further jump in prices. Further, government’s decision to allow 100 per cent foreign direct investment (FDI) under the ‘automatic route’ has spurt investment in the vital infrastructure sector. Groups showing interest in India include insurance company American International Group Inc (AIG), High Point Rendel of the UK, Edaw-US, Japan’s Kikken Sekkel, Lee Kim Tah Holdings and Cesma International from Singapore. Market experts say these foreign players are bringing in foreign capital, which earns lower interest rate in other markets, to India to earn high profits from the booming real estate market. So, the hike in interest rate is unlikely to slow down the demand in real estate sector — which is primarily a sellers’ market especially in the metros and major towns across the country.
Further hike
Builders and customers are indeed worried on interest rates, which have increased twice over the past one year. They apprehend further hike in interest rates in near future. Financial experts in the market, however, rule out any further hike in the interest rates at least for a year. “The interest rates are likely to stay stable at the current rate as the governments across the world are taking steps to keep up the boom in world economy. But one cannot rule out the impact of any unseen incident like natural calamity, war in Iran or unimaginable increase in oil prices on the interest rate,” said a senior official in the Finance Ministry. |
|
Salaried class hit It has become more difficult for the person belonging to salaried class to turn his dream of making his own house a reality. Thanks to the recent increase from 0.25 to 1 per cent in the interest rate on both floating and fixed housing loans by almost all private and nationalised banks. Sameer, a physical education lecturer in a private school in Karnal, said he had made a plan to get housing loan from a city bank for purchasing a house from a coloniser about a month ago and he was also working on it but was left with no option but to leave the plan midway due to a steep hike in the interest on housing loan. Had he taken the loan on the increased rate of interest, his monthly budget would have affected adversely, he said, adding that was why he decided not to go ahead with the purchase of his own house at least for some time. Naveen Thukral, a property consultant, said the recent increase in the interest rate on housing loan had adversely affected their business. Mr. Thukral said that the number of inquiries for purchasing a property had reduced after the revision in the interest rates. |
|
Slump catches realtors unawares in Baddi
With Baddi-Barotiwala-Nalagarh emerging as the prime industrial area in Himachal Pradesh, the real estate prices have registered an all-time high. The region, which hitherto attracted only industries, has now established a name for itself in the North Indian real-estate business. The boom, however, has now started showing signs of an early recession with property prices crashing by as much as 15 per cent in the past three months. The initial euphoria tempted builders from as far as Delhi, various parts of Punjab and adjoining Chandigarh to venture here. The region, where property rates were barely Rs 7 to Rs 12 lakh per bigha before announcement of the 2003 central industrial package has witnessed rates ranging between Rs 25 and Rs 70 lakh per bigha. The most priced place is the Sai Road at Baddi where property prices reached a peak registering an almost Rs 1 crore per bigha. The land, which barely drew Rs 10 to15 lakh per bigha prior to the 2003 industrial package, has now settled at Rs 60 to 70 lakh per bigha. Similarly, land on the periphery of Baddi is now selling at Rs 15 to 25 lakh per bigha as against the earlier rate of Rs 7 to 15 lakh per bigha. Similarly, land in and around Nalagarh has now settled at Rs 20 lakh per bigha from the earlier Rs 7 to 8 lakh per bigha. Gauging the pulse of the market the Himachal Pradesh Housing and Urban Development Authority (Himuda) also offered plots for industrial, housing, shopping complex and malls, for auctions at Bhatoli Kalan in February. As many as 85 real-estate dealers from Delhi, Gujarat, Mumbai and neighbouring Punjab, Haryana and Chandigarh participated in the auctions. A plot for multiplex measuring 4,636 sq.mt fetched a price of Rs 7.87 crore, far exceeding the reserve money of Rs 1 crore accessed by the Himuda. A hotel site, measuring 750 sq.mt, fetched Rs 3.31 crore as against the reserve money of Rs 32 lakh. A site for shop cum-office measuring 350 sq.mt fetched Rs 1.1 crore. “The real estate boom in the Baddi-Barotiwala-Nalagarh is a direct repercussion of the industrial package given to Himachal. Whether it would be able to sustain itself is a factor worrying the dealers?” opined a real-estate dealer who has been operating in the region since the past 15 years. “Though these higher prices procured in the Himuda auctions surprised everyone but going by the pulse of the market in the surrounding Chandigarh, Zirakpur, Panchkula, Mohali, Kharar etc., these rates were pegged as normal for a developing industrial area like Baddi ” explains Baldev Bhandari from Delhi. This, however, proved to be a blind gamble for the dealers. A slump in the real estate prices nationwide, is having an impact in the industrial belt too. With few buyers coming forward, the dealers suddenly found it difficult to procure enough buyers. This created a panic situation where the dealers, who had procured auction rights, tried to dispose off the plots. A fall of as much as 15 per cent was witnessed in the overall market. Despite seeking extra time of a month and a half the dealers have not been able to deposit the auction amount. The Chief Executive Officer (CEO) of the Himuda, Mr Y.R. Sharma, agreed that time had been sought by the dealer and certain queries raised by them had been addressed. He added that no further time would be granted and a re-auction of the site would take place in case this deadline expired. He added that 10 per cent amount deposited with them at the time of auction would also be forfeited. Some local dealers, however, maintained that the abnormal hike was a result of property buying and selling within a group of builders from the plains. This, they explained, created an artificial hike for a short time, which could not sustain for long and the prices have now settled at the normal rate. Mr Khullar, a builder, said the lack of infrastructure existing in the area acted as a major deterrent to attract buyers. Though there was an overwhelming demand for flats in the region for company executives but none wanted to reside in a place, which offered little in terms of basic facilities. Another major reason accounted for this slump is the approaching deadline for setting the new industries for availing various incentives. With March 2007 being the final date the number of new ventures has dipped down. The state CID’s recent crackdown on a number of property dealers further created panic and frustrated many land deals, disclosed another realtor. Realtors are now keeping their fingers crossed and awaiting another boom, or at least praying that the existing prices sustain so that they could reap some benefits. |
|
Right time to lay lawns
Do not add farmyard manure as is the source of weed seeds, advises Satish Narula Lawn in a garden is like a canvas for the painting. Any amount of feature introduction or planting of even exotic plants cannot make up for a poor lawn. This is the time for the laying of a lawn. It is like the saying ‘a stitch in time saves nine’ that a few precautions taken at this time, before laying a lawn afresh may spare a gardener from perpetual problems like weeds, yellowing or browning of lawn, patches and uneven growth of the grass in the lawn.
Eradicating weeds
One can understand a gardener beginning with a new lawn in a new house but why has he to do it repeatedly? One of the factors could be the repeated treading at the same place that makes the place compact causing deterioration of the quality of the grass, but that is true in case of small lawns only. In big lawns, it is the presence of obnoxious weeds that one has to do it more often than necessary. Of the two types of weeds, the grass-look-alike dila and motha or the broad leaf weeds like dudhi , euphorbia or mehni etc., the former are more obstinate and deep-rooted. The latter ones could be eliminated by use of chemicals. To minimise this problem, it is necessary to remove as much weeds as possible at the time of laying a fresh lawn. This time of the year when the sun is as it is fierce best the soil should be dug as deep as possible (one-to-1 1/2 ft) and left open for about 10 days. The weed roots thus exposed should be hand picked. This process of digging, exposing and picking of roots should be repeated as often as possible, till the third week of June. Such ground exposures not only burns the obnoxious weeds but also helps in getting rid of the insects breeding underground. You can add about three and a half kilogram each of superphosphate and muriate of potash in an area of 100 sq m. This should be thoroughly mixed with soil before planting the grass.
Watering
Another big problem in the freshly laid lawn is of termites. Chandigarh soil is full of them. For initial, sprinkle lindane dust at one kg in 100 square meter lawn area. Mix the fertilisers and the insecticide thoroughly in the soil. Do not add farmyard manure in the soil. It is the source of weed seeds. As the monsoon draws nearer, the soil should be levelled with natural gradient away from the building. The land thus could be watered to see the level and it should be corrected if there are depressions or elevations. Watering will also allow the weeds to emerge and could be physically removed. The surface of the soil should be as smooth as the tabletop. The planting of the lawn should ultimately be done with the onset of rains. Planting of grass can be done four inches apart. Immediately after planting, use a roller to compact the soil. The lawn does best on sunny locations and the difficult-to-grass or maintain areas should be landscaped with ground cover plants or by the use of stones and pebbles. The fresh lawn has to be watered everyday till the turf is formed. During this period, any weed appearing has to be physically removed. In case of established lawns, the broad-leaved weeds could be controlled by the use of 2, 4-D (sodium salt).
Spray time
Spray on a calm day keeping the nozzle close to the grass. In case of old lawns, this is the right time to spray the chemical to kill the weeds. At this time they are weak due to scorching heat. For the control of termites in such lawns the whole of the lawn area has to be sanitised. For this, chlorpyriphos has to be dissolved at one millilitre to a litre of water and complete surface has to be covered by walking and pouring the chemical with the help of a fountain. For the purpose of selecting the grass variety, you have Calcutta Grass, Korean or Nilgiri grass. Whereas the former and the latter form excellent soft turfs, Korean grass is not liked by many due to its piercing blades and tuft formation on the turf, if the mowing is missed by a few days due to certain unavoidable circumstances. The grass within the turf dries due to non-percolation of the air and water. When mowing is finally done you get yellow and brown patches. Calcutta Grass grows fast and forms turf within a matter of month. |
|
|
From leasehold to freehold
A paradigm shift in the real estate scenario in Ambala Sadar is expected to take place following the possibility of freehold property being permitted in the area. Ambala Sadar is the only area in entire Haryana where the vexed problem of leasehold property exists. A No Objection Certificate is required for property transaction and getting the NOC seems to be a tough task for the common people. A demand for converting leasehold property into freehold property has been repeatedly made. Now, efforts are afoot to allow conversion of leasehold property into freehold property. The initiation of this effort has led to a marked change in the property scenario with realtors eyeing property in the Ambala Sadar area. Ambala Cantt MLA Devendra Bansal said that a report with regard to conversion of property in Ambala Sadar to freehold has been submitted to the Haryana Chief Minister, Mr Bhupinder Singh Hooda. “The report had been prepared by the Commissioner, Ambala division, Dr Mahavir Singh, and forwarded to Financial Commissioner, Mr Bal Bala Bhaskar,” he said. Mr Bansal said that Union Minister and Ambala MP Kumari Selja is making efforts so that this initiative comes through at the earliest. “A major problem of the local people will be solved if freehold property is allowed in Ambala Sadar,” he opined. Presently, in Ambala Sadar area for leasehold property, the people only have ownership of the superstructure but they do not have ownership of the land. Many properties have been constructed in the pre-Partition era and people have been living in them for the last couple of generations. Yet, when it comes to ownership, the property owners of Ambala Sadar lament that they do not have right over the land on which they have been living for the last many decades. The problem was further compounded by the fact that some of the records, which were in the Municipal Council Ambala Sadar office were destroyed during the Mandal agitation. Property owners observed that NOC was introduced in the 1990s but it was withdrawn by the then Haryana Chief Minister Bhajan Lal. The announcement for withdrawal of NOC had been made by Mr Bhajan Lal at a public meeting. But, NOC was re-introduced during the previous Chautala government. However, with the effort to allow conversion of leasehold property into freehold property, people will be more interested in buying property in the heart of the town. Early reports indicate that the prices in the outer areas of Ambala Cantt are likely to take be affected since home buyers, investors and financiers are more likely to buy property in the Ambala Sadar area. The prices of commercial properties are also expected to show an upward movement in the Sadar area. |
|
Slugfest of giants in Dera Bassi Dera Bassi, the strategic subdivisional town on the Chandigarh-Ambala highway, is proving to be the next destination of big builders and colonisers. With the major real estate players, including big names in the business from New Delhi, buying large chunks of land for the setting up of the mega projects, the town is bursting at seams. In fact, the battle among realtors is firing on all cylinders with two major players — the Silver City Group of Companies and the Omaxe Construction Limited — launching their mega multi-storey projects to fight .out for a share in the ever-expanding booming business. The major real estate giants, who have reportedly purchased large chunks of land in the sub-division, are the ATS Group, the Motiaz, the Parshavnath, the Ansals and the Gulmohar. If the industry sources are to be believed, several other real estate companies are in the process of launching their projects aimed at the middle class. Silver City has taken a lead in this direction. It has come out with the Silver City Themes on the Dera Bassi-Ramgarh road. The land around the road, which is set to emerge as the bypass to Shimla from the Ambala side, has already caught the fancy of the land developers, who had purchased huge chunks of land. “Dera Bassi is going to be the next destination as Zirakpur is already bursting at seams and going out of the reach of a common man. With the work on the flyover over Zirakpur as part of the four-laning project of Ambala-Chandigarh in full swing, the connectivity of Dera Bassi is going to be faster, both from Chandigarh and Ambala,” Mr Sunil Bandha, General Manager of the Silver City, said. |
|
Making fortune selling luxury homes Kwek Leng Beng, Singapore’s second-richest man, has made a fortune selling luxury homes. He looks set to make a whole lot more as the swankier end of the real estate market leads the way out of a five-year slump. As Singapore lures the jet set with private banking services, low taxes and plans for casinos and marinas, the 65-year-old tycoon’s City Developments Ltd., the top seller of private housing in Singapore, can watch its bet on top-end real estate pay off. “Kwek was out of fashion for a while. But he’s reaffirmed his reputation as one of Singapore’s savviest businessmen,” Daiwa analyst David Lum said. Kwek is building a sail-shaped skyscraper, part of the government’s multi-billion dollar waterfront that will include Singapore’s first casino, a marina and parks. Kwek’s development, called The Sail@Marina, was sold out within weeks of its launch last year. Another of his projects — St Regis Residences, where condo owners can opt for in-house butler services — is expected to set a price record in Singapore when it goes on sale in a few weeks. Kwek, a sports cars enthusiast who owns a Porsche, a Ferrari and a Maybach 57, inherited wealth from his father and used it to expand the family’s property and hotels business. With an estimated net worth of US$3.6 billion in 2005, he was ranked Singapore’s second-richest person by Forbes magazine after Ng Teng Fong, who owns property firm Far East Organisation. Kwek’s father, the late Kwek Hong Png, was a classic overseas Chinese success story. He left Fujian province in China as a penniless teenager with his three brothers, arriving in Singapore in 1928 and later founding the Hong Leong group there. Kwek Hong Png’s brother, Hong Lye, moved to Malaysia to expand the family business. When the next generation took over, the business interests diverged, even though the Singapore and Malaysian sides have kept their cross-shareholdings. Extended family ties still run deep. Today, Kwek Leng Beng lives in a mansion close to his younger brother’s in a prime area of the city-state and runs an empire of 500 companies worldwide, including listed CityDev, Hong Leong Finance and Hong Leong Asia.
— Reuters |
|
|
1,400-acre technology park on anvil in Bangalore Brand Bangalore is not only here to stay, but will continue to outstrip Hyderabad in terms of total IT export revenue. And no company has left Bangalore. In fact four new companies are being added every week. The view, put across by the Karnataka Government, was also corroborated by the Software Technology Parks of India (STPI), while releasing the state’s export figures of $8.9 billion. This represented an year-on-year growth of 37 per cent. Explaining why Hyderabad is not going to catch up with Karnataka in the near future, state IT and BT Secretary, Mr Shankarlinge Gowda, said the state had recorded an export revenue of Rs 37,600 crore against Rs 12,500 crore recorded by Andhra Pradesh. He said the state’s share in the national exports had increased from 35 per cent last year to 37 per cent this year. As far as exit of industry in the state is concerned, the STPI Director, Mr B.V. Naidu, said no company had left Bangalore. “Nor can they afford to”, he said, adding some companies were expanding outside Bangalore in new centres like Mysore and Mangalore. About 1,170 firms based in Bangalore contributed Rs 366 billion and the three secondary cities of Mysore, Mangalore and Hubli contributed Rs 9.67 billion to the exports. In terms of investments in the IT sector, the state has attracted 201 firms during the fiscal under review, including 124 foreign equity companies, with a combined investment of Rs 27.61 billion.The venture capital (VC) funded foreign firms have brought in Rs 18.82 billion, while 77 Indian companies invested Rs 8.79 billion. Among the global IT major firms which commenced operations in FY 2006 are Fortune 500 companies such as J.P. Morgan Services, Target, Caterpillar and Apple Computer. Mr Shankarlinge Gowda said in order to make Bangalore a preferred IT destination, the state government is setting up 1,400-acre hardware technology park near the upcoming international airport at Devanahalli and 500 acres each at Bidadi and Dobbaspet on the outskirts of the city for setting up new software companies. On the hiring front, the IT sector is projected to employ about 70,000 persons in the current fiscal as against 40,000-45,000 in the last fiscal. |
|
City of Charminar expands
Hyderabad is on a roll. The city is witnessing an unprecedented boom in the infrastructure development. The push given by the earlier TDP government to the all-round development of the city with particular emphasis on the IT sector has gained a momentum of its own that is now unstoppable following several new initiatives taken by the present regime.
The ongoing infrastructure projects, which are in various stages of implementation, will, on completion, catapult the city into the league of metropolis of the world. Estimated to cost about Rs 18,643 crore, these projects are poised to change the face of Hyderabad forever. The first and the most prestigious of these projects is the greenfield international airport coming up at Shamshabad at a cost of Rs 1,600 crore, billed as the first of its kind in India. The project, being funded and developed by the GMR Hyderabad International Airport Ltd, as a public-private joint venture between the GMR Group, Malaysia Airports Holdings Berhad and both the government of Andhra Pradesh and Airports Authority of India (AAI), will be completed by March 2008. Another ambitious project that will transform the city is the Outer Ring Road (ORR), which will cover 162 km round the city with 33 radial roads connecting the inner parts of the city. The Phase I of the project, costing Rs 500 crore, will cover a stretch of 22 km from Gachibowli to Shamshabad. Hyderabad Urban Development Authority, which is the nodal agency for implementation of the project, has already set the ball rolling. Officials say work will start from June 1 and would be completed by March 2008. Phase II of ORR requires Rs 3,000 crore and is still awaiting clearance from the Ministry of Environment and Forests. Three of the radial ring roads have already got the go-ahead but the development authority is still mulling over the mobilisation of funds to the tune of Rs 105 crore. The government has planned 20 integrated townships, along the ORR through public private partnership (PPP) route. Already Dubai Internet City has contracted to develop a township at Koheda at a cost of Rs 2,500 crore. Two more townships at Tellapur and Maheswaram will follow soon. The Andhra Pradesh Housing Board already completed development of two townships — known as Singapore Township (at Uppal) and Malaysia Township (at Kukatpalli). An elevated expressway of 11.5 km stretch from Mehdipatnam to Aramghar is in the pipeline to reduce travel time to the new international airport to 30 minutes from the city. The development authority plans to build a mini township for NRIs in 200 acres of land given by the state government at Rajendranagar, the proceeds from which will have to go towards the budget of Rs 600 crore for the expressway. Tender notification for the project was already issued last month. A metro rail transit system on the lines of Delhi Metro has been proposed on a stretch of 60 km at a cost Rs 7,000 crore. Seven consortia have expressed interest, but funding remains a problem. The state government is looking at various options to raise its share of Rs 1,400 crore. But the authority is confident that the project deadline of 2010 can be met without major hiccups. Another project to improve traffic conditions in the city is the integrated transport terminal. The terminal will come up at old Gandhi Hospital in Secunderabad to relieve congestion around railway station, which is presently choking with vehicles and milling crowds. The state government is planning to construct a 28-storied twin towers near the terminal to make the project financially viable. The terminal, to be built at a cost of Rs 250 crore, is to be completed by 2008. The newly developed Hyderabad International Convention Centre (HICC), which hosted the Asian Development Bank’s Annual General Meeting early this month, is the largest of its kind in South Asia. More than 2,500 delegates, who visited the city during the ADB meet, were bowled over by the newly widened and sparkling roads, lush greenery in public places, flyovers and the improved infrastructure of the city. |
|
Estrate talk
MBD Group, a publishing sector behemoth that recently forayed into the real-estate segment under the brand name MBD Neopolis, is planning to embark upon pan-India realty expansion drive. “After registering our presence in the North, we are looking at Goa, Hyderabad and Bangalore,” Mr Ashok Kumar Malhotra, Chairman of the MBD Group, said while talking to The Tribune. MBD Group already has two sole projects in Ludhiana and Jalandhar and a five-star hotel joint venture at Jalandhar in a tie-up with the Radisson Group The group is developing premium hospitality projects and has simultaneously announced a mall with multiplex in Jalandhar with plans of malls in Amritsar and Patiala as well. Mr Malhotra said that the focus of the company would be on mixed land use development and the group would primarily be looking at a consortium of malls, luxury hotels, multiplexes and retail in the South. Negating plans of global expansion, he said the company is looking at opening a chain of food court malls in North India, subject to necessary regulatory approvals,” he said. “Gigabyte, as these food court complexes would be called,” will shortly come up across Punjab in cities like Amritsar, Ludhiana, Patiala, Mohali and Chandigarh,” he disclosed and added that top realty firms would not be focusing on one particular segment (hotels, malls, housing) but an array of products as each “construction entity was interdependent upon the other.” |
|
Construction of Vidhan Sabha complex jacks up prices near Dharamsala
Not far from Dharamsala town, the picturesque Sidhbari-Fatehpur area is currently the obvious choice to own a piece of land. With work beginning on the Vidhan Sabha complex in Sidhbari, there has been a 35 to 40 per cent hike in the land prices in the area. The unavailability of plots within the municipal limits of Dharamsala town is another reason why this stretch is fast emerging as the most preferred option to invest. Property dealers believe that there could be further appreciation in rates once the Vidhan Sabha complex comes up. Lakhan Pal of Lakhan Pal Associates says land rates are booming right from Shila Chowk to the Yol Cantonment, including in the Tapovan, Sidhbari, Fatehpur and Rakkar areas. But even after the hike, the land prices in Dharamsala are nowhere close to the rates in Punjab or Haryana. A 400 square meter plot can be bought for up to Rs 7 lakh. “There has been a hike of around 35 per cent in land prices in this area. A plot, which was for Rs 4 lakh last year, is now available for Rs 5 lakh,” he says. The civic facilities are good in the area and the development would gain momentum due to the Vidhan Sabha complex and other allied offices being set up there. Even though McLeodganj, Bhagsunag and Civil Lines have been the top choices for investment, no plots are unavailability in these areas. The picturesque surroundings are also attracting people from the plains also to buy a plot for summer retreats. P.P.Raina, a retired Town and Country Planner, Dharamsala, believes land prices were bound to shoot up in the area as no free plots are left within the municipal limits. The Vidhan Sabha complex is only one of the factors. “While a 400 square meter plot can be had for Rs 7 to 8 lakh, along the main road, you can own the same area for a mere Rs 2 and 2.5 lakh about 500 meter away from the road in a rather cut-off place,” he says. The area in Khaniara where the School of Legal Studies and the proposed university is to come up is also witnessing a hike in land prices. The same is the case with Tanda where the medical college would soon become functional. On the other hand, says Raj Pathania, a property leader in Kangra, the setting up of a base in Yol Cantonment by 9 Core has extended the boom to that area as well. A cantonment lying deserted so far is now humming with activity. Amardeep of Design Forum says that there is also apprehension in the minds of people holding land close to the Vidhan Sabha complex site that the government may not acquire it for building road or a parking lot. With holding of the winter session of Vidhan Sabha to become a regular feature at Dharamsala, the work on the Vidhan Sabha complex in Tapovan, near Sidhbari, has already begun and its first block is likely to come up by the year end. While the first block would house the main hall and opposition and ruling lounges, the second block would have offices of the ministers and conference and seminar halls. The second block would be used by government departments and the district administration for holding local events. This would ensure that there is enough activity in the area throughout the year. |
|
TAX
Tips By S.C. Vasudeva Q. I bought a house in Delhi in 1982 for 3 lakh and the current price is 73 lakh. Now if I sell it, I assume I do not have to pay capital gains tax if I am re-investing this 73 lakh again in buying a residential house. What happens in case of NRI who is settled abroad and wants to buy a primary residential house abroad using the same amount of 73 lakh, although this amount will be a mere down payment towards the actual cost of 2 crore. I understand when NRI wants to repatriate the proceeds of the house abroad he has to pay taxes in India first and then only can get repatriated that too with chartered accountant certification. In this case, NRI is at disadvantageous position, because had he been re-investing in India itself then there was no capital gain tax but in case of repatriation although for the same purpose of reinvesting for buying house he is paying taxes. Sir, how to avoid paying taxes in this scenario. Although India and the US have a bilateral agreement of taxes but I do not know that covers this part or not. — Rakesh Kumar A. In accordance with the provisions of the Section 54 of the Income Tax Act, 1961 (the Act), it is the amount of capital gain earned on the sale of a house, which is required to be invested in the acquisition/construction of a new house within the specified period. The specified period for buying a new house is one year or before two years after the sale and for construction of a new house it is three years after the date of sale. Your presumption that the entire amount of Rs 73 lakh will have to be reinvested in acquiring/constructing a new house is not correct. Though Section 54 of the Act does not state in as many words that the investment of capital gains in the acquisition/construction of a residential house should be made in India, yet it can be very much deduced from the provisions of sub section (2), which provides for the deposit of unspent amount in a separate account in specified institutions in India and the objectives behind the section, the exemption should be available if such investment in a new house is made in India. I may add that recently Ahmedabad Bench of the Income Tax Appellate Tribunal Bench D in Leena J. Shah vs. ACIT Baroda (6 SOT 721) (AHD) has held that the benefit of Section 54F of the Act cannot be availed in case the investment of capital gain earned on sale of a capital asset other than a residential house is made in the acquisition of a residential house outside India. The capital gains tax is payable by all assessees, irrespective of their residential status, if the house property is situated in India. There is thus no discrimination between the residents and the non-residents. You can save the capital gains tax by investing the capital gains in capital gains saving bonds which have a lock in period of three years. Godown rent
Q. We are receiving income from godown rent in firm M/s (having four partners). We are giving 35 per cent tax on income taken from a Punjab Government agency. How can we change this firm into co-owners or any way reduce the tax as we are paying tax on firm basis. We have no other income in this firm. Please clarify whether we can dissolve this firm and whom to inform for this one more we have received. Subsidy on loan amount Rs 10 lakh SBOP Agriculture Storage on value 25 per cent basis Rs 5,43,000. Amount of subsidy will be considered as income of any other term. — P.L. Garg A. The Partnership Act, 1932, defines partnership as a relation between the partners who have agreed to share the profits of business carried on by all or any of them acting for all. The basic test for the existence of a partnership is the carrying on of business. Since no business is being carried on by the firm, it can be assessed as an association of person by tax authorities. I would suggest that immediate steps should be taken to dissolve the partnership and by virtue of the dissolution deed the partners can be given ¼ of the property in lieu of their shares in the partnership. I may add that this would attract the provisions of Section 45(4) of the Act and the firm shall be liable to pay capital gains tax with reference to the fair value of the godown. The nature of the subsidy is not clearly evident from your question. I am therefore not able to give my opinion on this issue.
Two houses
Q. We have built up a house with loan from Haryana Government in 2000 at Karnal in the joint name with my wife. We both are teachers in Haryana Government and posted at Ambala. Now we have purchased another built up house with loan from ICICI Bank, at Ambala for living purpose. This house at Ambala is also in joint name with my wife and loan is also in joint name with my wife. (i) Now please tell whether Principal refund amount of both houses will come under the saving scheme of Rs 1 lakh under Section 80C. (ii) The accrued interest of first loan of Haryana Government and the interest paid on the second house of ICICI Bank, whether both will be countable under the category of housing loan interest under Section 24. (iii) In case of IT, in any particular financial year, can my wife avail the benefit of principal refund amount and/or interest paid (partially my wife and partially me). (iv) As the first house at Karnal is being occupied by my niece without rent then what minimum rent should I need to show as income and repair expenses etc. House is of 160 yards in HUDA sector. Please clarify with sections. — Vinod Gupta A. The answers to your queries are as under: (i) A plain reading of the provisions of Section 80C of the Act suggests that it should be possible to claim the deduction of the repayment of amount borrowed for the purposes of the construction of both houses within the prescribed limit of Rs 1 lakh. (ii) The interest payable in respect of loans raised for the construction of both houses should also be deductible under Section 24 of the Act against Income from House Property. (iii) The benefit in respect of repayment of amount borrowed as well as the interest payments can be claimed by your wife provided the investment in the construction of house has been made by your wife. The deduction would be allowable to both in the same proportion in which the investment has been made in the acquisition of the land and the acquisition/construction of the house. (iv) Section 23 of the Act provides for the determination of annual letting value for the taxability of the income from house property. According to the said section, the annual letting value of any property shall be deemed to be (a) a sum for which the property might reasonably expected to let from year to year or (b) in case the property is let and the actual rent received or receivable by the owner is in excess of the sums referred to in (a) the amount so received or receivable. In your case since the property is not let, you may be able to adopt the annual value fixed by house tax authorities, as annual letting value for the purpose of Section 23 of the Act. |
|
Buzz on Bourses Mumbai:
Peninsula Land Limited (PLL), the flagship company of the Ashok Piramal Group, and the Dawn Mills Company Limited
(DMCL), have approved their merger to consolidate their real estate businesses under one company The merger was approved by the board of directors of both the companies at a meeting on May five, an official pres note said. The Board has approved an exchange ratio of 1:20—for every one equity share of Rs 50 of DMCL held, the shareholders will be offered 20 equity shares of Rs 10 each of
PLL, the press note said. The Ashok Piramal Group has business interests in real estate, textiles, retail and engineering businesses. The group currently holds 72.60 per cent in
DMCL.
— UNI
Ind-Swift constructions Chandigarh:
The Rs 500-crore pharmaceutical major, Ind-Swift pharmaceutical group with facilities in Punjab, Himachal Pradesh and J & K, has entered the construction business by announcing its decision to build luxury apartments and penthouses in Zirakpur in the adjoining district of Patiala in Punjab. Its first project at Zirapur — Regalia Towers, Apartments and Penthouses is the group’s maiden venture into house construction. The company has floated
Ind-Swift Infrastructure and Developers with an equity of Rs 25 crore with a majority share contributed by group companies and promoters. The company plans to build luxury housing complexes in Gurgaon, Navi Mumbai in Maharashtra and in the vicnity of Chandigarh. Mr Jain said that the group plans to pump in Rs 50 crore in construction of residential apartments and penthouses in Zirakpur.
— UNI
Deutsche Bank arm to invest Singapore:
Rreef/DB Real Estate, a unit of Deutsche Bank AG, said it plans to start a global fund that will invest as much as $300 million in India to tap an expected surge in demand for property. The country will probably need 6.9 million to 9.7 million homes annually for the next 20 to 25 years, said Mr Venkateshwaran Raja, a senior adviser at
Rreef. He predicts more demand for commercial space as more companies rent than own offices. “We are excited about the housing sector, in the opportunities that lie ahead, with income levels growing and more people investing in their own homes,” Mr Raja said at an Indian Real Estate & Infrastructure conference in Singapore. Rreef said it might plan a second fund for India if it continues to see success in the investments in the country.
— Bloomberg
Pantaloon joint venture Mumbai: Pantaloon Retail India Ltd today said it would set up a mall management company in joint venture with CapitaLand Ltd, Singapore. The Board of Directors has approved the setting up a property division presently comprising of 19 malls.
— PTI |
|
Vaastu views If the steps leading to the entrance are damaged or broken, then the master of the house will face problems with his career and his expenses will soar.
|
.jpg)
.jpg)
.jpg)
.jpg)
The boom in real estate market is not showing signs of abating despite a hike in interest rate on home loans by about half a per cent early this month. Property prices have, in fact, appreciated by 60 per cent to 100 per cent over the past one year in most of the towns..jpg)
.jpg)
.jpg)
.jpg)
.jpg)