Registration of sale deeds to be banned in Tamilnadu

Govt. to get tough on unapproved buildings

Registration of sale deeds to be banned

The government has decided to ban registration of sale deeds for resale of unapproved buildings after December 21.

Any owner who fails to submit an application online for regularisation of unapproved buildings by December 21 will not be able to register the sale deed of such property after the deadline.

Power supply, water supply and sewer connections will be disconnected for such buildings.

Speaking at a public consultation, Housing and Urban Development Minister Udumalai K. Radhakrishnan urged residents to make use of new schemes to regularise unapproved buildings.

“The schemes will help the weaker sections of society who want to own a home,” said Mr. Radhakrishnan.

CMDA Member-Secretary C. Vijayaraj Kumar said approval for buildings would be checked by officials concerned before registration of sale deeds after December 21.

Self-declaration scheme

“Resale of no building will be permitted without proper approvals. This is a voluntary disclosure scheme. We trust the residents. It is also a self-declaration scheme. A large number of those who have a sanctioned plan but have deviated from it are expected to regularise their buildings. Buildings that do not have any sanction will also be regularised,” said Mr. Vijayaraj Kumar.

“For ordinary buildings, we will permit an FSI [Floor Space Index] of 2 under the regularisation scheme. The permissible FSI is 1.5. Minimum road width will not be required for regularisation of ordinary buildings. For special buildings, the minimum road width has to be 7 metre for the regularisation scheme. For continuous building areas such as Mylapore, George Town and Chintadripet, setback is not required for regularisation of unapproved houses. But commercial buildings in continuous building areas will not be regularised if the front setback is less than 1.5 metre,” said Mr. Vijayaraj Kumar.

“At least 90% of the buildings are expected to be covered under the scheme. Almost 50% relaxation in the FSI has been given for multistorey buildings. Relaxation of other planning parameters is expected to benefit many residents. We are also collecting feedback from stakeholders on the regularisation scheme. We will make changes to help the maximum number of residents. Residents need not worry even if their application is rejected. There is a provision for appeal also,” said Mr. Vijayaraj Kumar.

After the applications for regularisation of buildings constructed on or before July 1, 2007 are submitted online at www.tnbuildingreg.in, the officials concerned will screen the documents submitted and issue regularisation order for the buildings.

In the Chennai Metropolitan Area, the CMDA member-secretary will issue the regularisation order for special buildings, group developments and multistorey buildings. The Chennai Corporation Commissioner will issue regularisation order for ordinary buildings in the city. The commissioners of municipalities, executive officers of the town panchayats and the block development officers (BDO) of panchayat unions will issue the regularisation order for ordinary buildings in their jurisdiction. In other parts of the State, application for regularisation of multistorey buildings will be received by the DTCP.

For special buildings and group developments, the member-secretary and the deputy director of the DTCP will receive applications. For ordinary buildings, the BDOs of village panchayats or executive authorities of the urban local bodies will issue the regularisation order.

The number of unapproved buildings in the Chennai Metropolitan Area is estimated at five lakhs.

Unapproved layouts can be regularised online at www.tnlayoutreg.in. The last date for application is November 3, 2017.

The Hindu 

Model Tenancy Act – 11-month rent agreement in Tamil Nadu

Coming soon, 11-month rent agreement in Tamil Nadu

Realty, Real estate, Investment

Image used for representational purpose.

CHENNAI: Your rental agreement is set to undergo a sea change after Tamil Nadu implements the Centre’s Model Tenancy Act. Changes include the mandatory registration of all rental agreements over 11 months in period or `50,000 in value, advance amount to be limited to three months and tenant’s right to continue possession of the property after lease period to be limited to six months.

The rental agreements now cite the more than five-decade-old Tamil Nadu Building (Lease and Rent) Control Act, 1960, which will change once the new Act is brought in. As land — and thus rent — is a State subject, the central Act is a draft; it is up to individual States to adopt it. However, by making it a mandatory condition for obtaining funds for ‘Housing for All’ Mission under the Pradhan Mantri Awas Yojana, the Centre has managed to convince States, including Tamil Nadu to come on board.
The new Act has some key changes when compared to the existing State Act. Under the Model Tenancy Act, it is mandatory that all rental agreements that have a period exceeding 11 months or are valued at over `50,000 must be registered with the Registration Department under the provisions of Indian Registration Act.

The new Act is considered to be more beneficial for the landlords. Under the old Rent Control Act, there was no tenure for tenancy and evicting a tenant was highly restrictive. Previously, the stress was on the tenant’s right to occupation. However, in the new legislation, this right to possession is limited to only six months after the lease period.
This would prevent the misuse, including usurpation of property, of the earlier Act, said sources. Officials point out there are several cases where tenants refuse to vacate the premises, which then become aged, ill-maintained, and on the verge of crashing.

In another feature, if the landlord takes possession of the premises to undertake repair or reconstruction, the re-entry of the tenant is on the basis of a mutually-agreed new tenancy agreement. Earlier, the premises had to be offered to the same tenant.
Also, the new Act has the provision to renew rent at periodic intervals.
In one of the features advantageous for tenants, the new Act restricts the advance amount that landlords can collect up to three months’ rent. However, it is another matter that this is decided arbitrarily by the landlord, with some charging as much as 12 months’ rent as advance. Though the old Act limits advance to just one month, it is at least three months’ rent at all metros and other cities in India.

The earlier Act which was passed to regulate rents also gave powers to the government to take properties on fair rent, even against the wish of the property owner, if it was in the interest of the State. But senior officials feel the provisions are outdated for the present scenario, where a robust real estate sector is now supplying sufficient housing stock.
A big challenge for the regulator was to calculate ‘fair rent’ to be charged by the landlord. The fixing of rent depends on the land value, and there was a chance that it could be exploited by the landlord by charging exorbitant rent. The new Act will regulate rent as per the contract and safeguard tenants from extreme escalation due to rise in land value.

Sources indicated that all provisions of the Model Tenancy Act have to be covered by the lease agreement to be entered between the landlord and the tenant.
Meanwhile, the rent courts functioning under the provisions of Tamil Nadu Buildings (Lease and Rent control) Act, 1960, may be continued in the Model Tenancy Act, too, by re-designating them to function under the new act in order to save the loss of revenue to the government.

Source Indian Express

Construction at Kotur Gardens Kotturpuram Chennai

Construction at Kotur Gardens Chennai

Ongoing Construction at Kotur Gardens Kotturpuram Chennai. Project done by 360 Property Management Construction Division. +91 44 4212 0133

Real Estate Act Comes Into Force. How It Will Protect Homebuyers

New rules under RERA or the Real Estate (Regulation and Development) Act are applicable to residential and commercial development. Under RERA, realty developers and agents have to register with respective state regulatory authorities

New rules under RERA or the Real Estate (Regulation and Development) Act to regulate the real estate sector, protect home buyers and ensure the timely execution of projects with an aim to boost investor confidence and stamp out illegal practices will apply from today. They are applicable to residential and commercial development and make it mandatory for all projects and brokers to be registered with the real estate regulator who will oversee transactions and settle disputes. Only seven states have, however, moved to implement the new rules as yet.
Here’s your 10-point cheat-sheet:
  1. RERA is a model law, which means the Centre can recommend it but it is up to the states to formulate and pass their own laws, since land is a state subject.
  2. Till last weekend, only six states had notified the rules – Uttar Pradesh, Gujarat, Odisha, Andhra Pradesh, Maharashtra, Madhya Pradesh and Bihar. The Housing Ministry had last year notified the rules for the five Union Territories and for the National Capital Region of Delhi.
  3. The Centre has described RERA as the beginning of a new era where the consumer will be king. Union housing minister Venkaiah Naidu said rights and obligations of buyers, developers and real estate agents are clearly defined in the Act and any aggrieved party can seek redressal for violation of terms of agreement by the other party.
  4. On reports that some states have diluted key provisions of RERA, Mr Naidu said that the states have assured his ministry that these will be corrected.
  5. Under RERA, real estate developers and agents have to register with their respective state regulatory authorities by July 30. They must also deposit 70 per cent of the funds collected from buyers in a separate bank account to be used only for the construction of the project, to ensure timely development. New projects must have all approvals before launch.
  6. Promoters must have the consent of two-thirds of the buyers in a project before making any change in the number of units or other structural changes. RERA prescribes penalties, including imprisonment on developers who delay projects or do not deliver on promises. Developers are required to disclose their project details on the real estate regulator’s website, and provide updates on construction progress.
  7. RERA also states that any structural or workmanship defects brought to the notice of a promoter within a period of five years from the date of handing over possession must be rectified by the promoter. For delayed possession, developers need to pay an interest rate of 2 percentage points above State Bank of India’s lending rate.
  8. RERA also prescribes imprisonment of up to three years for errant developers. A developer can sell only on the basis of carpet area which will help home buyers understand what they will be paying for each square foot they will get for use.
  9. In the last few years, sluggish economic growth and delays in getting approvals stalled several projects, leaving buyers waiting for their homes and developers holding high debts. It also put a strain on investors such as banks, private equity firms and non-banking financial companies.
  10. Analysts say the real estate sector will be able to attract higher institutional funding as the Act will bring in much desired transparency in the sector, which contributes about 9 percent of India’s gross domestic product, boosting buyer confidence.

Source : NDTV

out-of-the box developments in the real estate industry

Flex it!

Homes that can transform as per the requirements of its owners might have seemed like a dream up until a few years back. But with the concept of flexi-homes catching up that is no longer the case.

Cities are expanding at an unprecedented rate by the day.

But surprisingly, spaces seem to be shrinking. To address this growing concern, there have been a number of out-of-the box developments in the real estate industry over the years. And the concept of flexi-homes seems to be the top contender in the race.

Like the name suggests, flexi-homes are homes that provide innovatively designed living spaces which enable home owners to alter and customise internal layouts like floor plans, sizes of rooms and other architectural elements, depending on their needs. According to Siddhart Goel, senior director, research services, India, Cushman & Wakefield, the trend has caught on in India and is likely to grow in the future. “Earlier, customers hardly had a say when it came to home buying. They had to accept the designs offered by the builders and after possession and customise their homes at additional costs. These costs would often mount up to quite a lot and would also take up months of their time, plus the added inconvenience. The advent of flexi-homes helps them save on both these elements,” he says.

For developers who offer such projects, this is a win-win scenario since a niche segment like this not only helps them stay ahead of their counterparts but also brings in more customers, especially from the HNI segment where customers give high priority to the options available to them in terms of how they want their house to be. Flexible interiors use both architectural elements as well as innovative furniture to incorporate multiple uses. Spaces that can extend like a collapsible wall that make extra room when you have company over or bed rooms that double up during the day, flexi-homes are catering to home buyers seeking living spaces to suit specific spatial needs, together with the right ticket size, social infrastructure, connectivity and amenities.

“Evolving customers are interested in adaptable homes that can meet changing spatial and privacy requirements over time while repurposing spaces to suit multiple utilitarian requirements. For this, homes need to be designed smartly so as to use all available area efficiently. At the same time, interiors, including furniture, should be planned intelligently, in order to facilitate flexibility and utility within smaller unit areas,” says Vivek Sharma, business head, Mahindra World City, Chennai.

Expandable homes have the advantage that the customer is able to invest in spaces in the preferred residential communities of their choice and later, according to future requirements, add to the existing layout. “The construction plans of such homes are required to provide, in advance, the specific structural details and specifications needed to easily accommodate subsequent additions with the least amount of disruption to daily family activities and limited retrofitting of the existing building,” adds Sharma.

For the home owner, these flexi options have given the word ‘space’ a new meaning altogether. One that can be altered and transformed whenever required and often in a matter of minutes. “Investing in a home is a big step. It will definitely make a big difference in buying trends if even a compact residential unit can meet multiple needs. Young families usually do not need a lot of space. But in the future, additional space will become a necessity and having an expandable home eliminates the hassles of selling the existing home and relocating to a larger place,” says Avantika Prabhu, an IT consultant. The concept of both these options together might seem a little farfetched in the current scenario, but with many developers toying with the idea, one can hope that it will soon be a valid option.

Source – Divya Menon, Times Property, The Times of India, Chennai

Rent from residential premises may be exempted from GST | 360 Property Management

Govt seeks powers to levy GST on all rental income

HIGHLIGHTS

  • GST unlikely to be impoised on individuals renting out homes
  • Currently, service tax is levied on rental income from commercial property only
  • GST rate on housing is expected to be pegged at 18%

Rent from residential premises may be exempted from GST.

Rent from residential premises may be exempted from GST.
The government is arming itself with powers to levy goods and services tax (GST) on all rental income but is unlikely to impose the tax on individuals renting out homes. Currently, service tax is levied on rental income from commercial property, but not levied on residential property.

The Central GST (CGST) Bill — one of the four legislations introduced in Parliament — provides that any lease or letting out of the building, including a commercial, industrial or residential complex for business or commerce, either wholly or partly, is a supply of services.

Waman Parkhi, a senior tax consultant at KPMG, however, said that in the final rules, the government may exempt residential rental income from GST. The government has introduced the bill which will be followed by detailed rules where exceptions and exemptions are likely to be built in, he said. If the existing system of not taxing rental incomes from residential property under service tax has to be continued, then the same provision of exemption has to be introduced in GST too.

“Any law has to be read with the rules. It should not be seen in isolation,” said MS Mani, senior director at Deloitte. He said that at best the government can impose GST on residential property taken on rent by companies, which can then use it as a tax credit. In any case, GST kicks in at Rs 20 lakh and only some residential property fetches that kind of annual rent.
GST, which is likely to be rolled out from July 1, will subsume central excise, service tax and state VAT among other indirect levies on manufactured goods and services. A senior urban development ministry officer clarified that GST will not lead to any additional tax on end-users. He said finance ministry has already accepted it inprinciple.GST rate on housing is expected to be pegged at 18% with a final decision expected to be announced over next few weeks. Developers and tax experts said this rate will be acceptable to all the stakeholders as it will not lead to any increase in the final price of property. CREDAI president Getamber Anand said that at present the levy is around 12% of project cost paid as excise and Vat. In addition, at the time of sale, buyers pay around 6% of the price as service tax and Vat. So, the total net outgo is around 18%.

At present, while levying service tax on constructed house, an abatement of 60% of the total value is allowed to exclude the value of land and other goods such as bricks, cement and other material from the ambit of service tax. But under the new regime, a consultant said, this would not be required.

Affordable housing is exempted from service tax. To pass on current benefits to buyers, Parkhi said that GST on the ready to move-in houses in the affordable segment will have to be pegged at zero. The GST Bill has also clearly defined that the tax will not be levied on sale and purchase of immovable property like land, house and other real estate assets, which are not under construction.

Tax incentive on second home misused, won’t extend it beyond Rs 2 lakh: Govt

Tax incentive on second home misused, won’t extend it beyond Rs 2 lakh: Govt

HIGHLIGHTS

  • The Finance Bill 2017 restricts set-off of loss towards second home against other heads of income up to Rs 2L under Sec 71 of the I-T Act
  • Currently, there is no such limit for set-off of loss from house property, which is mainly the difference between the rental income and interest on home loan

Representative image.

NEW DELHI: Ruling out rollback of the proposal to restrict tax incentive for second home+ to Rs 2 lakh per annum, revenue secretary Hasmukh Adhia on Saturday said there is no point in subsidising purchase of second property by those who have surplus funds.

Moreover, he added that the tax incentive for second home loan borrower is being “virtually misused.”

Citing limited resources, he said it is prudent to subsidize first-time buyer and not the second property owner who is not staying in that but earning income from the second unit.

The Finance Bill 2017+ has restricted set-off of loss towards second home against other heads of income up to Rs 2 lakh under Section 71 of the Income Tax Act.

Under the present dispensation, there is no such limit for set-off of loss from house property, which is mainly the difference between the rental income and interest on home loan. In other words, a buyer could deduct the entire net interest paid on the home loan.

“Government resources are very very limited. The question is should the government be subsidizing first-time home owners who are occupying own house or should the government be subsidising the second acquisition of the property by people who have got surplus money to invest in real estate,” Adhia said while addressing industry representatives here.

He cited an example: “If I have already my own house, I buy a new property by taking a bank loan of Rs 1 crore, the interest on it is Rs 10 lakh per annum and I rent it out to somebody who gives out Rs 3 lakh as rent, the remaining Rs 7 lakh you could offset against your salary income or business income.”

The loss to the government for the second house were almost one third of that, he said, adding that it came to about Rs 3 lakh in addition to Rs 2 lakh advantage.

“So, why should the government bear the cost of second house acquisition, that was the question. We have a lot of people to be given affordable housing, we need to help them out… so the revenue loss was huge and people were virtually misusing it,” he said.The Finance Bill, 2017, proposes to restrict such set-off of house property loss to Rs 2,00,000 per annum only. Balance loss, if any, will be carried forward to be set off against house property income of subsequent 8 years.
Hence, individual tax payers having loss of more than Rs 2,00,000 will now have a higher tax outgo.

 “In line with the international best practices, it is proposed to insert sub-section (3A) in the said section to provide that set-off of loss under the head ‘Income from house property’ against any other head of income shall be restricted to Rs 2 lakh for any assessment year,” the Finance Bill 2017 said.

“However, the unabsorbed loss shall be allowed to be carried forward for set-off in subsequent years in accordance with the existing provisions of the Act.”

Timesofindia