Chennai Metro Rail: Track work on Anna Salai underground line nearing completion

Chennai Metro Rail: Track work on Anna Salai underground line nearing completion

Laying of tracks in the underground section on the Anna Salai has reached the final stages.

Chennai Metro Rail Limited (CMRL) has floated tenders for the final finishing of track works from AG-DMS to Thousand Lights. The remaining 10km section of phase-1 between Washermenpet and AG-DMS is expected to be ready by December 2018.

While the laying of tracks has been completed, CMRL is now looking for a company to do finishing work on the downline for a stretch of 1.7km.

“Track work is still underway between Central Metro and Government Estate. We are likely to begin trial run by September,” an official said.

Metro trains are operated on ballastless tracks.

Construction of the stations and its entry structure is in full-swing between Government Estate and AG-DMS. One of the entry structures of stations Government Estate and AG-DMS is being integrated with the existing pedestrian subway.

Civil and track work between Washermenpet and Central Metro stations are nearing completion and installation of signal systems have begun.

U Tejonmayam, The Times of India, Chennai

Registration of properties may soon need Aadhaar

Property registrations in Tamil Nadu may no longer be facilitated without Aadhaar card as the state government is mandating the 12-digit unique identification number for the purpose. The move stems out of a recent fraud involving creation of forged Power of Attorney (PoA) for a plot worth Rs 4 crore at Madhavaram of a city-based resident currently residing overseas using impersonated identity proof with the alleged connivance of the sub-registrar.

Registration department officials told TOI a proposal has been sent to the government to make Aadhaar card compulsory for land registrations. “Once Aadhaar is mandated, people should provide their Aadhaar card as an identification proof. Our biometric devices would be linked to the Unique Identification Authority of India (UIDAI) central server to authenticate that the seller is the real owner of the property,” a registration official said.

It is learned that the proposal is in the advanced stage with the government as it has to amend the Tamil Nadu Registration Rules to make authentication through Aadhaar card for land registrations. Registration department sources said that mandating Aadhaar would help eradicate fraudulent registrations.

According to data available with the state government, Tamil Nadu has a 95% Aadhaar coverage. Of the 7.65 lakh population in the state, 7.27 lakh have Aadhaar cards. “In the cases, where people do not have Aadhaar cards, the procedures of the UIDAI would be followed to facilitate the registrations,” the source said.

In a recent case of fraudulent registration at Madhavaram sub-registrar office, a fake document was created in the name of the original owner of the 4,200 square feet vacant plot such that she has given the PoA to another person. “The forged PoA came to light when encumbrance certificate was applied to sell the property, whose market value is worth Rs 4 crore,” the official added. The case is under central crime branch police for investigation and an FIR has been registered, in which four persons, including George, the sub-registrar of Madhavaram, have been named as accused.

Yogesh Kabirdoss, The Times of India, Chennai

Chennai district likely to expand to 426 sqkm

Chennai district likely to expand to 426 sqkm mid-July

More than seven months after the state announced the expansion of Chennai district, the city’s boundaries are set to get wider by mid July. Areas falling under the purview of Greater Chennai Corporation would be part of the expanded Chennai district to facilitate better coordination between the civic body and district administration for executing various administrative activities.

Revenue department sources said that the procedure to elicit the view of officials on choice of district has been completed in Kancheepuram district. “Government servants have provided their preferred option to either work in Chennai or stick to Kancheepuram district,” a revenue official said. But, the process is still under way in Tiruvallur district. According to plan, 67 revenue villages from Alandur and Sholinganallur Taluks in Kancheepuram and Ambattur, Madavaram, Maduravoyal and Tiruvottiyur taluks in Tiruvallur district would be merged with Chennai district, taking the total number of revenue villages in the expanded city to 122.

Official sources said that the state is expected to make a notification regarding the merger of the urbanised neighbourhood revenue villages mid-July. “It is likely to be on July 15,” a senior revenue department official said.

This expansion would increase the size of Chennai from 176sqkm to 426sqkm covering all 15 zones of Greater Chennai Corporation. The city will have an additional revenue divisional officer from the existing two. The state had missed its April 1 target for issuing the notification due to delay in completing the task of getting the views of government staff working in these taluks on their preferred place of work.

Yogesh Kabirdoss, The Times of India, Chennai

Online registration of properties nets Tamil Nadu 19% more revenue

Online registration of properties nets Tamil Nadu 19% more revenue

There has been a 32% increase in the number of registrations of properties and documents and 19% increase in registration revenue in Tamil Nadu during the period from February 13, 2018, to June 20, 2018, when the registration process went online, over the corresponding period last year.

While the overall number of registration of documents went up from 6.43 lakh to 8.51 lakh, revenue increased from Rs 2,234 crore to Rs 2,660 crore during the last four months when the system went online. The hike in registrations is primarily being viewed as a positive fallout of computerisation of the registration process, introduced on February 13, 2018, said IG registration J Kumaragurubaran.

Among the sub-registrar (SR) offices that saw an exponential growth in revenue are Mylapore – Rs 39 crore to Rs 72 crore – and Saidapet I – Rs 54 crore to Rs 70 crore. In some sub-registrar offices, especially those in and around Chennai like Thiruporur, Anna Nagar, Ashok Nagar, Sembium, Saidapet I and Pallavaram, there is a considerable fall in the number of registrations after the online system was introduced. Developers are of the opinion that the fall in registrations in some sub-registrar offices could be owing to man-made glitches, aimed at showing that the online system was a disaster.

“We find a lot of resistance among SR office staff to the online system. Blaming poor net connectivity for the delay caused in registration of documents, the staff subject customers to untold hardships,” said a developer.

Computerisation of registration process has brought in automation on a large scale. Apart from online booking, even the back office operation is done online at present, said Kumaragurubaran. The department has engaged 500 data entry operators through a contractor to handle the additional workload like scanning images and documents, he said. “Introduction of the online system has increased transparency in administration and accountability of registration department staff. We are keeping a close watch on SR offices that perform below par and from where lots of customer complaints emerge. Wherever people are found wilfully delaying the procedures, strict action will follow,” said Kumaragurubaran.

Though the overall revenue trend looks positive, it is too early to project the growth for the financial year, he said.

The slashing of guideline values across the state a year ago could have played a major role in boosting real estate transactions and registration revenue, said Confederation of Real Estate Developers’ Association of India Chennai chapter Vice-President S Sridharan.

Source: Economic Times, Chennai

Demand for retirement homes in Chennai goes up

Demand for retirement homes in Chennai goes up

Chennai

There has been a sudden spurt in the number of enquiries for senior citizen homes in and around Chennai. The growing realisation that it would be better to relocate to a senior citizen community than living alone has been attributed to this surge in demand. Moreover, the number of developers who focus on retirement homes continues to remain limited. The demand from both residents and NRIs is predominantly from the affluent category. The demand for senior citizens homes has been estimated at 5,000 units in the city alone but only less than 10 developers are currently involved in development in the entire state of Tamil Nadu.

Availability of facilities, specifically food service and nursing care in case of emergency are major determinants. Fool-proof security, social infrastructure, ambience and neighbourhood are also tilting factors that nudge people to shift to retirement homes.

The market is predominantly driven by end users and price appreciation is not a major criterion for investing in a retirement home, said a developer involved in the development of such homes.

The sluggish growth in the sector has been attributed to the social stigma that society and relatives may demean the children if the parents shift to senior citizen homes. Delay in delivery is yet another reason as the time span to use the retirement home is short (around 10-12 years only) when compared to buying a regular home. Continuity of services for life by Retirement Community Management Company is cited as yet another reason for the tepid growth. This is because of unavailability of service provider in a retirement community that makes life difficult to live.

“We have come across buyers from the affluent class in the society in our project above SEC A class,” said Ramesh Kumar KAV, CEO & Director, Harmony Eldercare Pvt Ltd.  The retirement community home industry is evolving and will become one of the SBUs for all major real estate companies in a decade, he added.

According to Kumar, retirement home community is a hybrid product of real estate with essential features like facility management, food service and basic healthcare. Hence this has to be marketed differently from the regular real estate projects with trust and credibility as corner stones.

“Innovation is the key to boost the development as well as marketing,” say developers. Deferred management fee model may be adopted for acquisition of retirement homes wherein some part of the building cost will be paid upfront and remaining in a span of ten years. Banks should be involved by using reverse mortgage scheme to take care of increase in monthly maintenance charges due to spiraling inflation. Involvement of residents’ association and integrating with a larger regular residential gated community would further enhance the demand for retirement homes, according to industry sources.

Limited developers undertaking such projects is yet another reason for the surge in demand as stringent criteria are involved right from site location and neighbourhood amenities. Availability of good health care facility within a 5-km radius, good ground water, commuting facilities to nearby markets/temples, designing the buildings with features like same level flooring, wide doors for toilets, ramp at entrance, more lighting level in rooms, rounded corners for all walls, etc. are major criteria to be taken into consideration by the developers, said Kumar.

On the government front, it is felt that there is a need to encourage development of retirement homes by providing fiscal sops on the lines of affordable housing. One of the deterrents is GST. The rate of GST for construction of senior citizen homes should be at par with EWS housing schemes. Similarly, GST at 18% on services provided is very high, say developers considering the limited income at their disposal.

Source: V Nagarajan, Magicbricks Bureau

GST in Real Estate: Is one sector and one tax possible?

Ahead of the GST Council’s meeting on November 9 and 10, subsuming all real estate related taxes under GST is a major talking point. Here is a look at the nitty gritty of the same

NEW DELHI: The real estate sector is expected to feature in the November 9, 2017 GST meet. The government has been hinting that the sector can be considered to be brought under GST. Then all individual taxes would be subsumed into the GST. Or will it?

Practically, can all central, state and local taxes on real estate be subsumed into GST? The finance minister has implied that it can be considered and is expected to one of the major talking points in GST Council’s meeting on November 9 and 10. Real estate is unique because it is an immovable asset and is also bound by state laws.

What is Goods & Services: Under the Central Goods and Services Tax Act, 2017 (CGST Act), goods and services have been defined as:

  • Goods: Section 2(52) of the CGST Act: “Goods” means every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of land which are agreed to be severed before supply or under a contract of supply;
  • Services: Defined under section 2 (102) “services” means anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged
  • Schedule III of the CGST Act which states the activities or transactions which shall be treated neither as a supply of goods nor a supply of services includes “Sale of land and Sale of building”(except under-construction buildings which are deemed as supply of service) at Sr. no 5 of this Schedule.

Immovable asset

In real estate, since land is an immovable asset, the industry has been given a 33 per cent abatement on the 18 per cent GST. Therefore, the effective charge on the sector is now 12 per cent as against the listed 18 per cent. During the period of construction, when the developer collects money from the consumers, pays different vendors and service providers and gets the asset constructed, the under construction product is considered a service and therefore, comes under the purview of GST. It also gets input credit from many of the 267 allied industries. Once the input credit starts flowing in there would be clarity on how much the prices can drop by.

Anuj Puri, Chairman, Anarock Property Consultants Pvt Ltd, estimates that the quantum of input credit should come to roughly 2-3 per cent. Therefore, the effective GST impact should be 9-10 per cent. As it stands today, ongoing projects are in different stages of completion and the input credit may not all come back to the developer. However, if developers don’t pass on the input credit benefit to customers, it can be construed as profiteering.

GST can’t be applicable to land as it is an immovable asset and that is why there is an abatement of land value provided to developers in the GST on real estate. There is no GST levied on completed projects which are again considered immovable assets.

Sudip Mullick, Partner, Khaitan & Co says, “The Schedule III note implies that sale of land or buildings are neither goods nor services. If the Government decides to include land and building under GST, firstly, they will have to delete the entry from Schedule III and bring it under Schedule II which deals with activities which can be treated as goods or services.”

Other taxes like stamp duty and property taxes are local taxes and there is as yet no means of subsuming them. If the government decides to include real estate in GST then there has to be a way of compensating the states for this loss of revenue. With 12 per cent GST, 6 per cent stamp duty, 1 per cent land under construction, a labour cess and various other taxes, currently, the sector is already burdened with many invisible taxes. If all of them are subsumed into GST then the rate will have to go up.

Inflationary pressure

Niranjan Hiranandani, President Naredco (National Real Estate Development Council), says that GST has put inflationary pressure of 3.5 per cent on affordable and 5.5 per cent on ongoing luxury housing. “The underlying principle of GST was to keep it revenue neutral.” There are 31 or 32 taxes on affordable housing. No country in the world has such high taxation on affordable housing. He suggests that there should be no tax at all on affordable housing till 2022. Let industry get the input credits so that it becomes profitable and there is ample stock in five years to rationalize rates.

Hiranandani maintains that bringing real estate under GST will make the sector more transparent and hidden charges will come to the forefront.

Current tax rates

Getamber Anand, Chairman, Confederation of Real Estate Associations of India (Credai), estimates that taxes account for 10 per cent of the cost of real estate. Hiranandani says “About a third of the cost of housing can be attributed to taxation.” PWC estimates the tax burden @18 per cent. Essentially, the taxes are so many and varied across states, that one figure is difficult to compute today. Naredco has made a comprehensive list of taxes that are applicable to the sector. (see Box)

Stamp duty

Can stamp duties be subsumed in GST? It is a state tax and the total tax amount comes solely to the state. GST is a central tax and needs to be shared with the Centre. If this issue is discussed at the GST council meeting in Kolkata, then there has to be consensus among the states. Past High Court orders on stamp duty also need to be revisited.

Advantages

If GST is applied on land and immovable property, the buyer has to pay one tax at uniform rate across states (eg stamp duty varies state wise).

The industry benefits in the long run, if the timing is right. Prajakta Menezes, Principal Associate, Khaitan & Co says, “In the short term this sector is already grappling due to demonetization (purchases were deferred by buyers), RERA and GST. One more amendment may aggravate the shock in the short term.”

Implemented efficiently and effectively, one GST for real estate across the country is the way to go. How the states will agree to this and what changes have to be made to compensate them for loss of revenue remain subjects of debate. However, both, the industry and the consumer, seem to be beneficiaries of a more transparent way of taxation

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

New projects across budgets coming up in Egmore

Chennai

One of the older localities of Chennai, with a glorious past, Egmore is seeing many new projects across categories.

Who doesn’t want to a buy home of their own especially when you are a first time home buyer?

Vijayaragavan Shantharam from Chennai approached the Magicbricks real estate Forum asking, “I have been living in Dubai from the past three years and now I intend to come back to my mother land. Being born and brought up in Egmore, Chennai, I would definitely like to invest here preferably in a 3BHK apartment. Though my father has a 2BHK apartment in the same locality and I have no plans to shift to Chennai anytime soon, I would want to buy a home of my own. Please suggest if Egmore is a worth-investing locality? Help me understand more about the locality in terms of returns on investment and advantages of investing here.”

Why is it profitable to invest in Egmore?

There are a host of reasons to invest in the locality. Some of them are: Egmore, in Chennai, is not only a fully developed residential area but a commercial and retail hub too The Egmore Railway Station connects the locality to other parts of the city.

Several residential and commercial areas such as Chintadripet, Nungambakkam, Purasawalkam, Anna Salai and Chetput surround the locality. The National Highway 114 passes through the locality and ensures its connectivity to other areas. The state-run Metropolitan Transport Corporation (MTC) buses frequently pass through the locality and connect it within and with other parts of the city via road.

The locality also has a suburban train station on the Chennai Beach Tambaram railway line The Chennai International Airport is situated within 20 km distance and can be reached via the Trichy-Chennai High way and the Chennai-Nagapattinam Highway Trichy-Chennai Highway.

Mahant Rajan, an existing resident of the locality says, “Egmore is centrally located and has proximity to all commercial and retail establishments. The other advantage of the locality is its social infrastructure such as schools, banks, restaurants, markets, vegetable shops, grocery stores and other day-to-day requirements.”

According to Magicbricks, the locality has been rated as 4.7 out of 5 on the basis of buyer’s feedback for offering good environment to live, decent commuting facilities and the social and physical infrastructure.

The locality offers varied types of residential housing such as flats, plots, villas, builder floors and residential houses.

According to Magicbricks data, there are over 60 housing options to choose from. This does not include the upcoming projects. Let’s find the details of residences present in the locality.

Considering factors like availability of varied housing types, proximity to commercial and retail establishments and the affordable budget range, it is safe to say that Egmore is worth investing in.

Pushpa Rawat, Times Property, Magicbricks Bureau/Chennai