GST relief for low-cost homes, 1st-time buyers
- The tax benefit will also be extended to an affordable housing project, which has been given infrastructure status.
Under the CLSS scheme, a first-house buyer with a household income of up to Rs 18 lakh per annum can avail a benefit of up to Rs 2.7 lakh while buying a house or apartment of up to 150 square metres (1,615 sq ft) carpet area.
Those who do not qualify for credit linked subsidy scheme (CLSS) will continue to pay GST at 12% for the same house. The tax benefit will also be extended to an affordable housing project, which has been given infrastructure status, in case the maximum unit size in the project is a carpet area of 646sq ft. The first-house condition on the buyer will not be applied in this case. Whether or not the buyer gets the CLSS benefit under PM Awas Yojna, GST will be levied at 8%.
“The decision will give a push to the real estatesector, particularly affordable housing, as prices will fall by up to 4%,” said Getamber Anand, chairman of the Confederation of Real Estate Developers’ Association of India (Credai).
The cap on the size of housing unit to avail of the benefit under CLSS has been kept at 1,615sqft carpet area, which is equivalent to around 2,200sq ft built-up area. This would cover most three-bedroom apartments and houses in the country and particularly in metro cities, said Anand. The Rs 18 lakh cap on household income is also sufficiently large to cover most first-time house buyers. But those buying their second house, or more, would not be able to avail this benefit. NAREDCO vicechairman Parveen Jain said the decision would prove a boon for the masses and fuel rapid growth and development of the real estate sector, furthering the cause of ‘housing for all by 2022’. Developers pay GST on inputs used for the construction of a project. Under GST, taxes paid on the inputs are taken back as credit from the GST paid by the buyer. Input taxes on construction amount to around Rs 400 to Rs 500 per sq ft.
The Victorian theme lends a grand look to the interiors of your home. For a sophisticated and classic look, opt for the Victorian theme for your home decor. This theme can be infused in several doses to impart opulence in layers in the various areas of the home.
The Victorian look can, at times, appear heavy because of a profusion of trimmings and fuss, but a contemporary twist can also make it suitable for modern living.
You can begin with designing a stunning Victorian living room with arched windows and doorways, and double height French windows with heavy teak wood panelling. Keep the walls uncluttered. Instead of having a number of paintings, opt for a single one along with an antique wall clock, accentuating the look of the polished wood.
Use rich, jewel-toned colours to accessorise, such as strong blues, deep reds and rich greens. Opt for floral prints for your wallpaper and for sofa upholstery.
In the Victorian theme, furniture should be of mahogany or teak, with ornate carving and tables with marble tops. Use round or oval backs for your chairs.
Even standard decorations are done in excess here, be it the fabrics reflecting elaborate patterns, walls covered with intricate and vibrant textures, large flowers in dark colours, or curtains the décor exudes extravagance that typified the era rich, heavy, and opulent.
Some of the characteristic features of this style are marble faux fireplaces, large chandeliers, heavy mirrors, stained glass and chinaware. These can be easily adapted to feature in a modern home.
Victorian picture frames are a great way to make the walls of your room look elegant. They can magically transform any corner. Victorian pictures frames are mostly of brass with varying finishes. Antique finish, copper finish and silver finish are some of the popular finishes for a frame.
Lampshades are elaborate, with brass and etched glass fittings. Glass featured elsewhere too in the form of decorative stained glass used as panels on front doors as well as for windows. Collections of antique dolls impart are very Victorian.
Light up with Tiffany-style lamps, wrought iron or brass chandeliers and even heavy candelabra.
The living areas can have large vases with floral arrangements and plant stands with potted palms. Grecian busts and statues also go well with this theme.
For your bedroom, furnish it with huge pieces of furniture and beds with elaborate canopies or huge head and footboards. Opting for chests and almirahs that are large and ornately carved will complete the look.
Source: Times Property, The Times of India, Chennai
This fourth quarter, however, saw a massive slowdown in real estate sales in Chennai with a 55% drop in housing units sold year-over-year.
In Q4 of 2016, only 757 units were sold compared to 1,673 units in the same period the previous year. Number of project launches in the city fell to 58 from 93 in the year ago period.
“Demonetisation has definitely impacted sales in Chennai. The cash crunch along with cyclone Vardah were a downer when it came to people taking decisions on property,” said Sridhar Srinivasan, managing director, Chennai, Cushman & Wakefield.
However, this is part of an overall trend in Chennai real estate market, which got exacerbated with the cash ban. For instance, the fourth quarter of 2013 saw a high of 2,554 units being sold. After which there has been a decline to 1,629 units in 2014 to 1,673 in 2015.
However, Cushman & Wakefield expects the phenomena to be temporary and won’t last beyond the new two quarters.
As to the “cash” or “black money” component of real estate sales, Srinivasan said this has not impacted mid-segment sales. “Middle-level housing units have seen a high impact. The high-end and luxury segment, which use a higher component of cheque vs cash, saw lesser impact. We are expecting this trend to continue for the next two-three quarter,” he said.
Mid-level housing units saw a 21% dip to 662 units in the fourth quarter of 2016, compared to 840 sold units in the comparable quarter last year. High-end units, however, saw sales nearly double to 91 in Q4, from 49 in the year-ago.
Another reason as to why transactions are being hit is because of stamp duty and registration fee that need to be paid at offices. Given the role of the “cash” component in property deed clearances, demonetisation has definitely thrown a wrench in the works.
For the full-year, the number of projects in 2016 dipped 24% to 57 from 75 last year. The number of housing units also dipped 21% to 6,419 from 8,174.
Developers are now ready to find the right tenant for your flat, and deposit the rent into your account
The first bother of an investor is the management of the unit purchased, be it finding a tenant or maintaining an unoccupied residence. This issue can significantly impact investor demand, dipping sales in an increasingly tight real estate market. Considering the current trend of post-sale property management, it can be seen that developers are addressing this issue.
As part of marketing strategies, high-end developments offer to handle the rental segment of the apartment or villa, where end-to-end solutions of finding a tenant, completing the documentation and due diligence, taking over the unit maintenance during the rental period as well as post the unit falling vacant, are provided. These facilities are handled by a separate department dedicated totally for this function, assuring the potential buyer of hassle-free management of the purchased unit.
Jitendra Jagadev, Co-Founder & Managing Director, NestAway, a Bangalore-based project, says “The objective is to provide a steady source of income to home owners besides offering quality maintenance.” The service offer includes a rental default guarantee where the owner is assured of timely rent even in case of a default. Jagadev claimed that the rental fixed by their group would be 1.3 times the average rental prevailing in the selected location, thus offering a significant return to the home owner.
Big help for NRIs
Om Ahuja, CEO-Residential, Brigade Group, says, “Investors such as NRIs are totally dependent on friends and relatives for renting their units and maintaining them during the rental period and when the premises is vacated. Offering this service eases the burden besides giving them the confidence and assurance of the purchased units being taken care of.” He added that, with markets fast evolving, there is likely to be more organised players emerging in this service segment.
Stating that every real estate development involves four aspects — the sale of units, maintenance, rentals, and resale —K.R. Raghavan, President-Sales, Ozone Group, says that these segments need to be addressed effectively to ensure effective marketing. “Most investors are either NRIs or those may not be residing in the city. And even if they do, they may prefer to have their properties managed, be it rental or maintenance. Offering such services can make purchases more attractive.” According to him, the Ozone Group had a scheme that assured a two-year rental at the time of possession of the unit. “Now we have a team that will find the right tenants, handle the documentation and the rental deposits. Besides the maintenance services for the rented units, we offer similar services for units that are not occupied, relieving the buyer the hassle of maintaining an unused unit.”
Given the potential marketing opportunities and impact on demand such services open up, this would emerge as a leading marketing strategy for developments in the coming years, he adds. “It is a win-win situation for both as it offers an assured, hassle-free income stream for the buyer while providing the seller an avenue for service and revenue even after sale.” Snehal Mantri, Director-Marketing and HR, Mantri Developers, says, “We have been offering property management services to our NRI customers for the last 15 years, which includes rentals and resale. This facility is offered to residents in India too on request. Here, not only renting of the units is taken care of, but also the property management, the documentation process, and on the lease getting terminated, a new tenant is found.”
If such services become the prevailing trend in future, investing in real estate may once again become a very attractive, yet hassle-free proposition, inducing a greater fund movement into its domain in the coming years.
It is a win-win situation for both as it offers an assured income for the buyer while providing the seller an avenue for revenue even after sale.
Source The Hindu Property Plus
Not everyone is out looking for a house that will give them steady returns. Some just want a house that is big and comfortable. Of course, scope for capital appreciation or high rental yield is always a welcome add-on. A majority of home buyers are either looking for affordable properties or price correction. If you are actually looking for a house that suits your particular lifestyle and priorities, keep in mind that certain areas cater to a certain style.
While Anna Nagar (E) is an established residential locality, the western part of this locality is fast catching up. Relatively lower land cost in Anna Nagar (W) plus a healthy supply of new properties has led to this locality catching up in the residential market.
Abdur Ravoof, former president, National Association of Realtors and proprietor at Green Global Realty says, “In what remains of the eastern side, most properties are going in for re-development and the new properties preferred here are flats for the convenience they lend.”
Therefore, while the east is in for re-development of properties, Anna Nagar (W) has a reasonable supply of new properties. Average prices are in the range of Rs 8,000-11,000 per sq ft.
Oragadam is perfect for the budget conscious. The area has shed its identity as a fringe location. While Oragadam was always known for its small industries and a large supply of plots, trend watchers say that the sky line seems to have attuned itself to the modern lifestyle. Rajesh Alagusamy, broker, City Side Properties says, “Oragadam only came across as an industrial, manufacturing growth corridor. With time came automobile and IT giants such as Ashok Leyland, Toyota, Apollo Tyres, Renault Nissan, Moserbaer and more. This led to a healthy demand for housing projects.”
“Inter-connectivity is also an added boost for small investors and businessmen coming from Kanchipuram, Madurai and other parts of Chennai. Proximity to the Chennai-Bengaluru Highway as well as NH-45 gives it an added reason for this locality graduating into a popular South Chennai residential pick,” says Vinith Ganeshan, an individual consultant in the city.
Realtors feel that with enhanced rail connectivity, widening of state highway-57, upcoming logistics park and dedicated job markets may push realty even more.
Perungudi is for those who lay importance on value-for-money options. The area might have scaled a slot or two considering that basic amenities are getting a facelift here. “Well-developed localities like Nungambakkam and Adyar have fairly monitored sewerage and drainage lines. We are hoping that Perungudi will follow the same path. With almost 80 percent of sewerage connection completed and water connections starting soon, real estate is sure to get a boost,” says Ganeshan.
Sources have also pointed out that civic authorities have realised the need to have wider roads than construction of flyovers. Therefore, in addition to Valluvar Kottam and Kodambakkam High Road, Annai Nagar in Perungudi is also expected to get wider roads. Perhaps, development activity is what led Perungudi to feature in the top preferred areas for rental accommodation in Chennai. Average values range from Rs 5,500-7,000 per sq ft.
In Chennai, Nungambakkam is a well-known locality. Nungambakkam’s popularity is vested in the fact that it is strategically located close to T Nagar, Mount Road, Kodambakkam and the like. Jaganathan Manikanthan of Prime Property says, “An NRI with Chennai roots is always interested in having a property in his own city. Therefore for most NRI’s Nungambakkam is a hotspot. Besides basic amenities, the locality boasts of well-settled families. The area is also close to some prestigious colleges and if you happen to be an investor, there are sizeable rental returns as well. The area also has parks for seniors and children.”
Prices are in the range of Rs 12,000-17,500 per sq ft and re-development has led to an increase in the housing supply stock.
Source Sneha Sharon Mammen, Times Property, Magicbricks Bureau/ Chennai
Repatriation of home sale funds from India
We live in an age where many youngsters go abroad for higher studies or job and have already settled down in other countries. Many of them are citizens of another country and have only family/ancestral ties to their homeland – India.
The other side of this situation is that the aging parents who are still in India must fend for themselves and find it easier to live in gated communities or in senior citizen homes to have easier access to immediate medical care, companionship, safety and help with errands.
As a result, many of the older generation are selling off independent homes and moving into such gated communities/senior homes. It goes without saying that a substantial portion of sale proceeds is willed to their Non-resident Indians (NRI) children. Sometimes, ancestral property is also received by NRIs by way of partition deeds or gifts from parents or grandparents and they prefer to sell the property and repatriate the funds.
Most NRIs who have settled down abroad would like to repatriate these funds from sale proceeds. It may be of use for the education of their children or to buy a property in their adopted homeland.
Additionally, with most countries tightening up on foreign investments and related reporting, it has become a hassle to maintain accounts and property here and then report the same to tax authorities in both countries.
Residents of the U.S. especially face this dilemma as they are required to report every year details of their foreign financials assets held in excess of certain prescribed dollar limits.
Thus, it is essential to be aware of the formalities involved in repatriating funds abroad from India as such repatriation leads to movement of forex and is governed by RBI and FEMA regulations.
General permission is available to the NRIs or Person of Indian Origins to repatriate the sale proceeds of immovable property inherited from a person resident in India.
The NRIs/PIO may repatriate an amount not exceeding USD one million, per financial year, on production of documentary evidence in support of acquisition / inheritance of assets, an undertaking by the remitter and certificate by a Chartered Accountant in the formats prescribed by the Central Board of Direct Taxes.
The sale proceeds of immovable property acquired by way of gift/inheritance should be credited to NRO account only. From the balance in the NRO account, NRI/PIO may remit up to USD one million, per financial year, subject to the satisfaction of Authorized Dealer and payment of applicable taxes.
The capital gains tax is also payable in their country of residence though they can avail credit for the taxes paid in India.
Breaking ties with the homeland is never an easy task, no matter how green the grass may be on the other side. Questions of inheritance, sale and repatriation of funds only add to the confusion.
G. Karthikeyan, Coimbatore-based Chartered Accountant.
Source: The Hindu
R Venugopal (name changed) is among several building owners in the city who have had to unknowingly pay extra money under the garb of `property tax’ to civic officials. “I did not have any idea about property tax rates. There was also no information on the corporation’s website. But I later learned that my neighbour was paying less per square foot, than I was paying,” Venugopal said.
But with Corporation of Chennai uploading a street-wise property tax rate of the city’s 15 zones on its website, corrupt officials will now find it hard to fleece citizens by demanding extra.
There have also been allegations that the civic body’s tax assessors accept bribes to lower assessment of properties. The property tax rate of buildings in different areas varies to a great extent and in the absence of a facility to cross-check the rates, many owners, until recently, were forced to grease the palms of officials.
For instance, the property tax rate for residential buildings varies from 40 paisa per sqft (Sholinganallur zone) to Rs 4 per sqft (Thiruvottiyur zone), while the rate for commercial buildings ranges from Rs 2 per sq ft (Manali zone) to Rs 11.25 per sq ft (Madhavaram zone).
V Gopalakrishnan, an RTI activist and resident of MGR Nagar, said several residents had approached him with complaints.
“Many civic officials tell residents that they can lower property tax if they bribe them. There are several buildings owners who pay residential rate for commercial properties, which results in a huge loss to the corporation,” he added.
For instance, he said a building owner in his neighbourhood, who owns property of 1,600 sqft, pays only for 800 sqft after bribing the officials. “Most people don’t lodge complaint as they don’t want to pay higher tax to the corporation,” he said.
A corporation official said citizens could now see the property tax rate of each streets by clicking `Property Tax Payment’ on the corporation’s website and selecting `Street Rates.’
“We will also conduct surprise inspections of households to check if there are any discrepancies in the property tax assessment. Action would be taken against those involved in malpractices,” he said.
Officials said residents could also fill out a self-assessment property tax form online and calculate the tax rate. The civic body will, however, verify the forms and will impose a fine on those who have paid less tax. Meanwhile, the civic body has also published the list of property tax defaulters on its website.Mobile phone numbers of zonal assistant revenue officers are also available on the website.
The civic body collected a record Rs 581.82 crore as property tax in 2014-15. The corporation had even faced criticism for employing transgender people to shame defaulters. The number of taxpayers increased from 6.5 lakh to 10.82 lakh, after the city’s expansion in 2011.
Christin Mathew Philip, The Times of India, Chennai
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