Maharashtra finally clears way for drop in stamp duty on real estate sale

MUMBAI: Homebuyers could expect some relief as the state government has introduced a provision that will allow reduction of Ready Reckoner (RR) rates. Until now, RR rates, which are revised annually, could only be increased or kept steady. 

RR rates are used to assess market value of properties by government; stamp duty and registration charges are paid on this basis. The rates are revised every year on April 1. 



The state revenue and forest department has issued the Bombay Stamp (Determination of True Market Value of Property) (1st Amendment) Rules, 2018 that will allow the Chief Controlling Revenue Authority (CCRA) for the first time to either increase or decrease the RR rates.

The March 12 notification amends rule 4 that says in case the CCRA cannot issue an annual statement of rates then the preceding one may be “incremented” in view of “increase” in market rates. The word “incremented” has now been replaced with “revised” and “increase” with “increase or decrease”. The change in the wording signals the government’s acceptance of the fact that real estate rates have dipped in recent years.

Mumbai is divided into 700 zones for which RR rates are prepared annually. In the last five years, rates for these zones have been increased by 6-7% annually. However, it was not always so. In 1995, 1996, 1997 and 2001, the government, despite there being no amendment, had reduced the RR rates. 

Commenting on the latest change in rules, property valuers said RR rates need to reflect true market value. Mayur Shah, president, Maharashtra Chamber of Housing Industry, said they have been urging the government to reduce the RR rates as the real estate industry has been in a bad shape for the past three-four years. 

Shah said CREDAI-MCHI is considering recommending a 20-25% reduction in RR rates. “Earlier, rates were only increasing. Now that Maharashtra, like other states, has a provision to decrease the rates, housing will get a boost,” he said.

The increase or reduction in RR rates impacts buyers in a significant way as the 5% stamp duty is to be paid as per RR rates; in some cases, the actual sale may have taken place at a lower rate. 

Sunit Gupta, a property valuation expert, said the RR rate for Nariman Point, for instance, is Rs 50,000 sq ft while the market rate is Rs 30-35,000 per sq ft. “Also, builder and buyer have to pay income tax based on the RR rates and not the market rate,” he said.

It is the joint director of town planning and valuation who annually assesses rates of lands and buildings for every tehsil, municipal corporation and local body area and prepares a statement. The CCRA then approves these rates and they come into force. 

Source: Economics Times

Re-Development of Maharashtra housing authority colonies may get a boost.

Redevelopment of incapacitated provinces of the  Maharashtra Housing and Area Development Authority  (MHADA) is required to get a lift, with the express  government’s most recent draft warning proposing to permit  designers pay either a premium or offer lodging stock to the  specialist for activities spread over under 2,000 sq meters.

MHADA may permit improvement of such tasks by charging  a premium from the engineers and without demanding a  share of the lodging units, the express government’s draft  warning said. Be that as it may, for redevelopment of  provinces spread over more than 2,000 sq meters, designers  should give prepared lodging stock in these ventures to get  consent.

ET had in June provided details regarding the move to offer installment adaptability to designers so as to push the redevelopment of flimsy structures in MHADA provinces. Government-run MHADA had sent a proposition on this to the state government.

Mumbai has 104 MHADA formats, of which structures in 56 states are decrepit. The majority of these are spread over under 2,000 sq meters — so the move will help in the redevelopment of these provinces.

Until 2008, MHADA used to charge a premium for no-complaint declarations and extra FSI for redevelopment of weather beaten settlements.

In April 2013, Maharashtra government expanded the floor space record for MHADA structures to three circumstances from two-and-half circumstances on the whole format.

Real Estate, Housing Finance Stocks Gain After PM Modi Announces New Schemes.

Shares of some lodging account organizations and land organizations were in concentrate on Monday after Prime Minister Narendra Modi on Saturday declared new plans to support the lodging part.

Shares of Repco Home Finance rose 3.4 for each penny, Indiabulls Housing Finance 0.65 for every penny and Gruh Finance 2.2 for every penny in a generally powerless market.

V Raghu, official chief at Repco Home Finance, told NDTV that PM Modi’s declarations will positively affect lodging money organizations. He was idealistic that the negative effect from demonetisation will get turned around from the new money related year, beginning April 1.

The normal advance ticket size of Repco Home Finance is Rs 13 lakh, he included. In the primary portion of this monetary year, Repco’s credit book had grown 24 for each penny.

In his deliver to the country, PM Modi said home credits in urban regions up to Rs 9 lakh and Rs 12 lakh will get intrigue subvention of 4 for every penny and 3 for each penny, separately. Additionally, in country zones home advances up to Rs 2 lakh will get intrigue refund of 3 for every penny.

The quantity of houses being worked for the poor in rustic ranges under the Pradhan Mantri Awaas Yojana is being expanded by 33 for every penny, PM Modi included.

Mr Raghu of Repco Home Finance said that the administration’s pushed on ease lodging opens new open doors for lodging fund organizations.

Many banks, including State Bank of India (SBI) have likewise cut their loaning rates, which will likewise cut down the cost of assets for lodging account organizations.

Land stocks were additionally for the most part higher as investigators anticipate that lodging action will go up on lower loaning rates. DLF and Unitech were up 3-5 for each penny. Among other land stocks, Kolte-Patil Developers surged 5 for every penny while Ansal API picked up 10 for each penny.

Home costs may go up by 20% post demonetisation, says developers’ body Credai.

BENGALURU: Realtor’s body Credai said land costs has an opportunity to ascend by around 20% in the following one year post demonetisation as manufacturers go moderate on new dispatches, presentation of the new administrative bill and higher info cost.

New dispatches are required to become scarce quickly as real estate agents embrace a hold up and watch approach and clients envision a further drop in lodging costs. The circumstance will be disturbed as new endorsements will be moderate and developers should be more agreeable with the Real Estate Regulatory Act (RERA) which becomes effective one year from now.

“The possibility of a drop in lodging costs by around 20-30% is unrealistic. Manufacturers, at any rate in Bengaluru, are taking a shot at skinny PAT (benefit after expense) edges of 8-10%. There is no extent of further decay,” Credai administrator Irfan Razack said on Friday.

Razack, who additionally heads Prestige Estates, included that lodging costs have stayed discouraged in the most recent couple of years and have not stayed aware of expansion. “The main course at costs is to travel north in light of the fact that there will be an imperative in supply because of less dispatches.”

Engineers have gone moderate on dispatches in the most recent couple of years as deals stay drowsy, stock heaps up, obligation levels achieve disturbing extents and shopper feeling stays low. The sum total of what these have been a delay a part which contributes around 7% to India’s GDP and is the second greatest boss after agribusiness.

“The RERA will put a great deal of disorderly players out of the market as they won’t have the capacity to begin any venture before they have every single imperative endorsement with them. In addition endorsements have been moderate and info cost, including work cost, is set to go up,” said Razack.

He, in any case, conceded there will be a minor value amendment in the prompt consequence of the administration’s choice to scrap Rs 500 and Rs 1,000 as legitimate tenders. “The customer notion has obviously turned negative however it might bring about a drop in cost by around 5%, nothing more.”

Bengaluru, as indicated by Razack, will be one of the slightest influenced urban areas because of demonetisation as it is a dominatingly end-client advertise, driven by home credits not at all like the NCR which is for the most part theoretical. Driven essentially by a salaried class, the managing is principally through keeping money channels.

Sobha overseeing executive J C Sharma said the move by the legislature would bring about bringing down of loaning rates in this way making lodging more reasonable to all. “We require around 4.2 million homes in the following four years and with supply deficiency, costs can just go up,” he said.

Real estate faces new reality as big bang reforms kick in, finally.

   The year 2016 was an enunciation point for the land area and with Real Estate  Regulatory Act (RERA) turning into a reality, rising buyer activism and highvalue  money demonetisation that hit money exchange arranged division hard is effortlessly  a watershed year.

These components have contributed in establishing framework to take realty , which  establishing framework to take realty, which has so far stayed saddled with deceptive  practices, towards quite required straightforwardness and giving solace and legitimate  pad to homebuyers.

The following year different states will conclude and set up controller for the segment  and designers are required to concentrate more on conveyances than new dispatches to lessen stock levels. Home purchasers will profit enormously with moderateness set to increment and home credit rates slanting downwards.

“Each of these carry with them positives, which will upgrade Indian land. April 2017 is the point at which we hope to see showcase development return to typical. The property market will witness quick development crosswise over portions and small scale advertises in Indian land,” said Niranjan Hiranandani, prime supporter and CMD, Hiranandani Group.

In the event that 2016 was a point of interest for land from an arrangement viewpoint, with Benami Property Transaction Prohibition Act, RERA and GST as likewise the long haul effect of demonetisation, it additionally reclassified the way Indian land later on works together from now onwards.

Demonetising made a mark in private property part, pulling back the last quarter pattern of private deals considerably over the urban areas; thusly deals are at a verifiable low with 2016 compounding what was an awful in 2015.

“The year isn’t required to end on a sound note. The written work’s unmistakably on the divider – 2016 will go down as a wa tershed year in the historical backdrop of Indian land. A central point for this could be ascribed to the approach advancements by the administration which in the fleeting have prompted to an unusual interruption, yet over the long haul, are anticipated to foreshadow well for the business all in all,” said Shishir Baijal, director, Knight Frank India.

As indicated by Knight Frank India, the private property advertise saw enhanced deals in the initial six months of 2016. Excepting Delhi-NCR, different markets did well in the main portion of this current year contrasted with earlier years. Mumbai and Bangalore drove the way .

“Indeed, even as the stock shade diminishes, the three greatest markets as far as volumes of unsold units (counting under-development) are NCR, Mumbai and Bangalore. By volume, NCR stands 37%, which is more than 33% of India’s unsold (counting under-development) private stock ,” said Anuj Puri Chairman, JLL India.

Another up and coming change that will affect the division in the days to come is the execution of RERA that will build straightforwardness, which thus will bring back purchaser certainty.

“With RERA turning into a reality, we will see not really genuine and temporary administrators moving out of the system.Consolidation will occur now and will give customers better decision as engineers who are in for long haul play might not want to cheat homebuyers. Customer activism will get reinforced with RERA batting for influenced purchasers,” said Anil Agarwal, a main attorney, who has spoken to homebuyers in such cases in Bombay High Court.

Designers, then again, should acclimate to the new environment and all the more particularly , they need to change their plan of action while holding fast to stricter consistence norms.However, as of date, just Maharashtra and Delhi have concocted and told the draft rules for RERA.

“RERA will change the way business is being directed in the land area. This is relied upon to enable clients monstrously; there might be some abuse too. Affirming powers ought to give the endorsements on time to make RERA a reality,” said J C Sharma, bad habit director, Sobha.

PM Modi Targets Real Estate Assets In Drive Against Corruption.

 PM Narendra Modi has unobtrusively stopped a duty escape clause utilized by the well off to  purchase land in another person’s name as a major aspect of his crusade against defilement,  a senior assessment official said on Monday.

While the concentration of his organization was dealing with the aftermath of the stun move  a month ago to scrap old 500 and 1,000 rupee noticed, the authority advised Reuters that the  office anticipated that would venture up investigation of land resources with suspicious titles.

Impose authorities anticipated that would utilize returns for the present year that are  documented in July and also different means, for example, assaults and information from  bank exchanges to accumulate data about suspicious land resources, the authority said.

“This is our need for one year from now,” said the authority, asking for namelessness as unapproved to address the media.

Any move to tidy up India’s chaotic land market could end up being a mammoth and intense undertaking and would come even as the Modi government is confronting mounting feedback of its treatment of the money crunch that took after the rejecting of higher section cash notes.

India’s territory records are inconsistent and arcane. Investigators say individuals, for example, government officials, representatives and non-inhabitant Indians regularly utilize money they haven’t paid assessments on to purchase property, yet place it for the sake of their relatives or trusted workers.

Be that as it may, regularly flats and land go down eras in a family without the first proprietor’s name steadily being changed in the title.

Information on the size of such action is not accessible. Be that as it may, industry gauges indicate 5 to 10 percent of land in numerous urban communities is purchased by individuals who have dodged charges.

In his month to month radio address on Sunday, PM Modi protected demonetisation, which he has charged as an endeavor to battle debasement, and said the legislature would execute the law to tidy up India’s land records in coming days.

“There is no doubt of a withdraw,” PM Modi said.

The law, called the Prohibition of Benami Property Transactions Act, which became effective on November 1, says individuals who hold resources that don’t really have a place with them could confront up to seven years in prison, other than seizure of the property.

The legislature has yet to explain how it will upgrade land records and land registries.

Investigators said the genuine test for PM Modi is increment consistence and rebuff individuals who have dodged charges without making hardship others.

“The constant quest for dark cash should be supported by strong execution. Generally this will simply stay on paper,” said Amit Maheshwari, an accomplice at consultancy Ashok Maheshwary and Associates LLP.

How to price your property right.

 Price your property right. The value of a property is decided by various factors, including the cost  of similar properties in the same location, the view of the apartment, the available amenities in  the building and the overall market trends in terms of appreciation and depreciation.

Selling a property is art which can be perfected if one follows certain guidelines. Forum often gets  queries from consumers such as ‘How do I calculate the right price for my house?’ or ‘How can I  make my house more valuable so that I can get the best price for it?’ or ‘How can I increase the  value of my house?’ Here are some ways to achieve the right value.

Price History: Identify houses which have been sold recently in your area and try to read the  market trends in terms of pricing. Property portals today, offer online tools which calculate the worth of your house online. It is also good to do some research on houses that resemble your property. It will help you know the market well and assess the real value of your own house.

Negotiation: While developers can afford to give discounts and lure buyers, you as an investor may not be in a position to give a heavy cut. However, do keep in mind that a potential customer will always try to negotiate. How much of a cut is fine and how much is unworthy of pursuing should be your call.

Quoting the right price: Selling prices depend a lot on the amenities and facilities available for a prospective buyer. Apart from the location and infrastructure, buyers look at what are the conveniences they can get- is the house maintained over the years, what is the condition of the building, what do others have to say about the project, is there constant water, power supply etc. Keep the pricing rational and not too high as overpriced houses take time to sell or sometimes don’t sell.

It is also recommended to talk to neighbors and ask for the prevailing rates. You could also get the property evaluated by 2-3 brokers to get a realistic quote. Happy Selling!

Xrbia December Newsletter

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