#ready reckoner rate maharashtra

[gharjunction2020]

https://www.gharjunction.com/blog/ready-reckoner-rate-in-majiwada-thane-what-you-need-to-know/452

[bologoday]

Maharashtra Government Maintains Ready Reckoner Rates for FY25

Gurgaon: Homebuyers in Maharashtra can rejoice as the state government has decided to keep the land ready reckoner (RR) rates unchanged for the fiscal year 2025. This decision was confirmed through a notification issued by the state revenue department on March 31, stating that the RR rates will remain the same as the previous year. This marks the fourth consecutive year without any revision in RR rates since the last update was made in the fiscal year 2018-19.

The announcement has been well-received by experts in the real estate industry. Hitesh Thakkar, Vice President of NAREDCO West Maharashtra, expressed that this decision was in line with the industry’s demands. Keeping the RR rates steady prevents an increase in the cost of houses, thus easing the financial burden on homebuyers.

In a notable development, Mumbai city, which falls under the BMC jurisdiction, witnessed the registration of 14,411 properties in March 2024, contributing a significant revenue of Rs 1,143 crore for the state government. According to state data, stamp registration increased by 10% year-on-year (y-o-y), while revenue from property registrations experienced a 7% decline on a y-o-y basis.

This dip in stamp duty collections is attributed to the exceptionally high collections in the previous year, following the Centre’s decision to limit tax deductions on capital gains from the sale of residential property after March 31, 2023, as highlighted by Knight Frank India, a prominent real estate consultancy firm.

Anand Gupta, Vice President of the Builders Association of India, noted that property registrations are witnessing an upward trend, and the state’s decision to maintain the ready reckoner rates will further stimulate property sales and sustain the positive momentum in the market.

For those unfamiliar with the term, the Ready Reckoner rate is the minimum valuation set by the state government for properties in specific areas. It serves as a benchmark for calculating various taxes, charges, and fees related to property transactions, including stamp duty and registration fees. These rates are periodically assessed and revised by government-appointed authorities, such as the revenue department or municipal corporation, taking into account factors such as location, market trends, and property characteristics.

Overall, the decision by the Maharashtra government to keep the RR rates unchanged for FY25 is expected to benefit homebuyers by maintaining affordability and supporting ongoing property transactions. This move aligns with efforts to stimulate the real estate sector and encourage continued growth in property sales across the state.

For more such News Kindly Check blogoday.com

[realestateinindia]

Everything you need to know before investing in R-Zone land in Maharashtra

What is R-Zone in Maharashtra?

R-Zone in Maharashtra is one of the various kinds of land available to cater to people’s housing demand. However, these R-Zone plots are considered a high-risk investment compared to several other zones of land in Maharashtra. These plots are suitable for constructing houses in both urban and rural locations. The government bodies include MMRDA and CIDCO (City and Industrial Development Corporation) who determine the plots and permit to construct a house under the R-zone.

Categories of R-Zone

There are two diverse categories of R-zone in Maharashtra i.e., R1 Zone and R2 Zone. R1 zone is no other than R-Zone which provides you the opportunity to live in a locality that is fully dedicated to residential properties. It is also known as a residential zone that is located within 12 meters of the main road and plots within 9 meters, which makes the transportation convenient for citizens living peaceful at home, thereby increasing the livability quotient.

Whereas R2 zones are also residential zones but can be partially converted to commercial, institutional, and medical development zones. These zones are at least 12 meters away from the nearest road and plots are at least 9 meters away or more from the busy areas, making it challenging for citizens to travel.

Benefits of R-Zone

The R Zone has several advantages, including enhancing residential areas' safety, security and maintaining the surrounding areas clean. R Zones offer the advantage of giving residential areas more stability and protection when compared to other zoning designations. As they normally need less land and have fewer building restrictions, they are also inexpensive. In contrast, industrial and commercial regions could call for bigger lots and more intricate construction regulations. Additionally, R Zones are frequently situated in more attractive areas, which makes it simpler to draw in prospective tenants and buyers. The R Zone is a great option for buying a property in residential areas.

R-zone also offers various amenities including swimming pools, playgrounds, and nearby retail spaces to make it convenient for the people choose to live in the zone. Many cities and municipalities have included the special zoning classification known as the "residential zone" in their development plans. This "R-zone" exclusion zone is commonly found in residential areas of the town or city and is typically labelled as such. It is intended to prevent commercial and industrial development by allowing only the construction of single-family homes.

Risks of investing in R-Zone

When the title of the property is improper, investing in land in an R-zone is a risk. Therefore, it is advised to check the R-zone plot data for any pending legal complication, verification of data is necessary to avoid any risk involved with the property.

The encumbrance certificate (EC) should also be checked to ensure there are no discrepancies or complaints if you wish to purchase an R-zone property. Check the Ready Reckoner Rate (RRR) of the area and invest in the land if there are no such questions and it is legally yours.

Can R-Zone be converted into NA (Non-Agricultural)?

Yes, according to the regulatory authorities, the R zone plots in Maharashtra can be turned into NA plots. The local municipal corporation must receive an application and payment equal to 0.05 percent of the ready reckoner or circle rate in the requested area to issue a plot conversion certificate.

In order to avail yourself of the conversion certificate, the title of the plot must be marketable and clear. You must verify that only the owner or the buyer has ownership rights to the land. It is advised to check the EC issued by the regional sub-registrar office before you sign the contract and get the deed verified by an accomplished advocate.

This certificate is issued by the local government organization in charge of managing the registration of the land. If EC determines there are no outstanding debts, grievances, or conflicts, you can change the R-zone plot into a NA plot and move forward with your request.

Check land zone in Maharashtra online

The methods to take to determine the zone of a specific plot are listed below:

Login to the Maharashtra Bhulekh website.

From the map, click and choose the area of the country.

Choose the 7/12 document type and type district, taluka, and village.

Choose any plot-related information to focus your search. Search by entering the survey number, first or last name, among other details.

The relevant details, such as the plot's land type and zone, will be included in the document that will be made available.

To avoid future inconsistencies, it is useful to know the geographical zone of a plot. It is advised to carefully review the plot specifications and, if necessary, consult a legal professional before making an investment in an R-zone plot in Maharashtra.

Should you need more details? Reach out to our experts to know the legalities of buying a property in R-zone areas.

[abhousingrealtypvtltd]

Maharashtra Government has announced

8 % to 19% hike in ready reckoner rate from January 2023.

Buy Now Or Regret Later...!!

#abhousingrealtypvtltd

#RealestateMarketInPune

#realestateinvestment #realtor #HomeForSale #readyreckoner #hike #hoisingmarket #pune #PCMC

[houseseekers]

Important Points One Should not be Neglected While Owning A Property

Some People Look For A Beautiful Place....Others Make A Place Beautiful ! In today's fast pacing world for searching your dream place like Home is not difficult for house seekers as true real Estate or property consultant put their efforts in finding your dream home by all the means & available resources.Although there are several laws,rules & regulations in place which protect a purchaser of property, self-help with proper guidance is the best help and one must do due diligence before buying and owning a property. Therefore, below mentioned list of precautions to be taken and some of the important aspects one must look at before finalizing or buying a home. 1) Clear Title Property & Zero Risk ::- Clear title with zero risk property is one of the most important factor to be considered before purchase. There are various points which required to investigate the title of the property such as:: (A) by studying the documents of title to ensure that the owner or builder has proper ownership of the property. The documents of title should be studied very carefully as any shortfall may lead to a defective title or dispute may occur later (B) To inspect the original title deeds. (C) To search the records of the society where the property is located currently. 2) Inspect sanctioned plans & Permissions ::- Required necessary sanctioned plans with due permissions and commencement certificate by the respective authority should be inspected, especially if work of the buildings under construction. If the building is not built in accordance with sanctioned plans, the completion certificate will not be granted. For buildings that are complete, occupation certificate/completion certificate should be verified and checked. 3) Legality Check of Property ::- Ensure the property is legally authorized to be constructed on the plot it stands on. The developer should have approvals and NOCs from Area development authorities, water supply and sewage boards, electricity boards and Municipal Corporation. However if you are taking a home loan, the concerned bank will validate your property documents before loan sanction. 4) Land Tenure ::- This is very important & essential aspect should have to come in your thought list and also be considered if property is under freehold or leasehold. For example, Leasehold refers to a property tenure, where one party buys the right to occupy the property for a given length of time (30 to 99 years). In a leasehold land, the authority (usually, a government agency) remains the owner of the land and gives the land to builders, to develop apartment projects on a leasehold basis. Anyone who buys a residential flat, will own it only for the leasehold period. 5) Permitted user and Restrictions ::- This aspect should be verified as well. For example, one should see whether the property is residential or commercial as per the Development Control Regulations. Other factors such as heritage rules, set-back for road widening or any future development may apply to certain buildings, which should also be considered. 6) Documentation ::- Proper documentation should be put in place for purchase of the property. The sale document should be properly stamped and registered with duly signed and the original title deeds should be taken by the purchaser from the seller. 7) Ready reckoner rates ::- The burden on the buyer is set to increase with the recent hike in the Ready Reckoner (RR) rates. The Maharashtra government is on its way to increase the ready reckoner rates for properties between 5% and 30%, depending on the size and location in Mumbai and the rest of Maharashtra.The Ready Reckoner is used to calculate the market value of flats for stamp duty and registration charges, which are major sources of revenue for the government after sales tax and value-added tax. 8) Estimate the total cost of ownership ::- This Including parking charges, stamp duty, registration charges, maintenance, amenities, new furniture / furnishings that a customer may have to purchase. All this could contribute to almost 5-20 percent of the bare cost of the apartment.It is important to understand about the final usable area of the apartment, especially in case of apartments under construction. Most of the times, the sale would be on super-built up area. Consumers need to be comfortable with the liveable area they will finally get to use as issued and published by RERA ( Real Estate Regulatory Authority ) 9) Property Budget: The first step in selecting a house or a flat is to fix a budget. It makes it easier to shortlist a house if you know how much you are willing to spend while buying or owning your home. Compare the price of the property in question with the same surrounding it from various builders to get an idea if the builder has offered you a genuine quotation. There are many ways where you can get a comparative of properties in the area you are looking for or near by. Website Portal listings, brokers of the area or newspaper listings, hoardings are such sources which help house seekers journey comfortable. 10) Flat’s Carpet Area ::- Usually, a property’s area or the super built-up area that is listed is the entire area including shafts, elevator space, stairs, thickness of walls and others. However, carpet area or actual usable area is the main area within the walls of the flat. This are can be 30 per cent lesser than the built-up area or the area used to calculate the price of the property. 11) Apartment Possession ::- It has become a trend of delayed possessions of flats owing to delay in commercial and residential plans. As a buyer, you should have a clear estimate of the timeline for possession. Usually, a developer ask for a six-month grace period, however there should be a valid explanation for the same. 12) Financial Schemes & Financing Banks ::- You should be prepare with OCR ( Own Contribution ) and certain subvention schemes offered from builders or finacial institutions and also aware of the banks that are willing or not willing to finance certain builders. Owing to a bad reputation, some banks do not offer loans to some builders. So, it is very important that you should check with the banks that are filling to fund the project you are planning to invest on or not. 13) Builder-Buyer Agreement ::- When you select a flat or house of your choice, you can book the same by giving a token amount, in return of which you get an allotment letter. Then, a tripartite agreement is entered upon between the buyer, the bank and the builder for the rest of the amount. This agreement should be read and understood in detail before signing on it. All the clauses must be clearly understood and if any doubts, should be raised at this point itself to avaoid futher delay or any diputes. 14) Location of the Flat or Project ::- Not to forget, it is important to look around the area where you are going to be eventually residing in. The amenities, physical infrastructure and reach to all the basic places are important to be analysed. These factors will help you have a peaceful living in the house. The flat should be in a safe and secure place, offering some security to families living in the flat. 15) Estimate total cost of running the home ::- This will include maintenance charges, property tax, increased commuting charges as compared to your present place. Please ensure that this fits in your daily monthly budget. 16) Home Funding ::- Last but one of the vital point that Find out whether the home loan you are thinking about is the cheapest & affordable loan? Find out best rate of interest for woman co-ownership or senior citizen, if applicable. Many developers also provide spot transactions or CLP ( Construction Link Plan ) with the help of many financial institutions with best rate of interest possible on availing loan. Therefor it's your skills to fish for the best rate and grab the opportunity.Discuss with the seller upfront on cash component, if any. These things spring up at the last moment, and most of us do not have access to large amounts of cash. If you are buying the apartment as an investment, please ensure that it fits into your overall asset allocation and that you have a balanced mix between equities, debt instruments and real estate. Buying a residence or house for your loved one or family is possibly the biggest decision you would take, ranking or prioritize after your marriage and having a child. You have a responsibility towards yourself and towards your family and doing all the above before buying your own apartment, will ensure that “This is not just a home. This is your dream come true”.

[propertyexperttips]

THINGS TO BE CAUTIOUS ABOUT BEFORE BUYING A PROPERTY

Land Possession – This should also be taken into account. For example, if the land is leasehold and the lease's remaining tenure is short, and there is no option for renewal on old rent, the purchaser may be required to pay higher ground rent upon lease renewal. It is also possible that no renewal clause exists at all.

NOC and dues – Although a no-objection letter from society is not required for sale under the new model bye-laws, receiving such a letter as well as a no-dues letter from the society is desirable if the premises are in a society.

If the builder fails to pass on the building to society, the builder's approval should be sought. It should be established that the seller has paid all of his obligations, including property tax, service tax, VAT, and other payments to the society or builder, as appropriate.

Income-tax Check to discover if any processes under Section 281 of the Income-tax Act of 1961 are pending against the seller. Furthermore, if the seller is a non-resident of India, TDS may be taken from the consideration paid unless the relevant Income-tax officer issues a certificate for non-deduction or a lower deduction.

Restrictions and Authorized Users – This aspect should also be examined. For example, the Development Control Regulations require that one identify whether the property is residential or commercial. Other limits, such as heritage restrictions and road widening setbacks, may apply to individual buildings and should be considered.

Select a Location – The next item on your house purchasing process checklist should be to select an appropriate area. Properties in certain areas tend to be more profitable over time since they appreciate at a rapid rate. However, certain areas do not develop as much, and hence the property rate remains mostly unchanged. The rent derived is also affected by the location. Many people find it challenging to afford a home in a well-developed neighborhood. As a result, it is prudent to select the next best alternative - a location that is likely to thrive in a few months or a year or two. Before investing, conduct a thorough examination and assessment of the growth potential.

 Create a Budget – The budget is one of the first items on your to-do list before purchasing an apartment. This is a must for every large investment and requires careful planning. To begin, compile a list of all your expenses and sources of income to determine how much money you will have left over each month after covering all of the necessary charges for a comfortable lifestyle. Examine your savings and other investments to determine how much you can afford for a down payment. Set the budget properly now.

Rates for ready reckoners have risen – With the recent increase in Ready Reckoner (RR) rates, the buyer's burden is anticipated to rise. The Maharashtra government is planning to raise ready reckoner rates for homes in Mumbai and the rest of the state by 5% to 30%, depending on size and location.

The Ready Reckoner is used to assess the market value of apartments for stamp duty and registration charges, which are the government's second and third largest sources of revenue after sales tax and value-added tax.

Quality of Construction – Whether you are buying an independent builder flat or one in a residential society, it is critical to evaluate the building quality. Many builders design houses that appear lovely from the outside, but the materials utilized in their construction are of inferior quality. Do not fall for such schemes.

Water and electricity supply – Even a luxurious, fully furnished home cannot provide comfort if there is a lack of water and frequent power outages in the area. This can be quite inconvenient, especially if you wish to live independently. This is because there will be no power backup and inverters cannot handle heavy loads for lengthy periods. As a result, one of the first things you should look into is the area's water and power supplies.

[engineers-horizon]

The  Ready Reckoner rates have been hiked in Maharashtra from 31st March 2022. 

In Thane, Navi Mumbai, Pune, Panvel, and all the other municipalities the rates have increased by an average of 8.80%. 

However, the ready reckoner rate in Mumbai will remain the same.

Connect us today to know more about the project

Contact: 9021653653

Website:www.engineershorizon.com

[infinityworldpunawale]

How good is the unchanged Reckoner Rate for Pune's real estate?

A Ready Reckoner Rate (RRR), also known as Circle Rate, is fixed by the State government, based on which  Stamp Duty and Registration fees are charged during immovable  property transactions. It varies from state to state, and every year State governments publish new Ready Reckoner Rates. However, RR rates for the fiscal year 2021-22 remained unchanged in Maharashtra, which proved beneficial for the new home buyers in Pune.

How RRR impacts Real Estate Transactions?

RRR determines the selling price of the property. However, most properties are sold at market price, which is higher than RRR. Therefore, quarterly or bi-annual revision of RRR is beneficial for the state governments and helps circumvent black money circulation in the Real Estate market. Generally, it is recommended to buy a property with a small gap between market price and RRR because the increase in RRR implies an increase in market rate, which means higher property costs for the buyer. 

Unchanged Reckoner Rate in Pune

RR rates in Pune have remained unchanged for the Fiscal year 2021-22. It was last hiked in September 2020  by the Maharashtra government. The RR rates of the property determine the payment of stamp duty and registration fees. The decision was taken after a downturn was witnessed due to demonetization, RERA, GST, followed by a global pandemic, series of lockdowns, and restrictions. 

Advantage of unchanged RRR

Unchanged RRR or Circle rates will benefit end-users as stamp duty and registration fee on the property depends on the RR rate. Unchanged RRR  effort has been made from the government's side to boost the real estate market, which is reeling under crisis due to global pandemic. The pandemic led to a mass exodus of migrants, halts in the construction process, and a halt in the home buying process. However, with a double vaccination drive, Pune's Real estate market is recovering, and the government wants to bring stability to the market by not changing the Ready Reckoner rate for the time being.

Is it the right time for property buying?

If you are a first-time homebuyer, this year may be the right time to take the huge step. The average housing price will remain the same due to unchanged RR rates. If you are hunting for new residential projects in Punawale, come aboard Infinity World. Tulip Group developed the property. This RERA-approved property offers 2,3 and 4 BHKs equipped with best-in-class comforts and conveniences for an exclusive lifestyle. The project is going to be ready by Dec 2024. Located near the Ravet hanging bridge, Infinity World offers the best security for your loved ones with 4 -tier security, CCTV, 24 hours surveillance, fire safety equipment, well-marked internal roads, and street lighting. Experience the magnificent dwellings loaded with modern amenities in a desirable location.  

[my-1-stblog]

latest news

SC ISSUES NOTICE TO STATES OVER REPEATED USE OF SECTION 66A OF IT ACT

The Union Ministry of Home Affairs had written to states, asking them not to enlist cases under the revoked arrangement and pull out any such case that might have been documented.

The Supreme Court Monday gave notification to all states, Union domains and Registrar Generals of all high courts regarding a request over the proceeded with utilization of the

area 66A of Information Technology (IT) Act, regardless of it being struck down in March 2015.

In a request by the NGO, People Union for Civil Liberties, a seat of Justices RF Nariman and BR Gavai expressed that they "will pass far reaching request so that question of booking individuals

under rejected area 66A of IT Act is settled for the last time."

The request expressed that the rejected area kept on being used at police headquarters as well as in preliminary courts the nation over. To which, the seat reacted,

"Legal executive we can deal with independently however police is likewise there. There should be one legitimate request since this can't proceed."

Prior, the Union Ministry of Home Affairs had written to states asking them not to enroll cases under the canceled arrangement and pull out any such case that might have been recorded.

"The Union Ministry of Home Affairs (MHA) has mentioned States and Union Territories (UTs) to coordinate all police headquarters under their locale not to enroll cases under

the revoked Section 66A of the Information Technology Act, 2000. It has additionally asked the States and UTs to sharpen law requirement offices for the consistence of the

request gave by the Supreme Court on 24.03.2015," an assertion gave by the MHA said.

The move came after the Supreme Court on July 5 communicated its shock over the proceeded with utilization of segment 66A of the IT Act.

"Stunning. What is happening is horrendous," commented Justice Nariman as Senior Advocate Sanjay Parikh caused the court to notice how cases have expanded consistently finished

the years in spite of the March 24, 2015, administering in the Shreya Singhal v. Association of India case that struck down segment 66A for "being violative of Article 19(1)(a) and not

saved under Article 19(2)."

Segment 66A enabled police to make captures over what cops, as far as their abstract caution, could understand as "hostile" or "threatening" or for the reasons for

causing irritation, bother, and so on

Realty partakes popular; Oberoi, IB Realty, Prestige Estates, Sobha up 5%

Portions of land organizations were sought after in Monday's meeting, pushing Nifty Realty and the S&P BSE Realty to their individual multi-year highs on assumptions for

further developed viewpoint.

At 10:25 am, Nifty Realty Index (up 3.9 percent) and the S&P BSE Realty Index (up 3.8 percent) were up almost 4%, when contrasted with a 0.6 percent rise each in the

Nifty50 and the S&P BSE Sensex. In the previous three months, realty records have flooded 35% contrasted and a 8.4 percent acquire in the benchmark files.

Oberoi Realty, Prestige Estates Projects, Indiabulls Real Estate and Sobha were up 5% each while Brigade Enterprises, Godrej Properties, Sunteck Realty and DLF were

up between 2% to 4 percent on the BSE in intra-day exchange.

As indicated by ICICI Direct, the realty file and its constituents have quite recently recorded a solid breakout from a long term base arrangement and are put on the cusp of the following

major underlying positively trending market. "We anticipate that the sector should beat in coming years wherein organizations like DLF, Oberoi Realty, Godrej Properties, Phoenix Mills, Brigade endeavors,

Indiabulls Real Estate and Sobha, which by and large contribute 87% of Nifty Realty Index, are ready to create better than expected returns in years to come and ought to be

considered as long haul speculation wagers in portfolios," it said.

Among singular stocks, Macrotech Developers, the as of late recorded land organization, flooded 6% to Rs 905.70 on the BSE in the intra-day exchange on Monday.

The stock was exchanging at its most significant level since its posting on April 19, 2021. In the previous one month, the stock has zoomed 32% as against a 0.75 percent ascend in the

benchmark record.

In the April-June quarter (Q1FY22), Macrotech Developers timed an absolute deals booking of Rs 957 crore, of which Rs 654 crore came in June. Bullish on the viewpoint for lodging interest,

Lodha said: "Significance of claiming a house has expanded essentially since the flare-up of Covid-19 pandemic. Individuals are utilizing their investment funds to purchase homes. Financing costs on home

credits are at an authentic low."

On Friday, Macrotech Developers revealed a solidified net benefit of Rs 161 crore for the quarter finished June. It had posted a total deficit of Rs 134 crore in the year-prior period.

All out pay developed to Rs 1,712 crore in the main quarter of this financial year from Rs 573 crore in the comparing time of the earlier year.

Oberoi Realty, the top gainer, was up 7% and hit another high of Rs 720.45 after it detailed deals volume of 0.9 lakh sq ft (up 6.5x YoY on waste of time base of Q1FY21 however down

91% QoQ) generally because of the subsequent wave effect and high base of Q4FY21, which a few dispatches including a major dispatch at Goregaon. The business esteem was up 5.9x YoY,

down 91% QoQ at Rs 170 crore. On the monetary front, detailed incomes grew 141% YoY yet were down 64% to Rs 284.3 crore. Edges at 43.9 percent were down

334 premise focuses (bps) QoQ.

The administration said the land area is going through significant combination as not many engineers have the monetary steadiness to embrace huge capital-escalated projects.

In this manner, the portion of the overall industry of rumored brands with solid execution capacities will keep on developing, it said.

THE AFFECT OF UNSOLD INVENTORY ON REAL ESTATE

"Offload, offload, offload – dispose of your inventories" – This was the exhortation last year from Hardeep Singh Puri, the Housing and Urban Affairs Minister, for the Indian land engineers. This suggestion approached closely following a comparative explanation made by Piyush Goyal, the Minister of Commerce and Industry, as the lockdowns had pushed the realty area's recuperation from a multiyear droop back to the beginning line.

The decisions accessible to designers, as per Mr. Goyal, were straightforward: auction their expensive inventories at lower winning rates or default on advance reimbursements as there is absence of liquidity on the lookout. This Catch-22 circumstance frames the core of the weight that stock shades present for the land area in India – burdened by Rs 3.7 lakh crore worth of unsold lodging units in the main 7 urban communities.

Be that as it may, auctioning off unsold units won't be as speedy an answer as these assertions will have you accept. Property advisor Jones Lang LaSalle (JLL) has announced that the unsold stock in India will take around 3.3 years to sell, particularly with the interest shock that came about because of pandemic-related confusions.

This carries us to one of the essential difficulties looked by engineers: the more established their stock gets, the more it takes to exchange. This makes an endless loop where, if engineers decide to sit tight for a willing purchaser to pay a property's actual worth, they face the danger of additional deterioration in its worth. Simultaneously, offering potential homebuyers high limits to create the deal can bring about enormous misfortunes for designers.

Yet, stock shades don't simply affect the engineers' benefit; they have other falling impacts too. With the designer's capital restricted in existing ventures that will not sell, any new undertaking dispatch normally gets affected, driving them to slow down their development pipelines. This effects purchaser notion contrarily, as the dread of deferral in projects stops new homebuyers from making an enormous speculation.

This expanding liquidity emergency antagonistically affects the land area, which has stayed frustrated for liquidity for quite a while because of a progression of emergencies and strategy changes like the 2016 banknote demonetization and the 2018 IL&FS emergency. The pandemic has additionally exacerbated this issue.

A basic decrease in costs to animate interest won't address this problem, as it opens designers to Income Tax punishments that outcome from the infringement of the Ready Reckoner Rate (RRR). To address this, Finance Minister Nirmala Sitharaman permitted designers and homebuyers a 10% safe harbor limit beneath the stamp obligation circle rate in Budget 2019-20, which was subsequently expanded to 20% in Budget 2021-22.

Notwithstanding, this is only a brief fix legitimate just till 30 June, 2021. Besides, the protected harbor limit just reaches out to private units worth a limit of Rs 2 crore. The move leaves out the extravagance lodging section that records for a huge lump of this unsold stock – an expected 7,364 units evaluated at Rs 3 crore or more, dispatched as far back as December 2016, that are as yet unsold and devaluing.

Engineers are likewise commanded to pay charges on the unsold stock, in view of their notional rental pay, if the stock is more established than two years. This conveys a one-two punch to land players, particularly in business sectors that order high information and land securing costs. Take the instance of Mumbai, the country's most costly property market, which additionally represents the best lump of its unsold stock. Engineers in Maharashtra pay heavy expenses, demands, and other duties that can represent 33% of the general undertaking cost in the state. Sometimes, expenses can surpass the expense of development. For engineers of such properties, tax assessment on unsold stock and limits for potential homebuyers can together end up being too exorbitant to even consider bearing.

Eventually, unsold stock seatedly affects each partner in the land business, making income interruptions for designers and a stale market for financial backers and likely property holders. Taking into account that land in India is set to represent a heavy 13% of the economy by 2025, stock shades have the capability of affecting the economy, whenever left unaddressed.

Regardless of these difficulties, engineers can take trust from improving homebuyer slant, proven by a sharp uptick in realty deals in the third and fourth quarters of 2020. Moreover, in November 2020, HDFC Bank, the country's biggest home lender, detailed its second-most elevated month to month payment ever. This development popular has been pushed by record-low home advance loan costs, the extending reasonable home market, government drives like the decrease in stamp obligation in Maharashtra, and the developing significance of claiming a home in the wake of the pandemic. The disconnected to online progress of the realty area, combined with engineers' drive to embrace liquid planning standards, is additionally prone to support financial backer assumption.

An accommodative monetary strategy, as kept up with by the Reserve Bank of India, and coming about repo rate cuts are likewise giving a fillip to home advances in the country. The Central Bank's choice to concede term credit and working capital advance installments has likewise assisted with lessening the weight of home and development advances on designers, facilitating their liquidity imperatives. More current speculation roads like Real Estate Investment Trusts are likewise assisting with carrying truly necessary liquidity to engineers.

The public authority has likewise found a way a few ways to support homeownership like giving interest appropriations to center and lower-pay bunches under the Pradhan Mantri Awas Yojana (PMAY). In November 2019, the public authority even declared a Rs 25,000 crore Alternative Investments Fund to carry help to 1,600 slowed down projects, which were assessed to represent 4.58 lakh deficient lodging units. The move demonstrated advantageous for some engineers, and confined conceivable outcomes of misrepresentation because of a severe consistence cost as it was open just to projects that were RERA-enrolled and total assets positive. The public authority can additionally consider allowing the framework status to land and presenting truly necessary estimates like single-window clearances and a supported GST to assist with bringing down engineers' expense of capital. Once again introducing the GST Input Tax Credit will likewise help by bringing down the assessment obligation borne by engineers. The Confederation of Real Estate Developers' Associations of India (CREDAI) has likewise encouraged the public authority to assemble extra institutional financing for engineers through banks and NBFCs.

The onus of overseeing liquidity limitations, notwithstanding, will eventually fall on designers and their capacity to change their techniques. Over the previous year, in the light of the public authority's push to auction existing stock, engineers have offered homebuyers appealing limits, gifts, and adaptable installment intends to drive deals. More modest realty players, who can't give such concessions, can consider tie-ups with bigger designers to finish their activities. Then again, engineers of both private and business activities can likewise offer their business improvements to homegrown or abroad private value assets to acquire liquidity. A few designers even believer their private tasks to business ones to work on their possibilities.

More than request and deals, it is industry overhangs that mirror the genuine strength of the housing market. Perceive how the Delhi-NCR market saw a sharp log jam in costs after 2013 because of melting away financial backer premium and developing stock shade. In any case, around 2018, as unsold stock levels diminished by 15% on the rear of interest restoration of private and business realty in Gurugram, Greater Noida, and Ghaziabad, the housing market in the locale saw a 35% increment in new dispatches. This supported land development as well as set out work and financial freedom.

This, then, at that point, is the financial, business, and social effect that unsold stock has on the housing market. By tending to the problem areas referenced above, industry partners can tackle the 'overhang' issue and open its actual potential. For a nation taking a gander at the land area to lead its post-pandemic resurgence, not making a mediation is presently not an alternative.

https://indianexpress.com/article/india/sc-notices-states-uts-high-courts-section-66a-of-it-act-7434332/

https://www.business-standard.com/article/markets/realty-shares-in-demand-oberoi-prestige-estates-indiabulls-sobha-up-5-121080200316_1.html

https://www.financialexpress.com/money/the-impact-of-unsold-inventory-on-real-estate/2298530/

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Maharashtra changes stamp duty rates on loan deals

The decision will increase the cost of registration of documents such as title deed, equitable mortgage, hypothecation submitted for the loans, etc.

In a move that might slightly increase the cost of property registration in the state, the Maharashtra government has increased the stamp duty on registration of various banking agreements related to property sale and purchase, after a cabinet meeting held on December 9, 2020

The decision will result in the stamp duty increasing from 0.2% to 0.3% of the agreement value on registration of documents, such as title deed, equitable mortgage, hypothecation submitted for the loans, etc. This effectively means that a home loan borrower will have to pay Rs 9,000 to register the loan document, if he is applying for a home loan of Rs 30 lakhs. On the other hand, the stamp duty on home loans where the buyer has yet to get possession has been reduced to 0.3% from the existing rate of 0.5%.

It is pertinent to mention here that when the sale deed is registered with the sub-registrar, the bank that lends the fund to the buyer for the purchase is given the original documents to keep as security, till the loan is fully repaid. To formalise this arrangement, a memorandum of deposit of title deed (MODT) is executed. Under the state laws, stamp duty and a registration charges are levied on this document, which must be registered.

Stamp duty is the state government-determined levy that buyers have to pay, as the legal cost of asset acquisition. The registration charges, on the other hand, are paid for the paper work that government agencies have to carry out, in order to formalise the ownership transfer in case of an immovable asset.

Charges on registration of home loan documents vary from state to state.

See also: 15 home loan hidden charges you should know about

Online registration of documents and online filing of notices will attract a stamp duty charge of Rs 15,000 now. The aim of the exercise was to bring uniformity and ensure people comply with the guidelines, the state revenue ministry said.

Recall here that Maharashtra has earlier reduced the stamp duty on property purchases with a view to boost consumer sentiment in the backdrop of the Coronavirus pandemic that resulted in property registrations in the state hitting record low during the lockdown period.

With the reduction that came into effect in August 2020, the state brought down the stamp duty on property registrations from 5% to 2% till December 31, 2020. After this period, buyers will pay 3% as the stamp duty on property registrations between January 1 and March 31, 2021. This reduction is available to buyers only for a limited period.

The reduction is stamp duty has been a key incentive for property investments, with 78% respondents in a consumer sentiment survey by Housing.com, saying they want to buy a property in the next one year.

To further encourage the builder community, the Maharashtra government recently reduced the construction premium by 50%, offering a major respite to developers. According to Dhiraj Bora, head-Marcomm, Paramount Group, the recent reduction in real estate premiums and stamp duty for Maharashtra has brought a windfall of sales for the region.

After stamp duty cut, Maharashtra hikes ready reckoner rates by an average of 1.74%

Days after announcing a 3% temporary reduction in stamp duty charges, the Maharashtra government has announced a hike in ready reckoner rates

September 14, 2020: Days after it announced a significant reduction in stamp duty, with an aim to boost buyer sentiment in the state, the Maharashtra government on September 11, 2020, announced a hike in the ready reckoner (RR) rates by an average 1.74%. Although marginal, the hike in the RR rates may undo the good done by the stamp duty reduction, industry experts say.

The hike in RR rates — a government-determined value below which a property cannot be registered in a particular locality — would be effective from September 12, 2020, exactly 11 days after the new and reduced stamp duty charges were implemented.  Stamp duty on property transaction is calculated, using the RR rates, also known as circle rates, guidance value or collector rates. As cities are vast and the value of one area may be quite different from the value of another, the circle rates vary from locality to locality.

The developer community —  which has been reeling under the combined effect of a prolonged slowdown, which has been aggravated by the Ccoronavirus pandemic and a severe liquidity crunch — has criticised the state government’s move. “It is surprising that in a scenario where everybody was suggesting a price reduction, be it (HDFC chairman) Deepak Parekh, (road and transport minister) Nitin Gadkari or (commerce minister) Piyush Goyal, the state government has instead opted to enhance the RR value,” says Niranjan Hiranandani, president (National) NAREDCO and ASSOCHAM. “Income tax provisions mean that a developer cannot sell at a price point lower than the RR rate, as it translates into taxation burden for both, the buyer and the seller. In this situation, the expectation was that the state government would reduce the value. Instead, it has chosen to increase the same,” Hiranandani added.

According to Ram Naik, executive director, The Guardians Real Estate Advisory, the state government’s move would send mixed signals among the buyers in Maharashtra. “While on one hand the government is indicating to home buyers that they want them to buy homes, by slashing the stamp duty, it is marginally increasing the ready reckoner rates on the other hand,” says Naik. “This increase, to a certain extent, is going to nullify the gains of the reduced stamp duty for the recently-motivated customer. This increase is also going to force developers to pass on the additional burden of increased premium costs that are linked to the ready reckoner prices, onto the customers. All in all, we could have waited for a better day for such announcements,” he adds.

Others, on the other hand, view the state move as more of a balancing act.

“The government has made a marginal upward revision in locations, where the rates were low and reduced the rates where they were high which has made it more balanced. This is a welcome move in favour of the customers,” said Rajan Bandelkar, president, NAREDCO west and convener, Housingforall.com.

According to Anuj Khetan, director, Vijay Khetan Group, the government has only rationalised the rates.  “The rates have been slashed in few areas, whereas they have been hiked in some other areas. Therefore, it is not a direct increase in the rates,” says Khetan. “Nonetheless, it is not the right time to do this exercise, when the industry’s balance sheet is under severe stress and the country is reeling under the horrific COVID-19 pandemic,” he adds.

Impact on pricing in key cities

While the RR rates have been slashed by a marginal 0.6% in Mumbai, the average hike is quite steep in another expensive real estate market, Pune, where rates are now costlier by around 3.91%. “We have parameters to assess transactions and we have seen the maximum transactions in Pune district. Therefore, there has been a rise in the rates here,” inspector-general of registration and stamps (IGR), Omprakash Deshmukh said.

In Raigad and Nandurbar, too, the RR rates are now 3% higher. In Navi Mumbai, the RR rates have been increased by an average of 0.99% while the average hike in Thane has been of 0.44%. The average hike in RR rates in rural areas of Maharashtra was 2.81%.  The average hike in RR rates in areas falling in influential zones of Maharashtra was 1.89%. Rates have been increased by an average of 1.02% in areas falling under the corporations, while the hike has been of 1.29% in areas falling under municipal councils.

Stamp duty reduction in Maharashtra

With stamp duty collection touching a historic low, amid the Coronavirus-induced lockdowns, the Maharashtra government on August 26, 2020, decided to temporarily reduce the stamp duty on property purchase in two slabs by up to 3%.

From September 1, 2020, to December 31, 2020, it decided to charge only 2% as stamp duty on property registrations as against the earlier 5%. From January 1, 2021 to March 31, 2021, the government announced a reduction of only 2%, effectively bring the stamp duty on property registrations to 3% for the three-month period.

See also: Maharashtra Stamp Act: An overview on stamp duty on immovable property

This was in fact the second reduction in stamp duty charges by the state in 2020.  The step was prompted by a record low property registrations that caused severe damage to the state’s coffers.

Stamp duty is that percentage of the property value, which buyers have to pay to the state government to get the properties registered in their names. Additionally, 1% of the property value has to be paid as the registration charge. This significantly increases the total cost of the purchase and often acts as a deterrent for buyers in Mumbai and Pune, where the cost of properties are already high and buyers may not be a position to arrange for the extra costs.

The developer community, which has been demanding that the state reduce the stamp duty and rationalize RR rates, as the cost of buying property in key cities, especially Mumbai, is quite high, had then welcomed the move.

“We thank the government for acknowledging the slowdown in the overall economy and reducing the stamp duty rates, to stir up demand for homes. This will immensely benefit home buyers, as well as boost the real estate sector,” said Shailesh Puranik, MD, Puranik Builders.

“This is a fantastic move. Kudos to the Maharashtra government! It will certainly boost sales, as all those sitting on the fence will take the plunge. What is commendable is that they also put a timeline to it, which encourages buyers to buy sooner rather than later,” added Ram Raheja, director, S Raheja Realty.

With an aim to boost sales in the state earlier, especially in prime residential markets such as Mumbai, Pune and Nashik, the Maharashtra government, while presenting the annual budget in March 2020, lowered the stamp duty for these cities from 6% to 5% for two years.

However, before the reduction could make an impact, the central government announced a nationwide lockdown on March 24, 2020, that remained in force till May 30, 2020. During this period, property registration operations were partly suspended in the major markets of the state, severely impacting revenue.

Housing sales in Mumbai, for instance fell, 81% in April-June 2020, year-on-year(y-o-y), shows Housing.com data. Mumbai developers sold a total of 4,559 units between April and June 2020 as against 23,969 units in January-March, 2020 and 29,635 homes in Q2 2019.

What makes matters worse is that Mumbai also has the highest inventory stock, as compared to other leading residential markets in India. After seeing an annual reduction of 14% in its unsold stock, India’s financial capital currently has an inventory consisting of 2,76,492 units. At 37%, Mumbai is the highest contributor to the national inventory stock level, which stood at 7,38,335 units, as on June 30, 2020. At the current sales velocity, builders in this market would take approximately 40 months to sell off this stock.

In the Pune market, builders sold a total of 4,908 units during April-June 2020, as compared to 18,580 units in the same period last year. Pune also has an unsold inventory of 1,35,124 units, second only to Mumbai. The inventory overhang in Pune is, however, lesser at 30 months.

Inventory overhang is the time sellers would take to offload the unsold stock in a market, based on the current sales velocity.

Property to cost less in Mumbai, Pune and Nagpur as stamp duty cut by 1%

In a move that might boost home buyer sentiment in prime residential markets of the state, the Maharashtra government while presenting its Budget for FY 2020-21 on March 6, 2020, proposed to reduce stamp duty on property purchase by 1%

March 6, 2020: In a move that might boost home buyer sentiment in prime residential markets of the state, the Maharashtra government while presenting its Budget for FY 2020-21 on March 6, 2020, proposed to reduce stamp duty on property purchase by 1%. The reduced rates will be applicable in the areas falling under the MMRDA (Mumbai Metropolitan Region Development Authority) and municipal corporations of Pune, Pimpri-Chinchwad and Nagpur for two years.

Currently, home buyers in Mumbai, which is counted among the most expensive property markets in the world, pay a stamp duty of 6% on property purchase, apart from a 1% registration charge.  In Pune, the stamp duty currently is 6%.

Stamp duty is a government-determined charge home buyers have to pay during the time of property registration, apart from a standard 1% registration charge. Stamp duty charges differ from one state to another, considering land is a state subject.  Rules in this regard are governed by Section 3 of the Indian Stamp Duty Act, 1899.

The developer community has lauded the state government move to reduce the stamp duty.

“Any cost reduction is welcome … This move will positively impact home buyer sentiment. I appreciate the concern shown by the state government to help the home buyer and the real estate Industry,” said Niranjan Hiranandani, president, NAREDCO.

“The industry welcomes the state government’s initiative to provide relief and promote the revival of the sector. Huge unsold inventory and ready-to-move-in properties in Mumbai, Pune, and Nagpur are likely to benefit from this announcement. The festivities like Holi and Gudi Padwa are also approaching and we are hopeful that the sales will see an uptick in the next couple of quarters,” said Farshid Cooper, managing director Spenta Corporation.

Data available with PropTiger.com show there were a total of 296,465 unsold housing units across the MMR region as of December 2019.  Also, a majority of the affordable stock lying unsold across India’s nine major markets is in Mumbai – India’s financial capital currently has over 1.38 lakh unsold affordable homes. Pune has an unsold housing stock consisting of 144,300 housing units currently.

“Lowering down the stamp duty charges from 6% to 5% (in Mumbai) is a good step taken in today’s Budget which will take some burden off the home buyers. Overall, (this is) a positive step by the government before Gudi Padwa,” said Vikas Jain, managing committee member, CREDAI-MCHI Raigad Unit and CEO of Labdhi Lifestyle.

Do not hike stamp duty to increase revenue: Maharashtra finance minister

Maharashtra’s finance minister Ajit Pawar has asked officials to refrain from increasing stamp duty on property deals and instead, focus on rationalising ready reckoner rates, to increase revenues

January 10, 2020: Maharashtra finance minister Ajit Pawar, on January 9, 2020, asked officials not to hike stamp duty on property deals. The revenue should be increased, instead, by rationalising ready reckoner rates (official rates of property for the purpose of computation of duty), he said. Pawar gave these instructions during a review meeting of the Department of Registration and Stamps, an official statement said.

It was also decided during the meeting that there should be a separate cadre of officers, for providing better services to people visiting Registration and Stamps offices. It was also decided that the Aadhaar card would be enough as identity proof for document registration and two witnesses will not be needed anymore for that purpose.

(With inputs from PTI)

Amnesty scheme for stamp duty penalty

March 12, 2019: The government of Maharashtra, on March 1, 2019, announced an amnesty scheme with respect to the penalty that can be levied for insufficient payment of stamp duty made in the past. The scheme proposes to limit the penalty payable on certain transactions to 10% of the deficient stamp duty, instead of the 400% which can be levied in normal course by the government. The scheme applies to all the transactions of sale or transfer of tenancy rights, of residential houses within Maharashtra and is available only for documents that have been executed on or before December 31, 2018. The application, along with the instrument and supporting documents, has to be made within a period of six months from March 1, 2019, i.e., by August 31, 2019, the period up to which the scheme will remain open.

(With inputs from PTI)

Stamp duty on land deals in MMR

People who executed land deals in the Mumbai Metropolitan Region between May 19 and September 19, 2017, may have to pay additional stamp duty, with the government approving the levy of stamp duty as per the 2017-18 ready reckoner rates, as against the 2016-17 rates

August 1, 2018: The Maharashtra cabinet, on July 31, 2018, has approved the recovery of stamp duty on land transactions executed in the Mumbai Metropolitan Region (MMR), between May 19 and September 19, 2017, as per the 2017-18 ready reckoner rates. Those who executed land deals during this period, will have to pay the difference between the stamp duty as per the 2017-18 rate and that as per the 2016-17 rate (which they may have paid), a government official said.

See also: Mumbai property buyers may have to face further increase in stamp duty

“The government had stayed the recovery as per the 2017-18 rate, on the request of the Maharashtra Chamber of Housing Industry. The chamber contended that the stamp duty be levied as per the 2016-17 rates, because the new rates were exorbitant,” he said. “A study group was set up and now, the stay has been lifted after receiving its findings. Today, the cabinet approved the recovery of additional amount of stamp duty for this period. However, the penalty (for late payment) will be waived,” the official said.

In another development, the cabinet also decided to allot 5.6 hectares of government land at Balewadi near Pune, for the Hinjewadi-Shivajinagar stretch of the Pune Metro. As per the market rate, the price of the land is Rs 153 crores and it is being allotted, as part of the state’s share in the project cost, the official added.

This article was originally published in English housing.com

All rights reserved. Any act of copying, reproducing, or distributing this newsletter whether wholly or in part, for any purpose without the permission of Amit B Wadhwani is strictly prohibited and shall be deemed to be copyright infringement

[indialegal]

Maharashtra hikes ready reckoner rates by 2%, marginal drop for Mumbai

Maharashtra hikes ready reckoner rates by 2%, marginal drop for Mumbai

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Written by Sandeep A Ashar | Mumbai | Updated: September 12, 2020 9:47:20 am

The RR rates are market values of a property determined by the government for payment of stamp duty in the course of property transactions.

Market values for properties across Maharashtra rose by an average 1.74 per cent after the state government…

[incorp-india]

Current Scenario of the Real Estate Sector: A Perspective

The real estate sector in India has been facing a tough time from quite a few years. The situation has become tougher due to the current Covid-19 situation across the globe. The uncertainty holds the world to a standstill and India is not an exception to it

The global economic slowdown is likely to negatively impact real estate demand in the country this year. Almost all sectors have started the first month of their financial year 20-21 with minimal or negligible sales.

It is currently too early to provide a detailed, quantitative assessment of the COVID-19 impact on economic activity, industries, and the real estate market. The effects of the outbreak will inevitably vary from market-to-market, and the true impact and recovery will manifest in forthcoming quarters.

We at Incorp received a lot of queries coming in the past few weeks from our contact sphere to help them understand the impact on Real Estate; thereby our team has tried to address some of the top points impacting the Industry and the ways to mitigate it.

We have often heard of the statement – “Communication is the key to success”. In this pandemic situation, the word communication gets replaced with Compromise. “Compromise is the key to success” – Developers will have to follow only one strategy “Compromise”. Compromise in their lifestyle, spending, sales price expectations, holding unsold inventories, and all those things coming their way. The interest meter keeps running even when one is sleeping. Line of credit sanctioned by banks, financial institutions, NBFC’s, etc. before lockdown will no longer stay in the same state of condition. Every loan sanctioned will be reviewed and valuation will be challenged post lockdown. Mr Deepak Parekh, HDFC warned developers against high leverage and said it is going to work as a double-edged sword. “In good times, it amplifies your profit. In bad times, it destroys you. Be careful of the perils of leverage,” he further added.

Holding on readily available inventory by the developers will no longer be in the interest of the developer. Developers may have to take a haircut on their sale price expectation up to 20%. This will help to generate liquidity and to sustain in this market in the long run. Also, the launching of new real estate projects is not feasible. Smaller the house, easier to sell. Demand for affordable housing and homes with the ticket size of up to Rs. 2 Crores will still exist, but the high-end segment already has saturation. Maintaining liquidity in the current situation will be a challenge due to the ongoing outflows and commitments but once life comes to normalcy, one should start maintaining liquidity.

Equity partners shall be welcomed with open arms. This includes working in Joint Venture Model, Development Manager Model, strategic partnerships and financial partnerships. Instead of further borrowing, the developer shall explore PE funds, HNIs, strategic partner who has a strong face value in the market. Being partnered with the strong face or goodwill may, in turn, help the developer to sail through from this situation. Even partnering in with well-esteemed contractors will be equally useful.

Our Debt syndication experience tells us that developer has a tendency to switch the banks quite often. This is mainly because of two reasons; a. An existing bank may not extend the support in the aggressive expansion of the developer/borrower & b. Competency in the commercials offered compared to existing banks.

Though the former reason is explicitly the call of the bank depending on their appetite and risks involved but later are in hands of the developer. In either case, the developer shall stick to its existing bankers and encash their long-lasting relationships with the banks. Banks are to be treated as co-owners in the project. A borrower should not switch the banks for 50 to 100 bps point difference.

Major projects in the real estate market fail due to the wrong estimation of the project life cycle. Life of the project must be estimated from the first rupee infused and till the last rupee recovered. Also, the borrowing estimation (tenure) must be calculated accordingly. Tenure of the loan should be equal to the life cycle of the project; any shorter tenure loan will not work. If the tenure projected is less than project’s life, the project will face a cash crunch and if the tenure projected is more than project’s life, it may lead to a diversion of excess funds generated during its life.

In any real estate project in India currently, the cost of premiums payable to government is equivalent to the cost of construction. It means there is no longer a story of doubling your money in 3 years in real estate. In fact, developers are finding it difficult to achieve even single-digit margins if the project is not executed as scheduled. Developers may have to joint their hands and contest with authorities to stagger the premium payments. In Maharashtra, for the acquisition of the project, huge premiums are to be paid to CIDCO, MHADA even before the inception of the construction of the project. If these premiums are not staggered under the measures channelized by the government to revive the industry post lockdown, developers may not be able to sustain. No bank will fund at this stage and even if funding is available, no developer will be in a position to borrow such a huge sum of money.

Few questions in the mind of developers?

How long would be the impact of Covid-19 situation on our industry?

Real Estate in India will pass through tough times for a minimum of 6 months from now. This is mainly due to their monthly fixed overheads backed by zero sales and tiny recovery from the sold inventory. People, in general, will start holding money and keep it for securing themselves from any uncertainty coming their way in the near future.

How to generate liquidity & commence ongoing projects immediately post lockdown?

Each industry will face the problem of generating liquidity. Real Estate being the second most job-generating industry, will be at the peak of its liquidity issues. One should try to generate liquidity by selling “Lock and Key” unsold stock which will help to commence ongoing projects and keep them running post lockdown.

Should we approach banks to restructure our existing loans?

Yes. RBI is already discouraging banks to keep money in RBI accounts and thereby encouraging banks to infuse more money into the system. Hence you should apply for restructuring your existing loans before they turn NPA. Even a one-time restructuring of NPA accounts may be allowed in the near future.

I have got an opportunity to merge with another developer and this will help me to complete my project in time. What should be my response?

Completing the project on time and delivering the units to the customers will enhance your goodwill in the market. “Alone we can do little; together we can do so much”. Focus on partnerships, you may partially lose control, but it is a need of the hour.

In our industry, there are always long due payments to be made to suppliers and contractors. Will the supplier continue its support after the lockdown?

The relation between developers, suppliers and contractors goes hand in hand. All are dependent on each other in some or the other form. Be in touch with your suppliers, contractors, maintain long-lasting relations, and leverage them at the right time. Relook at your existing dues and schedule a payment plan for suppliers/contracts so that required support from them stands uninterrupted

What is the strategy to be adopted to reduce the impact of the Covid-19 situation?

Relook at the project estimation right from its configuration, life cycle, funding requirements, feasibility, etc. Remember, smaller the house, easier to sell. Other than various points suggested above, “Compromise” is the only key to success to overcome the situation.

What can be demanded from the government by the developers?

Being the second-largest job-generating industry after agriculture, the government should help the real estate industry by incentivizing migrant labourers return to their jobs as it is difficult for them to even understand the situation of lockdown. This incentive can be in the form of travel cost for coming back to the workplace and insurance, employer’s contribution towards provident fund can be exempted and the same to be provided by the government.

Ready Reckoner value to be relooked by the state government as Land revenues come under the state government. At many places in Tier 1 cities, the ready reckoner value is higher than the actual deal value which makes the project unviable for even lenders to support the developers. Though the government has reduced the stamp duty in some states like Maharashtra with effect from 01st April 2020, there should be thought for a complete waiver of stamp duty for a smaller period post lockdown to boost the Real estate industry. The state government may not be able to do this for a longer period as huge revenue comes from this segment.

Staggered payment schedule for all premiums can play a vital role in managing cash flows for any developer and thereby the industry as a whole.

What’s the say of Developers on the above?

When we gave a thought of writing something on Real Estate, we thought taking their views is also most important in the current situation. Here goes their say:-

“Compromise is not about losing. It is about deciding that the other person had just as much right to be happy with the end result as you do,” said author Donna Martini. A known developer said Compromise has to be from all sides i.e. from government, banks, RBI, and a developer. What has and will hit us badly is the demand. Unless the Rate of Interest (ROI), Fixed Obligation to Income Ratio (FOIR), and Loan to Value (LTV) are not revisited by banks, the demand will continue to be price-sensitive and we will be continued to be advised by Bankers to reduce prices by 20%.

“Reducing sale prices of flats while prices for Raw material, cost of production and other incidental costs keep increasing will not be a solution. This will lead to an even more negative outlook towards Real Estate and will spark the sentiment of distress sale on lowering prices. Such events will dishearten buyers and existing investors too”, said another developer from Tier 1 city.

One of the top builders in Mumbai also quoted “The business of real estate is very different from money lending and other commodity trading. To remain in business and to keep moving if we are paying high interest on our borrowings doesn’t mean we are making profits of more than the interest paid by us. The lenders feel that because a developer pays much higher interest, a developer may also have an appetite to reduce the sale price by 20%. The lenders should reduce the rate of interest which will certainly improve profitability and the need for the developer is for better cash flow to complete ongoing projects”.

How can InCorp India help you?

At InCorp India, we are committed to delivering quality in Transaction and Risk advisory services. Our dedicated team of transaction advisors can assist you in any real estate related issues and provide ease for operations.

[houseseekers]

Important point to consider while owning A property

Important point to consider while owning A property

Some People Look For A Beautiful Place....Others Make A Place Beautiful !

In today's fast pacing world for searching your dream place like Home is not difficult for house seekers as true real estate or property consultant put their efforts in finding your dream home by all the means & available resources. Although there are several laws,rules & regulations in place which protect a purchaser of property, self-help with proper guidance is the best help and one must do due diligence before buying and owning a property. Therefore, below mentioned list of precautions to be taken and some of the important aspects one must look at before finalizing or buying a home.

1) Clear Title Property & Zero Risk ::- Clear title with zero risk property is one of the most important factor to be considered before purchase. There are various points which required to investigate the title of the property such as:: (A) by studying the documents of title to ensure that the owner or builder has proper ownership of the property.    The documents of title should be studied very carefully as any shortfall may lead to a defective title or dispute may occur later (B) To inspect the original title deeds. (C) To search the records of the society where the property is located currently.

2) Inspect sanctioned plans & Permissions ::- Required necessary sanctioned plans with due permissions and commencement certificate by the respective authority should be inspected, especially if work of the buildings under construction. If the building is not built in accordance with sanctioned plans, the completion certificate will not be granted. For buildings that are complete, occupation certificate/completion certificate should be verified and checked.

3) Legality Check of Property ::- Ensure the property is legally authorized to be constructed on the plot it stands on. The developer should have approvals and NOCs from Area development authorities, water supply and sewage boards, electricity boards and Municipal Corporation. However if you are taking a home loan, the concerned bank will validate your property documents before loan sanction.

4) Land Tenure ::- This is very important & essential aspect should have to come in your thought list and also be considered if property is under freehold or leasehold. For example, Leasehold refers to a property tenure, where one party buys the right to occupy the property for a given length of time (30 to 99 years). In a leasehold land, the authority (usually, a government agency) remains the owner of the land and gives the land to builders, to develop apartment projects on a leasehold basis. Anyone who buys a residential flat, will own it only for the leasehold period.

6) Permitted user and Restrictions ::- This aspect should be verified as well. For example, one should see whether the property is residential or commercial as per the Development Control Regulations. Other factors such as heritage rules, set-back for road widening or any future development may apply to certain buildings, which should also be considered.

7) Documentation ::- Proper documentation should be put in place for purchase of the property. The sale document should be properly stamped and registered with duly signed and the original title deeds should be taken by the purchaser from the seller.

8) Ready reckoner rates ::- The burden on the buyer is set to increase with the recent hike in the Ready Reckoner (RR) rates. The Maharashtra government is on its way to increase the ready reckoner rates for properties between 5% and 30%, depending on the size and location in Mumbai and the rest of Maharashtra.The Ready Reckoner is used to calculate the market value of flats for stamp duty and registration charges, which are major sources of revenue for the government after sales tax and value-added tax.

9) Estimate the total cost of ownership ::- This Including parking charges, stamp duty, registration charges, maintenance, amenities, new furniture / furnishings that a customer may have to purchase. All this could contribute to almost 5-20 percent of the bare cost of the apartment.It is important to understand about the final usable area of the apartment, especially in case of apartments under construction. Most of the times, the sale would be on super-built up area. Consumers need to be comfortable with the livable area they will finally get to use as issued and published by RERA ( Real Estate Regulatory Authority )

10) Property Budget: The first step in selecting a house or a flat is to fix a budget. It makes it easier to shortlist a house if you know how much you are willing to spend while buying or owning your home. Compare the price of the property in question with the same surrounding it from various builders to get an idea if the builder has offered you a genuine quotation. There are many ways where you can get a comparative of properties in the area you are looking for or near by. Website Portal listings, brokers of the area or newspaper listings, hoardings are such sources which help house seekers journey comfortable.

11) Flat’s Carpet Area: Usually, a property’s area or the super built-up area that is listed is the entire area including shafts, elevator space, stairs, thickness of walls and others. However, carpet area or actual usable area is the main area within the walls of the flat. This are can be 30 per cent lesser than the built-up area or the area used to calculate the price of the property.

12) Apartment Possession ::- It has become a trend of delayed possessions of flats owing to delay in commercial and residential plans. As a buyer, you should have a clear estimate of the timeline for possession. Usually, a developer ask for a six-month grace period, however there should be a valid explanation for the same.

13) Financial Schemes & Financing Banks ::- You should be prepare with OCR ( Own Contribution ) and certain subvention schemes offered from builders or finacial institutions and also aware of the banks that are willing or not willing to finance certain builders. Owing to a bad reputation, some banks do not offer loans to some builders. So, it is very important that you should check with the banks that are filling to fund the project you are planning to invest on or not.

14) Builder-Buyer Agreement ::- When you select a flat or house of your choice, you can book the same by giving a token amount, in return of which you get an allotment letter. Then, a tripartite agreement is entered upon between the buyer, the bank and the builder for the rest of the amount. This agreement should be read and understood in detail before signing on it. All the clauses must be clearly understood and if any doubts, should be raised at this point itself to avoid further delay or any disputes.

15) Location of the Flat or Project ::- Not to forget, it is important to look around the area where you are going to be eventually residing in. The amenities, physical infrastructure and reach to all the basic places are important to be analysed. These factors will help you have a peaceful living in the house. The flat should be in a safe and secure place, offering some security to families living in the flat.

16) Estimate total cost of running the home ::- This will include maintenance charges, property tax, increased commuting charges as compared to your present place. Please ensure that this fits in your daily monthly budget.

17) Home Funding ::- Find out whether the home loan you are thinking about is the cheapest & affordable loan? Find out best rate of interest for woman co-ownership or senior citizen, if applicable. Many developers also provide spot transactions or CLP ( Construction Link Plan ) with the help of many financial institutions with best rate of interest possible on availing loan. Therefor it's your skills to fish for the best rate and grab the opportunity.Discuss with the seller upfront on cash component, if any. These things spring up at the last moment, and most of us do not have access to large amounts of cash.

If you are buying the apartment as an investment, please ensure that it fits into your overall asset allocation and that you have a balanced mix between equities, debt instruments and real estate. To sum it up, buying a residence or house for your loved one or family is possibly the biggest decision you would take, ranking or prioritize after your marriage and having a child. You have a responsibility towards yourself and towards your family and doing all the above before buying your own apartment, will ensure that “This is not just a home. This is your dream come true”.