GST : What the buyers should do!

With the new Constitutional Amendments and subsequent supporting legislation cleared by the cabinet, renewed hope of GST implementation is in the market. Although the constitution amendment fixed 15^th September 2017 as the deadline, but recent consensual announcement by the GST Council of getting the law into force by 1st July 2017 comes as a welcome news.With the new taxation mechanism coming into force subsequently, the real estate consumers should be well aware about the nature, procedure and things-to-do post implementation as the GST law would have a multifarious effect on the real estate market altogether.

Presently the under-construction real estate is subjected to VAT, Service tax and stamp duty. Post GST implementation they will be covered under Central GST (CGST) and State GST (SGST) respectively with stamp duty remaining unaffected as it is con-sensually left out of the purview of the new taxation legislation. Now let us look at the prospective effect of the GST on net taxation on real estate units and thus its prices which is of more importance to consumers.

At present, if a consumer books a property when it is not completed, she pays service tax to the centre and VAT to the state. Whereas the developer pays numerous taxes and duties such as octoi, excise duty, customs duty, Central Sales tax etc. On the constituent building materials, transportation and equipment therein. Roughly estimated, this aggregately costs anywhere between 24-26% on the net value of property varying minutely between states. But with the newly introduced tax regime, if consensus is built on the 18% tax rate as proposed, it will evidently lead to cheaper property prices and thereby boosting consumer driven growth. Well that seems a good news for consumers, hence waiting till mid-2017 could surely save you certain bucks on your purchases,

Moreover, from the developer's perspective, GST regime would most certainly bring in an era where smooth and cheaper flow of credit is realized thereby ensuring more building companies and construction units starting up and getting into the segment of real estate. For a consumer/buyer, its a good news because it will usher in a much desired healthy competition which apart from reducing the cost per unit for the consumer, will also ensure better building infrastructure and facilities with multifarious perks and browny discounts associated within due to this competition amongst developers. Moreover the regime of goods and services tax also promised the much required transparency in the sector, which when clubbed with the new RERA act, will usher in an era of more accountable and clean real estate transactions which is surely in the interest of the end-consumers. Even the talk wherein GST regime is expected to bring in easy compliance of tax liability would end up helping the consumer, developer and market as a whole thereby making the sector an easy catch for the consumers and a realistic investment opportunity that they look up to.

Hence evaluating the chances of post-GST regime, it seems that most certainly it will end up reducing the burgeoning cost per unit of a particular real estate, bring in more accountability and transparency, provide more easy tax compliance and generate easy line of credit opportunity for both devlopers and consumers, thus creating a paradigm of a win-win situation. And since, the roll out is expected anytime soon, there is definitely no harm in waiting for it execute and thus produce its productive results on the real estate sector which will ultimately end up benefiting the buyer therein. Hence this waiting seems pretty worthy for everyone!

                                                                                    

Open office: A lucrative investment option

After their bashing successes in western countries, the concept of open-offices is slowly developing keen-ness in Indian psyche off-lately. Metro cities ranging from Bangalore, Delhi, Mumbai, Pune etc. Are flooded with requests with an essential waiting list which goes to months for getting a space in such open offices. This evidently shows the demand and at the same time its scarce availability, thus deeming the concept of "open offices" as hot investment target for future is no overstatement.

Defining the concept of open office, which are sometimes called "shared work spaces" or "plug-n-play offices", they are essentially work spaces which is pre-infused with all the essentials of a work space including the construction and digital infrastructure required and provides a definite ground space for working and not worrying about other tiresome phenomenon associated with maintaining an office space. There are umpteen number of advantages that appeals the working class to apply and acquire such spaces thus bypassing the old-school concept of office spaces.

Firstly, with growing number of freelancers and start-ups in India, it is economically not viable for such low capital companies to rent or leasehold properties in the white-collar hubs of the country due to their burgeoning prices, procedural fatigue and long drawn processes associated while acquiring new property. Hence, such open spaces provide these freelancers and new businesses with a lucrative opportunity of working from an already maintained space which is fully furnished with all the essentials of an office without necessarily worrying about the ownership and maintenance of the working unit. They can just come, plug-in and work without worrying about the non-essential stuff that tends to impede their working efficiency. Moreover, a Govt. Report on Start-up India states that Indian start-up market is set to quadruple itself by 2025, and thus these start-ups would essentially need office spaces to work which is already in scarce, and hence this surely makes the concept of "open offices" a very lucrative calling card for investors to invest in for the coming decade.

Secondly, professionals such as architects, lawyers, charted accountants etc. Are finding it difficult to find working spaces which would facilitate meeting their clientage to discuss the issues pertaining therein. Such scarcity is on the account of increasing number of professionals functioning in the market, inadequacy of funds provided by the Govt. (for eg: low funds to build chambers for lawyers) and lack of availability of space as such professionals often prefer certain hotspots wherein client base is more. These days such professionals are finding it convenient to meet their clients at a restaurant or a coffee shop due to obvious reasons. Thus providing them such open working spaces would be profitable and a lucrative deal, and a win-win for everyone, which is surely the most successful business model globally. Thus investing in such portfolio would ensure you definite returns which would be on the rise for the coming decade for sure.

Finally, the ease of access that these work spaces provides to everyone wherein the companies and professionals need not worry about non-essential fatiguing work such as maintaining the work space, maintaining a kitchen space, a projector room, lightening arrangements, janitor staff, fibrenet facility, furniture etc. That generally end on reducing the efficacy output of the company and such professionals. Thus such open-office spaces are the way to go for investors looking forward to invest in certain real estate portfolios in the coming years, as such would be a very high returning and a constantly-rising portfolio for the times to come when India is set to embark upon the development of its economic growth through new businesses and professionals across the country. Way to go investors!