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!

5 prospering cities of India

Chief economic advisor (CEA) to the finance ministry, Dr. Arvind Subramaniam wrote in this year’s economic survey that drivers and levers of Indian growth story are its new cities which would relieve the burden on densely populated cities like Bangalore, New Delhi, Mumbai etc. Let us analyse what we have in store for us in 2017 and how are such cities all set to modify the Indian growth story.

(1)    Chandigarh – India’s first planned city Chandigarh, and its two sister cities of Panchkula and Mohali is all set to alter the growth story of North India due to its economic calling card. With new international airport coming in Aerocity developed by Larson & Toubro, to being a nodal point in the all anticipated Amritsar-Kolkata economic corridor (AKEC), this city is all set to embark to new heights due to its economic growth potential specially in high skilled trade sector. Moreover, its high standard of living has always been its global calling card attracting global citizens towards it.

(2)    Naya Raipur – Developing as the new capital of Chattisgarh and latest planned city of India, it was awarded as the world’s first integrated city in January 2017. With the availability of smooth cycling lanes to a well knitted integrated grid driven by solar power, this city is expected to be carbon neutral. Moreover, with university such as IIT Naya Raipur, KIT, ITM IIM Raipur, the city is also a supplier of highly skilled workforce, and thus attractive destination for investors. With adequate supporting infrastructure such as the new cricket stadium, paves way for holistic development of its citizenry.

(3)    Amravati – Located at the southern bank of Krishna river in Guntur district, the newly planned capital city of Andhra Pradesh is all set to transform into a technology and manufacturing hub and relieve some burden on its counterparts of Hyderabad and Bangalore. With educational institutions like Vellore University setting the campus, and newer proposals such as SRM university, Amity university and India-UK institute of health (IUIH), the city is all set to supply skilled workforce and also attract global giants in both manufacturing and services sector.

(4)    Cochin – Widely referred to as the commercial hub of Kerela, this city opens India through Arabian sea and thus a major connectivity facilitation to the western world. Moreover, with new Govt. initiatives such as Sagarmala which focuses on port-led development, the city of Cochin is all set to embark on India’s trade potential to help surging its GDP and also waive some load off the busiest Jawahar Lal Port of Mumbai.

(5)    Guwahati – Located at the banks of Bhrahmaputra, this city of Assam is all set to be nodal hub for the development of North East India. With India’s Act East policy in operation, this city is all set to assure North East to fulfil its deficit of development by increasing trade operations from South East Asia and Bangladesh. With inland waterways proposed in Bhrahmaputra, it would save logistics costs providing an opportunity through trade.

In addition to all this, the country is all set to develop over 100 smart cities through its smart cities mission, and thus produce a well-knit framework for city led development for the growth story of India in 21^st century. Investing in one of these gems is no less than an opportunity of “assured return”. 

Home Loan: Do you have all the papers?

With the demonetisation decision and subsequent notifying of Real estate (Regulation and Development), Act, 2016 by different states, both credibility and pricing of the property is a reality now. Buyers, specially from the middle income group (MIG) is looking for new residential avenues hence they should keep information regarding credit facility handy. Although documentation requirement for different banks and different, but by and large there is a model skeletal of documents required for a streamlined credit availability.

Prospective creditors are often clubbed under categories (generally three in number) according to their respective conveniences which is beneficial for both the costumers and the bank. This segregation essentially allows them single window clearances with a promissory note through attractive offers like “7 days’ credit in hand assurances”!

 

1)      Salaried class- Documents required are-

·         Application form with photograph duly signed.

·         Identity, residence and age proof

·         Last 6 months’ bank statements

·         Last 3 months’ salary slips

·         Processing fee cheque

·         Form 16/ Income Tax return

 

2)      Self-employed professional- Due to self-evident insecurity attached with self-employed personnel, documentation required will have to pass through more KYC norms. Apart from the above documents requirement, prospective costumer will have to add few more documents to his portfolio while applying.

·         Application form with photograph duly signed.

·         Identity, residence and age proof

·         Last 6 months’ bank statements

·         Last 3 months’ salary slips

·         Processing fee cheque

·         Form 16/ Income Tax return

·         Educational qualification certificate and proof of business existence.

·         Last three years’ income tax returns with computation of income.

·         Last three years’ CA certified/ audited balance sheet and profit & loss account.

3)      Self-employed non-professional- With more stringent procedure attached due to evident anonymity, KYC norms are extended to one more document (generally, though may vary from bank to bank).

·         Application form with photograph duly signed.

·         Identity, residence and age proof

·         Last 6 months’ bank statements

·         Last 3 months’ salary slips

·         Processing fee cheque

·         Form 16/ Income Tax return

·         Educational qualification certificate and proof of business existence.

·         Last three years’ income tax returns with computation of income.

·         Last three years’ CA certified/ audited balance sheet and profit & loss account.

Due to India’s economic profile and credibility attached therein with large number of public sector banks in the market, buying credit from home loan is not a tiresome exercise these days if one is ready with all the requisite documents aforementioned. Hurry! Start preparing your portfolio for a cheap home loan for upgrading your residential profile by shifting to your dream home.

Delhi High Court Finds an Individual guilty for his Abusive and Defamatory Social Posts

It's a warning to all the individuals who are using abusive language on social media to defame any business, corporate house or a person in particular. 

On Monday, the Delhi High court granted a perpetual injunction to Ashish Bhalla interdicting the defendant from defaming or abusing him.  

Mr. Bhalla, who is a well-known architect and reputed development professional, had filed a defamation case seeking an injunction before the Delhi High Court. The case was filed against certain defamatory posts prompted by vested interests on customer forums of the beleaguered AN Buildwell Pvt. Ltd. which has projects in Gurgaon and Manesar.

Mr Bhalla had contended that he himself was locked in litigation with the owners of AN Buildwell since 2014, and was neither a promoter nor a shareholder of the said Company, and had submitted proof of the actions of vested interests that had misguided customers.

The court came down quite heavily on Mr. Anil Sharda who was directed to be present in person for his abusive and defamatory posts, and enquired as to how it was open to the defendant to defame or abuse a person when there was no finding against him in any court linking him to AN Buildwell Pvt. Ltd. The court categorically stated that the present proceedings were not the forum for agitating on such issues. In any event without any proof or conclusive finding, it was not open to the defendant to defame or abuse the plaintiff. It was pleaded that these posts were pursuant to a premeditated design to target Mr. Bhalla and his business interests. The customers had been misled by a lawyer with a vested personal interest who had advised them to go after Mr Bhalla instead of the actual owners of A N Buildwell Pvt. Ltd.

Mr. Shaunak Kashyap, who was appearing for Mr. Bhalla, submitted that they were not looking to press damages against the defendant as they were sympathetic towards customer concerns and stood with them in these difficult times. Pursuant to this statement, the court has directed Mr. Sharda not to make any defamatory or abusive statements, and the suit was disposed of with the order in favour of Mr. Bhalla granting him a perpetual injunction.

Read the offer documents carefully before making a property investment

Investment in real estate is always a smart choice. It is because you buy a property, keeping in mind certain factors like, the location, size, and definitely, the return on investment. No matter what your purpose is; whether you are looking to buy a permanent home or office, planning to rent it out, or sell it to make profits, the underlined point is—you seek profit out of ownership.

This is exact reason why, we discuss about being careful and vigilant, both, when you decide to buy a property. You don’t want to get caught in a legal hassle, for a property purchased by you through legitimate means and channels. And, you don’t want any surprises later, considering the high monetary value of a property. But still, it can happen to you. 

Common mistakes while buying a property:

·         Overlooking the actual price of the property to be purchased. There are overhead expenses, which every buyer should be aware of, so that there is no money surprises later. This overhead cost can be, the stamp duty, registration, car parking, advance maintenance, membership facilities, etc, which is no easy business as this expense can run in lakh

·         Not checking facts on transfer of ownership of property, if there are multiple proprietors involved. Also, checking on legal information related to the land (on which the property is built or under construction). It can be a case of disputed land, such as no government certification

·         Mistaking super-built area as the actual size of the flat, which may include the stairs, passage, etc

·         Check on the structure of the building. Many flats are now ready for redevelopment. Buyers should know when the flat was constructed, know if the construction is legal, and verify the seller is authentic. In case of resale, many of us are not aware if the seller has undisputed rights to sell the property, and that, it is not under any family dispute 

Know what should be done

A smart property investor will have all papers in order, and will even go a step ahead, to read all the documents carefully, to be well-aware and cautious. Before signing a paper, make sure to go through the subject (content) very carefully, so that you don’t end up buying what you did not expect. There should be no surprises later.  

Required documents to be obtained from the Builder/Vendor/Reseller

For flat buyers, it is important to have these documents and analyse each point carefully for a safe buy.

1)   Blue print of the plan from the builder

2)   Commencement certificate

3)   Completion certificate

4)   Previous sale deeds in case of resale

5)   Builder's No objection certificate [not relevant for land]

In case of land property

4) Permission for Non agriculture use of land (from a relevant authority)
5) 7/12 extract in case of land property

Legal help is the correct approach

Even if your Builder has appointed a lawyer to draft the legal agreement, regarding the property sale/transfer, it is likely (his) approach is influenced. Don’t allow the builder/owner a chance to give a lop-sided view on the final agreement. Instead, hire your own lawyer. It is a matter of exchanging huge money, and spending some extra-cash to make a secure transaction should not disturb you.

A lawyer will ensure all your drafted papers (attached to a sale agreement) are in top order. Legal professional help will ensure you have a detailed approach (in your interest) before you buy a property. It will also help you understand the technicalities of a sale agreement. It is all about a smart investment, a factor which is no longer limited to buying a house superficially.