Following the latest GST council meet, finance minister Arun Jaitely had announced that the proposal to reduce the rate may be taken up in the forthcoming meeting this month.

NAGPUR: Contrary to the perception that reduction of GST rate from the present 12% to 5% on under-construction homes would make houses cheaper, the move may, in fact, hit the interest of low and mid-priced home buyers.

Reason: The input tax credit (ITC) is likely to be done away with if such properties are brought under the 5% composite tax slab of GST.

Last week, following the latest GST council meet, finance minister Arun Jaitely had announced that the proposal to reduce the rate may be taken up in the forthcoming meeting this month.

The segment to be affected would be buyers of homes costing up to Rs7,000 per square feet. Considering the current cost of construction, which more or less is standard, and the rate of tax applicable on the material, having 12% GST along with ITC makes a better deal rather than 5% on composite basis (without ITC).

ITC is a rebate available to every taxpayer in a chain-based system like GST. The tax paid at the time of purchase of any input or raw material for making the end product is deducted from final liability.

This prevents cascading effect. The anti-profiteering laws under GST regime call for passing on ITC benefit to consumers.

Even though the real estate sector is likely to have a tough year, new trends are expected to emerge

New Delhi: For potential homebuyers, the year 2019 is not expected to be any different from the last few years. Prices are likely to remain stagnant and developers will continue to focus on clearing existing inventory rather than launching new projects as they continue to grapple with regulatory changes like Real estate (regulation and development) Act, 2016 (RERA), goods and services tax (GST) and overall subdued demand.

In fact, 2019 is expected to be another tough year for real estate developers, given the ongoing liquidity problem, owing to the NBFC crisis.

Dilip Kumar, Saira Banu send defamation notice to builder

Actor Dilip Kumar and his wife Saira Banu have sent a defamation notice to a builder accused of trying to grab the actor's bungalow in Mumbai's upscale Pali Hill area of Bandra.

Veteran actor Dilip Kumar and his wife Saira Banu have sent a defamation notice to builder Sameer Bhojwani, for making false claims of ownership to their Rs 250-crore property in suburban Bandra. In the notice, they have sought an apology from Bhojwani and Rs 200 crores in damages, for defaming them in public with their statements.

On December 21, 2018, Bhojwani had issued a public notice claiming he was the ‘rightful owner’ of the said property. He had further claimed that the 96-year-old thespian was only a ‘lessee’ of the property. Taking objection to this, Kumar and his actress-wife, on December 31, 2018, sent a defamation notice to Bhojwani, for misleading the public with false and defamatory statements.

“Bhojwani has damaged the reputation of Dilip Kumar and Saira Banu in public, by making false and defamatory statement against them,” said the notice sent to Bhojwani by the star couple’s advocate, Chirag Shah. “Bhojwani issued the public notice on December 21, 2018, with a criminal intention to grab/encroach the legitimate rights of Dilip Kumar and Saira Banu, by creating a perception in public that he (Bhojwani) is the owner of the property,” it said.

“On the basis of forged and fabricated documents, Bhojwani is claiming ownership of a property, originally owned by Dilip Kumar and Saira Banu. Dilip Kumar and Saira Banu are the legitimate owners of the property situated at Pali Hill in Bandra and have acquired the same in September 1953,” the notice said.

Mumbai Grahak Panchayat on Dec 31, 2018 wrote to CM Devendra Fadnavis to bring more than 6,000 redevelopment projects in the three cities under MahaRERA as assured by him.

PUNE: For over a lakh families in Pune, Mumbai and Thane waiting endlessly for developers to complete projects under redevelopment, the only hope is to bring these units under the Maharashtra Real Estate Regulatory Authority’s (MahaRERA) purview.

The Mumbai Grahak Panchayat (MGP) on December 31, 2018, wrote to chief minister Devendra Fadnavis to bring more than 6,000 redevelopment projects in the three cities under Maha RERA as assured by him in May last year.

“The government had assured that all these projects will come under the purview of MahaRERA, which will set a deadline for these re-development projects and settle the rehabilitation components, including rent payment for the affected people,” MGP president Shirish Deshpande said.

“Though the Real Estate (Regulation and Development) Act cannot be touched, the state government can make necessary amendments to the MahaRERA rules to help the redevelopment projects. Several citizens associated with such projects are affected. They are neither getting rent nor alternative places to stay till the developers complete the redevelopment projects,” he said.

Ready for a zero-waste life? Let these green warriors inspire you to live more mindfully, intentionally and ethically this year.

Tender coconut water and paani puri are a few of Sahar Mansoor’s favourite things. As popular street food across India, these items may cost little, but they exact a steep ecological price. Their immediate by-product is usually a plastic straw that cannot be recycled or plates often disposed of carelessly, leading to clogged drainage. The empty coconut shell has a better chance of being turned into coir.

“For a long time, I would try to drink the coconut water without the plastic straw and end up pouring most of it all over myself,” says Mansoor, 27, who lives in Bengaluru. “Until I finally made the switch.” A couple of years ago, she began carrying a stainless steel straw and an empty lunch box everywhere so that she could enjoy her beloved snacks without adding to the burden of urban waste. Soon Mansoor was buying foodgrains only from a city store that sold them loose, free of packaging. She began to use home-grown personal care products made with ingredients her grandmother once used—multani mitti (Fuller’s earth), shikakai and reetha (soapnut). That led to further reduction of plastic waste. By the time Mansoor started her venture, Bare Necessities, in 2016, the amount of non-biodegradable dry waste she produced in over two years fitted into a 500ml jar.

Bare Necessities makes a range of products with ethically sourced and zero-waste ingredients, supplying them in eco-friendly packages using recyclable material. Sold from select outlets in Bengaluru, items such as the compostable bamboo toothbrush or the Boondh menstrual cup are steadily attracting buyers. “Our customer base is mostly women between the ages of 18 and 40,” says Mansoor. “Many of them are young mothers and millennials who want to consume more mindfully and associate with ethical brands that reflect their personal values.”

Home owners who wish to keep pets at home, need to ensure that their house caters to its needs and provides a safe environment for all. We explain the dos and donts

Besides providing companionship, there are also therapeutic benefits of owning a pet. Nevertheless, owning a pet is also a commitment and a responsibility. Consequently, home owners should ensure that the house is safe and comfortable for their pets. Although a pet can turn your house upside-down, things generally change as the pet grows up and you learn to adjust to its behaviour and needs.

The most common change that home owners make to the décor, is to remove all rugs. If you have cats or dogs at home, the carpets can turn into breeding grounds for fleas, cautions Lekha Gupta, senior architect, LAB (Language Architecture Body).

“Wooden flooring is usually slippery. Pets love to run around and wooden flooring may cause serious injury. So, avoid it,” adds Gupta.

All staircases must be barricaded, to prevent small pets from rolling down or trying to climb up, unattended. “Also barricade all grills that overlook lower floors, as your puppy may try to jump down. All balconies and windows with wide grills, must be meshed so that puppies cannot go through them,” advises Yashodhara Hemchandra of Yashbans Kennels in Bengaluru, a well-known pet groomer, who along with her two daughters, Rishya and Radhiya, offers various pet related services.

Realtors’ body NAREDCO also recommended that any dispute regarding new projects should only be heard by state regulators called RERA, and not consumer courts

New Delhi: Cases related to defaulting builders should be first taken up by regulators under the new real estate law RERA before being referred to the NCLT for insolvency proceedings, realtors’ body NAREDCO has suggested.

The association also recommended that any dispute regarding new projects should only be heard by state regulators set up under the Real Estate (Regulations and Development) Act, called RERA, and not consumer courts.

These suggestions were made by NAREDCO to the Union Ministry of Housing and Urban Affairs during a meeting that was called last week to seek suggestions from stakeholders for removing any difficulties under RERA, being implemented from May 2017.

This law was brought in to make the real estate sector transparent and eliminate fly-by-night operators.

“At present, complaints against builders are being taken up by consumer courts as well as real estate regulatory authorities established under the RERA. This is creating confusion,” NAREDCO President Niranjan Hiranandani told PTI.

The new projects should only be taken up under RERA, he said, and sought necessary changes in provisions of this law so that builders do not have to face litigation in multiple fora.

Hiranandani said the cases related to defaulting builders should be initially referred to RERA regulators for resolution of dispute before insolvency proceedings are invoked.

“If regulators under RERA fail to resolve, the dispute may be referred to the National Company Law Tribunal (NCLT) for adjudication,” he said.

Hiranandani, the co-founder and MD of Mumbai-based real estate major Hiranandani Group, also wanted uniformity in the implementation of provisions of this law across the country.

On defect liability of promoters till five years of possession of units, the association suggested that it should only be for structural and design defects as well as material used.

However, the defect liability of the promoter should exclude equipment like lifts and generators that carry warranty/guarantee by manufacturers.

Fittings related to plumbing, sanitary ware, electrical and hardware should be excluded as they have natural wear and tear, it said.

Hiranandani also said extension of registration of projects should be decided on case to case basis instead of the current provision of one year extension.

“Sometimes the construction work in projects gets delayed because of court orders or some other issues where builders are not in fault,” he said.

This story has been published from a wire agency feed without modifications to the text.

The average rent in MMR jumped to Rs 21,168 last year from Rs 17,912 in 2017 followed by Chennai and Bengaluru with 15% and 14% increase, respectively.

MUMBAI: The Mumbai Metropolitan Region (MMR), which includes Thane and Navi Mumbai, experienced a maximum rent inflation of 18% in 2018, the highest among five Indian cities, a recent survey reveals.

The average rent in MMR jumped to Rs 21,168 last year from Rs 17,912 in 2017 followed by Chennai and Bengaluru with 15% and 14% increase, respectively. Rent inflation in Gurugram was close to 11% while Pune experienced the lowest rate of 7%.

The India Rent Report 2018 (Residential) stated that the 18% inflation in MMR is based on the 2.5 lakh properties listed in this region with a website which conducted the survey. “We took data of 2017 for reference when rent was more or less stagnant across cities as demonetization had hit in towards the end of 2016,” it said.

Across the country, Mumbai follows Bangalore and Chennai in terms of the size of the security deposit. In Mumbai, the average deposit last year was Rs 89,850 while in Bengaluru it was Rs 1.3 lakh and Chennai Rs 1 lakh.

Among those surveyed in Mumbai, the top-most priority of those who wished to rent a place was water supply (85%), followed by security (76%), lift (61%) and parking (48%). Merely 20% wanted a swimming pool facility.

The survey found that 70% of tenants in Mumbai prefer no brokerage, followed by 16% who find houses through friends or family, 20% who find rental houses through real estate websites and 12% through brokers.

Real estate is the most undeserving of sectors for any largesse. It is one hell of a rigged market

Few sectors in the economy have the kind of positive impact on jobs and livelihoods as real estate. Arguably, few customer segments are more deserving of price relief than homebuyers. However, despite interest rate subventions, tax deductions under sections 24, 80C and 80EE, and tax-free profits for builders who concentrate on affordable housing, urban property is simply unaffordable to most city dwellers. The only two viable options are slums or commutes from distant peripheries.

So, if the GST Council, at its next meeting on 10 January, cuts rates on under-construction properties to 5%, and duties on cement are additionally brought down from an extortionate 28% to 18%, it will help more people buy properties.

However, consider a counterpoint. Real estate is also the most undeserving of sectors for any largesse. It is one hell of a rigged market, rigged by builders, babus and mantris at the state and central levels, because the corrupt hold a lot of their ill-gotten black wealth in real estate. They have a vested interest in keeping prices high, by artificially restricting supplies of land. No sector epitomises the term “regulatory capture” better than real estate, for land and property prices are rigged through opaque mechanisms such as building permits and zoning laws, and control of available land supplies by artificially limiting vertical building and making related infrastructure investment.

So, while there is a strong case for bringing down GST rates in general, including on real estate and its supply chain, if we don’t simultaneously reform the land markets, any tax relief will end up benefiting the wrong parties. Just as farm loan waivers benefit the richer sections among farmers, tax and other benefits for real estate will benefit the undeserving more than the deserving.

If you don’t believe that the land markets are rigged, just look at one statistic: between the last peak in January 2008 and now, the Sensex has risen around 78%; the S&P BSE Realty index, on the other hand, crashed, destroying 86% of its value. If this index value reflects the underlying profits in real estate, we should have seen real estate prices crashing by at least 50-60% over the last 11 years, but that has not happened. The only obvious takeaway is this: real value in real estate is captured outside balance sheets. This is how crooked the business is. So, any relief is going to largely protect the profitability of the builder-politician-bureaucrat conglomerate, not the real homebuyer.

In the Mumbai Metropolitan Region, between 2013 and now, unsold property inventories rose from 140,000 flats to 220,000, according to Anarock Property Consultants. Builders are announcing easy payment plans titled 20:80, 10:90 and even 1:99, where the buyer has to pay only 1% of the sale price upfront. But it is less about the consumer and more about generating short-term cash flows for those stuck with large inventories.

Another bit of data should clinch the argument. Rental yields computed for 14 cities by a property website average just 3%. Even a savings bank account pays more than that. So much for the argument that property is always a good investment.

This brings us to the larger question: why is the property market weak despite all the sops already directed at it by the Modi government? The answer, apart from demonetization, GST, RERA, et al, is that the market is targeted at a very small segment of the upper middle classes and the only way to expand the market to at least 10-15% of the population is to bring down prices, which means the builders, politicians, bureaucrats and “investors” who are sitting on loss-making illegal inventories have to take sharp haircuts of 30-50% at least.

Till this correction happens, whether through formal cuts, or through time-period adjustments facilitated by holding prices for, say, 5-10 years, the housing markets will not be freed. This means that a sector that should create millions of jobs in urban and rural areas is being held hostage by benami owners and investors who control the land markets through their vice-like grip on urban development policies, building permits, and infrastructure plans.

It is also important to mention two other parties with interests in keeping prices high —those who already own properties and have loans pending on them, and banks, which are striving frenetically to expand their retail loan offerings after having burnt their fingers with very large corporate loans that went bad. However, these segments can be protected by giving them some kind of regulatory forbearance on EMIs or easier provisioning against properties whose values may depreciate if market prices of property fall as a result of reforms and greater transparency.

We can’t avoid facing the elephant in the room. It is not possible to create millions of jobs and house our homeless without first reforming the factor market that needs it the most: land, especially urban land. We need to create a proper urban land market, and bring down its prices by adopting sensible policies to increase its potential supply so that our urbanisation is concentrated and capable of optimising commutes and collaborative networks of talented workers. Developing colonies of workers in distant suburbs is not the best way to create smart cities. Smart cities emerge from smart utilization of available spaces, not antiseptically designed satellite towns far away from workplaces.

With so many properties available at different rates, what is the ideal amount that a tenant should spend as rent? We suggest a few guidelines, to ensure that you can manage your rental outgo easily.

The rental housing market has many options, available at various rates. Consequently, it may be difficult for a prospective tenant to figure out how much to spend as rent. The answer to this, depends on one’s salary/income.

“Ideally, you should not be paying more than 30% of your salary towards rent and utilities (such as maintenance/water/electricity expenses). If you consider a monthly take-home salary of Rs 60,000, ideally, your rent should not be more than Rs 15,000,” advises Adhil Shetty, CEO of BankBazaar.com.

Shetty suggests you first determine where you want to live, as well as the security in the region, its accessibility and the commute to your workplace.

“Factor in all these aspects, before taking a call. For instance, you might get a good house in a reasonably-priced locality. However, it might make your commute lengthier and more expensive. So, a slightly smaller but expensive house closer to your workplace, might be a better trade-off,” says Shetty.