News Letter

Need more money after taking a home loan? Opt for a ‘top-up’

February 15, 2019 Ref - housing.com

If you are already paying the EMI on an existing home loan and need more money, you can opt for a top-up loan. Here’s a look at the eligibility criteria, tenure and how you can take this loan

When a person buys any property, it generally involves taking a home loan and also exhausting a substantial amount of one’s savings, to fund the margin money. Moreover, home buyers also try to avail of the maximum possible loan amount, to get the best home. Sometimes, a situation may arise, where you need a substantial amount of money, while you are also servicing an existing home loan. There is an option called a ‘top-up home loan’, to deal with such situations.

To provide relief to Amrapali home buyers, SC favours allowing registration of flats

February 15, 2019 Ref - housing.com

To provide relief to the hassled home buyers residing in flats built by the embattled Amrapali Group, the Supreme Court has indicated that it may allow them to register their residences with the authorities concerned.

The Supreme Court, on January 16, 2019, observed that the flat buyers of Amrapali Group were not able to register their flats with the authorities concerned, as they did not have the completion certificate and if the need arises, it may invoke powers of extraordinary jurisdiction under Article 142 of the constitution, to direct for registration of the flats.

“Amrapali home buyers should not suffer due to want of completion certificate and ongoing litigation. We may direct the authorities to register their flats, on payment of proportional amount to the Noida and Greater Noida authorities. If the need arises, we may invoke Article 142 of the constitution, to issue directions,” a bench of justices Arun Mishra and UU Lalit told the counsels appearing for the home buyers and Amrapali.

It asked the parties to give their legal suggestions on the next date of hearing, so that directions could be passed to the authorities. Advocate ML Lahoty, appearing for the home buyers, said that it will be a big relief to the flat owners and they would submit the legal suggestion on next date of hearing.

IIFL AMC raises ₹950 crore Category II AIF

February 15, 2019 Ref - livemint.com

IIFL AMC, which is targeting up to ₹1,100 crore corpus for its Category II AIF, is expecting another ₹50-100 crore from some institutional investors, says CEO Prashasta Seth.

Mumbai: IIFL Asset Management Co. Ltd (IIFL AMC) has raised Rs 950 crore for its IIFL India Private Equity Fund, a senior executive said.

Mint reported in May about the launch of the first private equity fund from IIFL, which manages several funds under its alternative assets platform.

The fund is a close-ended Sebi-registered Category II Alternative Investment Fund.

While the firm has closed active marketing of the fund, it is still in talks with a few institutional investors who are looking at investing in the fund, said Prashasta Seth, chief executive at IIFL AMC.

“We have done bulk of the fundraise that we wanted to do. From an active high networth individual’s marketing point of view, we have closed the fundraise. But we are keeping it open for a few institutional investors that are looking to come into the fund,” said Seth.

IIFL was targeting to raise around ₹1,000-1,100 crore for the fund, he said.

“We have raised ₹950 crore and we are expecting another ₹50-100 crore from some institutional investors,” he added.

The private equity fund focuses on backing professional entrepreneurs and has the ability to invest across multiple life stages of a business.

“We will back professional entrepreneurs from this fund. We can come in at multiple stages right from the inception stage to series A. We have the ability to commit multiple rounds that will help fund across the life cycle of the business which will enable entrepreneurs to focus on the business and not be worried about fund raise every 6-12 months,” said Seth.

The fund has already announced one investment so far.

It is investing around ₹100 crore in Tamil Nadu-based Kadaieshwar Homefin Pvt. Ltd, founded by C. Ilango, former managing director and chief executive of mortgage lender Can Fin Homes.

“We have a couple of more investments which are in different stages and will be done in the next two to three months,” said Seth.

IIFL plans to deploy the fund over the next three years and is looking to build a portfolio of around a dozen investments.

“We will make between 12-15 investments through the fund. We will invest between ₹50-100 crore in these companies. We expect to deploy the fund over the next three years,” said Seth.

The fund will focus on the financial, consumer, healthcare and technology sectors, he added.

IIFL’s alternative assets business is currently managing several funds across various asset classes.

IIFL has raised close to ₹4,700 crore since 2012 across various real estate funds under Sebi’s (Securities and Exchange Board of India) alternative investment fund regime.

Student housing: Indian real estate’s next big segment in 2019?

February 15, 2019 Ref - housing.com

With students enrolling for higher education in the country growing at a rate of nine per cent annually, we examine the potential of the student housing segment and whether it can emerge as a viable real estate asset class.

Mobility of students in India is increasing and it is common to see students moving to different cities, for higher education. However, there remains a dearth of good hostels and other amenities, to accommodate this floating population. Consequently, student housing, as a real estate asset class, is slowly gaining importance. “The paying guest (PG) market in India is unorganised, with barely any uniform standard in place. Students are searching for places to stay, without wanting to get into the hassle of renting a flat or an apartment. Hence, there is a high demand for co-living spaces and student housing, unlike before,” says Nikhil Sikri, co-founder and CEO of Zolo.

While student housing co-living spaces are already big segments in the real estate markets in the US and Europe, investors are

now looking at student housing as the next big trend in India.

“Some of the student-centric cities like Bengaluru, Pune and Chennai, cannot accommodate the rising student population. Moreover, students do not want to worry about food or housekeeping. They care about being economical and being a part of a friendly community. This makes co-living spaces or student accommodation the perfect choice, as it provides well-facilitated, serviced spaces, catering only to students and young professionals,” adds Sikri.

Only builder-buyer agreement can protect your rights

February 15, 2019 Ref - economictimes.indiatimes.com

Buyers must read this document carefully as the terms and conditions mentioned will help to ensure that your rights are protected and you get what you have paid for.

The builder-buyer agreement is a very important legal document for home buyers. It is a contract which contains all the terms and conditions which have to be complied by both the buyer and the builder. While buying property, whether for personal use or as an investment, the builder-buyer agreement is important from the legal perspective as well. Buyers must read this document carefully as the terms and conditions mentioned will help to ensure that your rights are protected and you get what you have paid for. This agreement can empower you to stand up for your rights at any legal or non-legal forum.

Should you give up on a good property because of imperfect Vastu?

February 15, 2019 Ref - housing.com

To what extent are Vastu Shastra norms important, if all the other aspects of a property meet the home seeker’s requirements? We look at the Vastu principles and remedies, to help buyers arrive at a decision.

Consider this scenario: after a prolonged search, you get an unbelievable offer on a property. However, you find that the property does not conform to Vastu norms. Should you drop the offer? This is a dilemma that many home buyers face. While some home seekers may persist and purchase a flat despite Vastu faults, others may reject it outright. The question is, to what extent should one heed Vastu norms?

Vastu Shastra is a ‘science of architecture’ and its principles have been followed in India for centuries. It incorporates many Hindu beliefs and the designs are intended to integrate the functional aspects of structures and geometric patterns, with nature and forces like the sun and wind.

“Vastu holds an enormous importance in our culture. While we must check the basic Vastu compliance while buying a home/property, we must also understand that not all the principles of Vastu may be satisfied in any property. However, the science is such that there are modifications and solutions, available for most of the conceivable problems,” says Ricky Doshi, founder of ARD Studio.

Actress Jennifer Winget: My weekend home in Goa rejuvenates me

February 15, 2019 Ref - housing.com

Actress Jennifer Winget, who bought a weekend home in Goa, feels that it is the perfect place to relax and buying the home has been one of the best decisions of her life.

“For many years, I wanted to buy a home in Goa. Whenever I went there with my family or friends, I enjoyed my stay. I love the place for its natural beauty, its beaches and the food. Goa makes me feel relaxed. It is an ideal place for a weekend home,” says actress Jennifer Winget, who bought a home in Goa last year.

Winget was hunting for a home for two years and finally zeroed in on her house in Reis Magos, north Goa. Her house is barely 15 minutes away from the beach.

“When my agent showed me this new property, I liked it instantly. There was something positive about this place. It is a contemporary and charming house, with a blend of traditional elements and a small garden too. I called my parents and in just one week, the deal was done. It was one of the best decisions of my life. It is a dream come true,” says the actress, who is currently seen in the television show Beyadh and has also acted in Saraswati Chandra, Karthika, Kumum, Kasuti Zindagi Ki, Kya Hoga Nimmo Ka and also in the movie Phir Se.

Will a composition scheme under GST help the real estate sector?

February 15, 2019 Ref - moneycontrol.com

The scheme may have a detrimental effect on real estate prices due to the blockage of input tax credit.

A ministerial panel headed by Gujarat deputy chief minister Nitin Patel will look into the possibility of rationalisation of GST rate for the real sector besides formulating a composition scheme — a preferential scheme under GST extended to consumer centric sectors or industries. The move follows the GST Council meeting on January 10 that referred matters pertaining to the sector to the Group of Ministers due to lack of consensus.

The GoM will now decide on the issue of reducing the current GST levied on real estate which is 12 percent to five percent.

Tax experts say that while composition schemes may look attractive, one needs to do a thorough analysis to weigh whether a reduced GST rate of 5 percent without input tax benefit is better than a standard rate of 12 percent with full input tax credit.

At present, GST is levied at an effective rate of 12 percent (standard rate of 18 percent less a deduction of six percent as land value) on premium housing and effective rate of eight percent (concessional rate of 12 percent less a deduction of four percent as land value) on affordable housing on payments made for under-construction property or ready-to-move-in flats where completion certificate has not been issued at the time of sale.

However, GST is not levied on buyers of real estate properties for which completion certificate has been issued at the time of sale.

“If the government reduces the eight percent GST rate on affordable housing to five percent without extending the benefit of input tax credit, sale prices may increase and real estate developers may pass on the burden/increase in price of apartments for most low and middle income projects. This may impact the government’s affordable housing scheme,” says Harpreet Singh, Partner, KPMG.

Builders are hoping that the government will allow input tax credit on under-construction residential properties even after reducing the GST rate to five percent.

Hyderabad: The most affordable metro in the country

February 15, 2019 Ref - housing.com

Hyderabad has emerged as one of the best cities in India, in terms of quality of life. We look at what's on offer in the real estate market in this city and whether it makes sense for a home buyer to invest here.

Hyderabad has always been known as a price-conscious metropolitan city in India. Hyderabad has held the top spot, among all Indian metros, in Mercer’s Quality of Living survey, for four years in a row. The city has also scored well across other aspects, including a relatively low crime rate, good schools, good hospitals, low pollution levels and a flourishing job market. With the increase in the number of jobs being created, there is a corresponding increase in the demand for housing and infrastructure.

Capital gains computation for encroached/litigated properties

February 15, 2019 Ref - housing.com

The market value of a property that has been encroached upon or is under litigation, may be significantly lower than its ready reckoner value. We examine the options for buyers and sellers, in terms of computing the capital gains on such properties.

Capital gains under the income tax laws, are computed by deducting the cost of acquisition of the property from sale consideration of the same. Depending on the holding period of the property, one is allowed to enhance the cost of acquisition, by using the cost inflation index notified by the government every year. The sale consideration, as mentioned in the agreement, may not always be considered for income tax purposes. The income tax laws have elaborate provisions to determine sale consideration with respect to land and buildings.