Ladies / Gentlemen,

We complain about the ills associated with the real-estate industry and yet I believe the problem lies within all of us.

Which statement would describe you best?

a. I am not bothered by the black money component of a real-estate transaction I am more interested in the returns that go into my pocket.

OR


b. I rather compromise a little on the returns and deal in an all white real-estate transaction.

Which camp do you fall in? Anyone out there care to disclose their position?

The more we believe and in our actions follow through with (b) the better it will be.

Thoughts?
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  • Frankly, I will go with what suites me the best. If I had enough b-money, I would have bought a plot & built a house on my own. As I don't have this amount of b-money, I have no option but to buy a flat.

    The use of b-money is done who have them at first place. I have not seen cases where people withdraw lakhs from their banks & pay it in cash!!

    The good part of white is that on paper it increases your financial credentials. So, if someone has paid EMI for 50L & another for 30L (with 20L black), the first chap is going to get into good books of the banks & in future, you will be eligible for better loan/offers etc. :)

    So, if you have black, spend that first, if not, do you have any other option than white??:bab (35):

    * I am thinking as an end user, when I will think like an investor, the scenario may differ.
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  • I’d go with 2nd. In fact a few days back, I was close to striking a deal, which I just broke off as the builder wanted cash.
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  • One of my friends has withdrawn a huge amount from bank in cash, to pay 50% black money to builder. He has bought a 2 BHK in Navi Mumbai, so you can imagine the cash component.

    I would advocate only check, for the simple reason that you are promoting terrorism by using black money. Almost 25% of the large denomination notes in circulation (500 and 1000) are printed by Pakistan ISI.

    India Today had done a cover story on this sometime back.

    We need a poll.
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  • Originally Posted by abeerbagul
    I would advocate only check, for the simple reason that you are promoting terrorism by using black money. Almost 25% of the large denomination notes in circulation (500 and 1000) are printed by Pakistan ISI.

    Unbelievable!
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  • yes, the better option in the long run is to go with white but you are absolutely right - sometimes you are left with no option to buy if you don't pay up in black.

    As far as the gentlemen who withdrew a huge amount from the bank in cash - hopefully he/she realises that that is not considered black.

    In my experience it's the smaller regional builders who ask for black and furthermore the secondary sales draw black money. Example: original booking in white, when sold to next investor it turns black.

    I for one believe that we should not hesitate in paying a little extra in registration charges.
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  • Original booking is typically white - builder declares it. Then booking gets sold, investor does not declare the income at all.

    Paying in cash on ready to move in sale to avoid registration charges is short sighted - later on, you will have to pay more capital gains tax - or invest bigger sums in bonds to avoid it. Of course, govt should reduce the stamp duty - its ridiculously high.

    What do people actually do - they withdraw the amount in cash and hand it over or what? Is it done after you take possession of the house or what?

    Suppose he hits you over the head and makes off with 40L or whatever?

    Very shady business. If someone asks for payment in cash, I would say ta-ta bye-bye
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  • Originally Posted by Venkytalks
    Original booking is typically white - builder declares it. Then booking gets sold, investor does not declare the income at all.

    Paying in cash on ready to move in sale to avoid registration charges is short sighted - later on, you will have to pay more capital gains tax - or invest bigger sums in bonds to avoid it. Of course, govt should reduce the stamp duty - its ridiculously high.

    What do people actually do - they withdraw the amount in cash and hand it over or what? Is it done after you take possession of the house or what?

    Suppose he hits you over the head and makes off with 40L or whatever?

    Very shady business. If someone asks for payment in cash, I would say ta-ta bye-bye

    Then we need to have a deal with builder( like in Hindi cinema),
    both will meet alone in some old lonely place without any weapon for transaction:D
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  • Taking out money from bank and giving it as black to builder is a real dumb thing. One should not do such things and shall not encourage such things.
    People want to convert their black money to white. In fact many people pay extra 1 or 2 percent for this.

    You should never do this even if that costs you little extra money for higher stamp duty.
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  • Glad to see that more and more folks are demanding transactions in white.

    I am on a mission to try and fundamentally change this game.

    The one way it will change is that if real-estate opportunities are created to give those investing in white more returns than those investing in black.

    Thoughts?

    Regards,
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  • Originally Posted by pnb_2k
    Then we need to have a deal with builder( like in Hindi cinema),
    both will meet alone in some old lonely place without any weapon for transaction:D


    aur dishum dishum bhi hoga
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  • Hey Savvy,

    Can you share some details?
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  • Although momentarily, when people strike deals (most of them in a mix of some black and some white money) people believe that they have saved a couple of lakhs.

    However, in the larger scheme of things the following is happening.

    - The builder senses that there is a demand in the market and people have money and gets an incentive to hike his prices.

    - This makes the builder richer. So the builder now has more funds. He funds local goons or political parties through these funds. The parties make sure that the builder is protected and gets all regulatory approvals quickly due to the politicians blessing.

    - The politicians finally steal your and my taxes and put them straight into their pockets and their cronie's pockets.

    - The 2 lakhs that you saved today, were stolen off you by these larger scheme of things.

    The only difference is that you have become comfortable with these larger scheme of things over long period of times. And it doesn't affect you directly. When the builder gives you an offer, it is affecting you directly in front of your own eyes.
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