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Indian Real Estate News

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Indian Real Estate News

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  • Re : Indian Real Estate News

    Can real estate be India’s next aviation sector

    The realty sector aims to create a similar demand and supply situation of giving every Indian a house of his ownMagicbricks | October 11, 2017, 07:48 IST

    India’s housing wants to get affordable and it is exploring how. It dreams to be the next aviation sector of India, which showed exponential growth by doling out cheap air tickets to India's common man.

    The realty sector aims to create a similar demand and supply situation of giving every Indian a house of his own.

    As the Indian government is patting its back for giving out a handful of sops to the housing sector and is wondering why it should not be given its due credit, the real estate industry is still getting its act together after facing four ‘tsunamis’ -- demonetisation, rera, gst and insolvency.

    At a recently held event in New Delhi, political leaders and government officials from the housing sector gave an audience to the developers on policies’ overhaul.

    Speaking at the event, Narender Singh Tomar, Minister of Housing & Urban Affairs, Rural Development, Panchayati Raj and Drinking Water & Sanitation, said the government was committed to fulfil the Housing for All dream. He put the onus of growth in the sector on developers saying it is the collective responsibility of all the stakeholders to do so.

    “The glitches and loopholes, if at all, prevail in the real estate sector despite the fact that the government has already brought out friendly regulations. The earlier hostile clauses in the real estate policies have been kept aside to ensure equitable growth in the real estate and construction sector, it is still open for improvements,” explained Tomar.

    Durga Shankar Mishra, Secretary, Ministry of Housing and Urban Affairs (HUA) counted a number of measures introduced by the government for the housing sector – CLSS, online building approval, easy land acquisition, access to technology and one tax under GST.

    “The government has extended the Credit Linked Subsidy Scheme (CLSS) to the mid-income group home buyers. This interest rate subvention scheme should generate demand in the housing sector. We need developers’ contribution as they need to take the benefit to the people who can consume the ready inventory,” said Mishra.

    However, is this enough for the real estate sector to achieve the growth it aspires for?

    The developers and industry experts are far from being pleased. They raised a lot of concerns which they assert are hindrances to attain the Housing for All Mission. For them, 2017 has not been a normal year for any trade in the country, including the real estate sector.

    The developers agreed that low-cost housing is the future of the country but they were still unsure about its timeline. There were murmurs of introducing amendments in the recent policy changes.

    “When GST was introduced, we were told that it will not cause any incremental tax on the housing sector. Which meant that it will be tax neutral. Industry experts said that a minimum escalation of costs comes to 3 per cent for projects and about 5.5-6 per cent where land cost is higher. The government is charging tax, irrespective of affordable housing or regular housing,” said Dr Niranjan Hiranandani, president, Naredco and co-founder and managing director of Hiranandani Group.

    “We want the government to make housing sector tax neutral by making the adjustment for land cost. We are not asking anything special. For affordable housing the tax should not be 12 per cent but 6 per cent. The land cost are incrementally increasing. It is the need of the hour to use the government land for affordable housing to make it economically viable,” Hiranandani added.

    Industry experts agree with him. “Sales are down and it will take a long time for the market to revive. This is not the year for assessments,” said Ramesh Nair, CEO and Country Head, India at JLL.

    Developers need the government to show more passion for the real estate sector. The government, on the other hand, wants the sector to be passionate about the new policies. Between them is the consumer who nestles the passion of owning a home and wonders when he will be able to attain it.

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    • Re : Indian Real Estate News

      GST Council to discuss bringing real estate under its ambit: Arun Jaitley

      The matter will be discussed in the next meeting of the GST, which will be held on November 9, in Guwahati, Jaitley said, while delivering a lecture at Harvard UniversityPTI | October 12, 2017, 13:28 IST

      WASHINGTON: Identifying real estate as the one sector where maximum amount of tax evasion takes place, Finance Minister Arun Jaitley today said there was a strong case to bring it under the ambit of the GST.

      The matter will be discussed in the next meeting of the GST, which will be held on November 9, in Guwahati, Jaitley said, while delivering a lecture at Harvard University.

      "The one sector in India where maximum amount of tax evasion and cash generation takes place and which is still outside the GST is real estate. Some of the states have been pressing for it. I personally believe that there is a strong case to bring real estate into the GST," Jaitley said, while delivering the 'Annual Mahindra Lecture' on India's tax reforms.

      "In the next meeting itself, we are addressing one of the problem areas or at least (having) discussion (on) it. Some states want, some do not. There are two views. Therefore, by discussion, we would try to reach one view," he said.

      The finance minister said the move would benefit the consumers who will only have to pay one "final tax" on the whole product.

      "As a result, the final tax paid on the whole product in the GST would almost be negligible," he said.

      Jaitley said the reduction in eventual expenditure coupled with incentivising people to enter the tax net may also help reduce the size of "shadow economy".

      A 12 per cent GST is levied on construction of a complex, building, civil structure or intended for sale to a buyer, wholly or partly. However, land and other immovable property have been exempted from GST.

      On demonetisation, Jaitley said it was a "fundamental reform" which was necessary to transform India into a more tax-compliant society.

      "If you see the long-term impact of it, demonetisation brought in more digitised transactions; it brought the issue to the centerstage. It expanded the individual tax base. It compressed the cash currency by three per cent which was operating in the market," Jaitley said.

      "Those objectives are for the long-term. No doubt there are short-term challenges, but (necessary) for transforming India from a non-compliant to a more compliant society," he said.

      The finance minister said India had historically been one of the least efficient tax system in the world with an extremely small tax base.

      "Frankly, over the last several decades, serious efforts, real efforts to expand this base had not been made. You had marginal efforts," he said, adding that systematic efforts to challenge the "shadow economy" were made only recently.

      "In the last few years, the bulk of the increase in tax payers has not been in terms of number of companies but individuals who are coming into the tax net," he said.

      Jaitley said some people had "misunderstood" the objective of demonetisation "which wasn't to confiscate somebody's currency".

      "Obviously if somebody has currency and deposits in the bank, it does not become lawful holding. They still have to account for it. Therefore, the anonymity which was attached to a cash currency came to an end and that holding got identified," he said.

      "The government was able to trace out about 1.8 million people whose deposits are disproportionate to their normal incomes. And they are all to answerable to the law and pay their taxes," he said.

      Jaitley is on a week-long stay in the US, during which he will participate in annual meetings of the IMF and the World Bank.

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      • Re : Indian Real Estate News

        CGWA against groundwater use for construction purposes

        The body has barred use of fresh groundwater for recreational purposes like swimming pools, the draft saysPTI | October 16, 2017, 07:44 IST

        NEW DELHI: The Central Ground Water Authority (CGWA) has proposed against granting permission for extracting water for construction activities in a bid to ensure that the water table does not get depleted much.

        In the draft guidelines "for issuing no objection certificates (NOC) for groundwater withdrawal", it has also said that the use of groundwater for purposes other than drinking, fire-fighting, horticulture etc, shall not exceed 25 per cent of the total extraction.

        The body has barred use of fresh groundwater for recreational purposes like swimming pools, the draft says.

        The authority came out with the draft guidelines four days ago and has sought suggestions and comments on it within 60 days.

        The guidelines, the authority has said, will supersede all the existing ones, if made effective.

        "No-objection certificate (NOC) shall not be granted for extraction of groundwater for construction activities in project in critical and over-exploited areas," the guidelines say.

        According to the authority, there are four categories of areas based on their use of ground water.

        One is 'safe' areas which have ground water potential for development. Another is 'semi-critical' areas where cautious groundwater development is recommended.

        'Critical' and 'over-exploited' areas are those where there should be intensive monitoring and evaluation and future development be linked with water conservation measures.

        According to the 2013 survey of 6,584 units (which could be blocks, talukas, mandals, watersheds), around 1,034 were found to be over-exploited, while 253 were critical and 681 semi-critical.

        As many as 96 were identified as saline, while 4,520 were marked as "safe".

        The authority has also proposed that all users drawing or proposing to draw groundwater through non-energised (pumps) and pumps of up to two horse power from a single tubewell on their premises will be exempted from seeking the NOC.

        Individual households and connections having more than one tubewell or borewell, or drawing ground water using pumps of more than two horse power from a single tubewell or borewell on their premises need to apply for permission.

        The authority has said that since priority is to be accorded to drinking water, the NOC will be granted for extracting groundwater through existing or new groundwater extraction structures only for drinking and domestic purpose "even in notified areas".

        "NOC for ground water withdrawal will be considered only in cases where the water supply department concerned is unable to provide adequate amount of water in the area," the draft states.

        Government water supply agencies are also required to seek an NOC from the authorised officers for existing as well as new schemes based on ground water resources, the authority has said in the draft.


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