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Indian Real Estate News

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  • Re : Indian Real Estate News

    Realty industry seeks Maharashtra like premium deduction in other states

    Industry leaders observed that such move will not just trigger cost reduction but also enable the developers complete their projects on time with a major enhancement in developers operational capacity.
    NEW DELHI: After Maharashtra cabinet approved 50% reduction in premium for real estate projects upto December 31, 2021, real estate industry experts are urging other states to follow suit.

    Industry leaders observed that such move will not just trigger cost reduction but also enable the developers complete their projects on time with a major enhancement in developers operational capacity.

    "The reduction in premiums will serve as role model for other state governments to revive the real estate sector and bring back much needed employment and overall reduce the pain of the pandemic," said Sanjay Dutt, joint chairman, FICCI Real Estate Committee.

    "While on one hand it will reduce the stamp duty burden for the buyers, it will, on the other support the developers in building new projects at a reduced input cost thus effectively lowering the price for new projects in the long run," added Dutt.

    Raj Menda, joint chairman, FICCI Real Estate Committee said, "We hope that other states take similar initiatives."

    Developers within Maharashtra are already optimistic about the impact on reduction cpupled with stamp duty reduction it had previously announced. The state had earlier reduced the stamp duty rates from 5 per cent to 2 per cent till 31 December 2020 and 3 per cent till March 2021.

    "The decision coupled with reduced stamp duty cost would help the sector to witness accelerated sales due to the feasible home prices in the upcoming time. It would incentivize the purchasing decision of the homebuyers and boost the residential real estate demand," said Kamal Khetan, chairman and MD, Sunteck Realty.

    Vikas Chaturvedi, CEO, Xanadu Realty said, It will strengthen the supply side, reduce project timelines, and rationalise input costs for developers in the state. Moreover, since the direct benefits are being passed onto the end-consumer, it will stimulate the regional market in Maharashtra by bolstering consumer purchase sentiment and investor interest."

    "This will not just increase sales of homes owing to reduced prices, but this will also help churn the wheels of the overall state economy given the far reaching impact of the construction sector," Bhavin Thakker, MD (Mumbai), Savills India.








    Premium reduction in Maharashtra: Realty industry seeks Maharashtra like premium deduction in other states, Real Estate News, ET RealEstate (indiatimes.com)

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    • Re : Indian Real Estate News

      Real estate industry seeks Rs 1.25 lakh crore stress fund for ailing sector

      For rental housing, NAREDCO seeks enhancement in HRA Tax Exemption; an increased depreciation rate for the rental projects like in commercial buildings and allowing ‘carry on’ of loss from rental income will make a difference.
      NEW DELHI: The ongoing Covid-19 pandemic has impacted global economies and Indian real estate is not spared from the depths of despair. Hence real estate sector's expectations from the upcoming Union Budget 2021 are high.

      NAREDCO, an industry body, is seeking estimated Rs 1,25,000 crore via many HFCs/NBFCs who they say are ready to establish such stress funds for ailing real estate sector. According to them, this will allow for faster appraisals and sanctions.

      "While the real estate industry appreciates the initiative of establishing the SWAMIH fund for Rs 25,000 crore to help real estate sector, allowing more such stress funds will help facilitate the last mile funding for stressed and stalled projects," said Niranjan Hiranandani, national president, NAREDCO.

      Enhancing loan to value (LTV) ratio up to 90 per cent across the board for home loans for affordable houses of Rs- 30 lakh or less and the same facility should be extended to MIG and HIG, is another demand that industry has put forward.

      "Allowing interest on home loans for income tax deductions without any ceiling, current interest deduction under section 24 of IT Act 1961 on housing loans of Rs. 2 lakhs should be removed in order to incentivise home buyers.

      Bring long term capital gains at 10 per cent (on par with provision of section 112 for equity shares); and reducing the period of holding house property to up to 12 months from existing 24/36 months to qualify as a Long-term Capital asset is need of an hour," said Rajeev Talwar, chairman, NAREDCO.

      "Also, loss from house property should be fully allowed to be adjusted against other heads of income. In case of unadjusted loss, it should be fully allowed to be carried forward to subsequent years," said Parveen Jain, vice-chairman, NAREDCO.

      For rental housing, NAREDCO seeks enhancement in HRA Tax Exemption; an increased depreciation rate for the rental projects like in commercial buildings and allowing ‘carry on’ of loss from rental income will make a difference.

      To promote rental housing "The deduction of 30% from the annual rental income (for purpose of maintenance) should be increased to 50%. This will not only improve ROI but will also encourage citizens from investing in residential properties for giving on rent,” said Hiranandani.

      Similarly, affordable housing will benefit from increasing completion period to six years; while enabling concessional lending rate for Affordable Housing Projects. Extending the Credit Linked Subsidy Scheme (CLSS) for all segments will support home buyers, added Talwar.

      Realtors want the ban on subvention schemes needs to be reconsidered for the direct benefit to the home buyers. Jain said, “RBI and the National Housing Bank (NHB) should reconsider the ban imposed on subvention schemes. The ban is not in favour of home buyers as a large proportion of them do not have the capacity to pay both EMIs on their home loans as well as house rents."

      One-time restructuring of loans, allowing external commercial borrowings (ECBs) for the real estate sector and reforms for special economic zones, including extending notification date for IT/ITeS SEZs and withdrawal of MAT are some other demand put forward by NOAREDCO which thinks this can go a long way in ensuring green shoots in real estate sector.











      Real estate expectation from Budget 2021: Real estate industry seeks Rs 1.25 lakh crore stress fund for ailing sector, Real Estate News, ET RealEstate (indiatimes.com)
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      • Re : Indian Real Estate News

        ndia considers easing rules to attract FDI in construction sector

        A proposal to allow limited liability partnerships to invest in the construction of townships, roads, hotels and hospitals is under discussion, the people said, asking not to be identified citing rules.
        India is considering easing foreign investment rules for sectors ranging from construction to animation to lure overseas capital needed to create jobs in an economy cratered by the pandemic, people with knowledge of the matter said.

        A proposal to allow limited liability partnerships to invest in the construction of townships, roads, hotels and hospitals is under discussion, the people said, asking not to be identified citing rules. A plan to allow 100% foreign direct investment in animation, visual effects, gaming and comics sector may also find mention in the government’s budget to be presented Feb. 1, one of the people said.

        Allowing LLPs will open a new investment avenue at a time when the government of Prime Minister Narendra Modi is struggling to revive the economy from its worst annual contraction on record and generate employment in a country still shedding jobs months after the pandemic-induced lockdown. The government estimates India will require investment worth $777 billion across infrastructure for development by 2022.

        A finance ministry spokesman did not answer a call made to his cellphone outside of business hours Tuesday.

        The construction sector received FDI inflows worth $25.7 billion between April 2000 and September 2020, government data show. The relaxation in rules is also likely to help the Modi government get closer to its target of creating affordable housing for all in urban areas by 2022 and building 100 smart cities.

        Currently, foreign investors have to meet certain conditions for investing in the construction development sector such as a three year lock-in period before exiting. Allowing LLP firms will afford the sector ability to receive foreign investments more easily, the people said.











        FDI in construction sector: India considers easing rules to attract FDI in construction sector, Real Estate News, ET RealEstate (indiatimes.com)
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