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Is Real Estate the best place to park black money?

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Is Real Estate the best place to park black money?

Last updated: April 2 2009
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  • #11

    #11

    Re : Is Real Estate the best place to park black money?

    Originally posted by Natarajg007 View Post
    Whether RE is the best place to park BM is another question? Can I sell one RE and buy another in a convenient location without BM troubles is my question. For example, one reason I have been trying to sell some property in Chennai is to buy for that price in Bangalore. Now it is almost impossible to do it. Suppose the price I sell is 100 then in Chennai with such absurd guideline values and Registrars preventing fair deals, I wont get more than 20 in white and in the best case will be 50. Now the remaing 50 is BM whether I like it or not, whether the buyer likes it or no. So I might sell my property to a Gentleman with 100% white money, but if I cant register my transaction due to the registrar it becomes black! Not my fault or the fault of the buyer.
    Now in Bangalore the rate of White:Black is not as bad as Chennai. So if I sold for 100 and took say 30 white and 70black and bought a property for 100 in bangalore I will need to pay 50white and 50black or even higher percentage of white. Now I need to get the remaining white and need to hide the black.
    Explains why RE in Chennai might never fall and why having RE in Chennai is worthless if you want to liquify it into cash!
    no no natraj you can register a transaction at any value you(both parties) choose the stamp value is to be paid for the transaction or guideline value whichever is higher.the registrat can only insist you pay the guideline value or 8% transaction value (whichever is higher). you can choose to say you sold for Rs 1/ also doesnt matter to the Registrar.
    but the capital gain will be calculated on the sale price or guideline value whichever is higher.there is no cieling on the price only minimum price(guideline value) is insisted

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    • #12

      #12

      Re : Is Real Estate the best place to park black money?

      Originally posted by Useless View Post

      Explains why RE in Chennai might never fall and why having RE in Chennai is worthless if you want to liquify it into cash!
      When one cant liquidate an asset(RE) its dormant asset and when its not a livable house its of no use other than helping to claim 1C 2C 3C. Am not sure the Nth C the lunatic is quoting now.

      This illiquidity is because of the exorbitant prices quoted by worthless people . With the increasing job cuts across all the industry one can be rest assured until the RE Guys and Prices plummet into your foot.
      Last edited March 19 2009, 09:18 PM.

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      • #13

        #13

        Re : Is Real Estate the best place to park black money?

        Originally posted by sethugm View Post
        When one cant liquidate an asset(RE) its dormant asset and when its not a livable house its of no use other than helping to claim 1C 2C 3C. Am not sure the Nth C the lunatic is quoting now.

        This illiquidity is because of the exorbitant prices quoted by worthless people . With the increasing job cuts across all the industry one can be rest assured until the RE Guys and Prices plummet into your foot.
        Dear friend,

        I agree. Lack of liquidity is due to the high prices being quoted by the promoters/builders as also the buyers are awaiting further drop in the prices.
        I have been noticing that in the away from city areas, the prices are coming down even to the tune of 25 % or so. Where as, in the city areas, they have come down to a small extent only and here too no new projects are coming up and only already started projects are going on.
        In Saidpaet area, in Alandur Road nearer the sub way, one project with 2 bed rooms are going on and the rate settled is Rs. 4500/sq. ft. Due to locational advantage, I gather all the flats have been sold of very fast and the project is also progressing fast. I feel, people still go for buying for their own use in good localities/of their preference even if the prices do not come down appreciably.
        Today, I saw an advertisement in The Hindu, one developer has advertised that the buyer need to pay only 10% and the balance 90% can be the house loan. This is not in line with what we hear that banks are insisting on margin money of even 25 to 30 % for the new house loans now for fear of reducing value during the course of the repayment.

        ks2071746

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        • #14

          #14

          Re : Is Real Estate the best place to park black money?

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          • #15

            #15

            Re : Is Real Estate the best place to park black money?

            Originally posted by sethugm View Post
            When one cant liquidate an asset(RE) its dormant asset and when its not a livable house its of no use other than helping to claim 1C 2C 3C. Am not sure the Nth C the lunatic is quoting now.

            This illiquidity is because of the exorbitant prices quoted by worthless people . With the increasing job cuts across all the industry one can be rest assured until the RE Guys and Prices plummet into your foot.
            So Dear Pitchakaran thinks that a said price is high because he cant afford it. Let us assume a ground of land is as low as Rs 10lakhs, to please our Pitchakaran. Now if someone has 100 grounds to sell then it again will be worth 10crores. Now on the converse suppose a ground costs 10 crores, then it means that one should be able to reuse it to sell 100 blocks for 10 lakhs or 10 blocks for 1crore each or 2 blocks for 5crores each.
            In other words affordability is a person's ability and worth is determined by the demand and supply not by some pitchakaran's needs.
            BTW keeping land is an extremely useful investment. Since its appreciation is higher than any rental value as also the fact that you pay no tax until to sell it.
            This is like telling whether one should invest money in a MIS (monthly income scheme) or a FD (Fixed deposit). PItchakarans need MIS since they will die without it. Others choose FD.
            I hope Mr Pitchai has got the answer!

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            • #16

              #16

              Re : Is Real Estate the best place to park black money?

              Originally posted by abk View Post
              no no natraj you can register a transaction at any value you(both parties) choose the stamp value is to be paid for the transaction or guideline value whichever is higher.the registrat can only insist you pay the guideline value or 8% transaction value (whichever is higher). you can choose to say you sold for Rs 1/ also doesnt matter to the Registrar.
              but the capital gain will be calculated on the sale price or guideline value whichever is higher.there is no cieling on the price only minimum price(guideline value) is insisted
              Nope ABK. WHat you are telling is Theory. No doubt. In practice the Registrars dont allow registration at higher prices since they tend to have an obligation to the residents of the locality (mostly the influential lot) who dont want higher guideline values since they deal in BM.
              FOr example if the guideline value in an area is 1000 and if I register at 3000 then the guideline value tends to increase. THis means the next time the local BM expert wants to sell out he has to collect most of his money in white which he does not like.
              What I told u is the practical truth in CHennai! Check it out.

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              • #17

                #17

                Re : Is Real Estate the best place to park black money?

                Originally posted by ks2071746 View Post
                Dear friend,

                I agree. Lack of liquidity is due to the high prices being quoted by the promoters/builders as also the buyers are awaiting further drop in the prices.
                I have been noticing that in the away from city areas, the prices are coming down even to the tune of 25 % or so. Where as, in the city areas, they have come down to a small extent only and here too no new projects are coming up and only already started projects are going on.
                In Saidpaet area, in Alandur Road nearer the sub way, one project with 2 bed rooms are going on and the rate settled is Rs. 4500/sq. ft. Due to locational advantage, I gather all the flats have been sold of very fast and the project is also progressing fast. I feel, people still go for buying for their own use in good localities/of their preference even if the prices do not come down appreciably.
                Today, I saw an advertisement in The Hindu, one developer has advertised that the buyer need to pay only 10% and the balance 90% can be the house loan. This is not in line with what we hear that banks are insisting on margin money of even 25 to 30 % for the new house loans now for fear of reducing value during the course of the repayment.

                ks2071746
                KS, What is high is a relative value? IN 2000 a price of 2000 psft in Mylapore was considered high. In 2008 a value of 3000psft is the price in Urapakkam, Medavakkam etc. ANy justifications? Well salaries went up. So what is the mistake in hiking prices.
                TO take an example, a retired colonel was stating that his pension based on 1990s retirement time is about 14k wile a current colonel retires at 28K. Now even govt pensions have gone up so much. So it is not a fault of the builder or seller, just the fact of life. So in reality if jobs REALLY VANISH as many seem to be claiming just looking at someperipheral job losses then if consequent demand becomes so bad that Sethugm like folks dont have a job, folks like you get a salary of 10K which you claimed was the salary (when u were working...i assume u retired now!) in 1990s then price of these flats in Mylapore will go back to 2000 or lesser and Urapakkam and MEdavakkam flats will just remain UNSALEABLE.
                IN other words in CHennai in particular after every boom there is a dull period and at that time non prime properties just have NO QUOTES. So if you bought one of those plots in that CHengalpet line in the past 2 years and if it was sold to you at 500psft and if it cost when SALEABLE at the peak of 1000psft then if market really falls as claimed it will become NON SALEABLE. So even if you sell at 100psft u wont find a buyer. The problem is in new areas there are no houses and no facilities.
                So as I always said and as you remarked above, on the outskirts properties can become JUST UNSALEABLE if we really are in a Depression as promoted by bear cartel and in the useable areas sales and purchases will happen at decent prices the worst being 60% of peak value but the effort to sell and waiting time will be high. Also buying a good property will be a difficulty as I explained in another thread. Today there are lots of WORTHLESS properties with Zero Meaningful documents being sold in the city zone!

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                • #18

                  #18

                  Re : Is Real Estate the best place to park black money?

                  Originally posted by Natarajg007 View Post
                  So Dear Pitchakaran thinks that a said price is high because he cant afford it. Let us assume a ground of land is as low as Rs 10lakhs, to please our Pitchakaran. Now if someone has 100 grounds to sell then it again will be worth 10crores. Now on the converse suppose a ground costs 10 crores, then it means that one should be able to reuse it to sell 100 blocks for 10 lakhs or 10 blocks for 1crore each or 2 blocks for 5crores each.
                  In other words affordability is a person's ability and worth is determined by the demand and supply not by some pitchakaran's needs.
                  BTW keeping land is an extremely useful investment. Since its appreciation is higher than any rental value as also the fact that you pay no tax until to sell it.
                  This is like telling whether one should invest money in a MIS (monthly income scheme) or a FD (Fixed deposit). PItchakarans need MIS since they will die without it. Others choose FD.
                  I hope Mr Pitchai has got the answer!
                  Hi Useless, Certain SaligramPimps like you can afford/quote 2C 3C and 10 C for useless plots as you can earn lakhs in a day/night with your notorious family business in Saligram. But you lunatics cant change the falling RE .

                  Affordability is a person's ability and worth is determined by the demand and supply . (Ur stmt) ... Am sure many would visit your Saligram house for a day/night having a specific demand and sure you have a supply. Surely they will have a homely treat(real worth).

                  Its very difficult to make you write in a human way.

                  First of all, try to write in a legible way .

                  Its the final warning for you scoundrel . Be polite .
                  Last edited March 20 2009, 11:10 PM.

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                  • #19

                    #19

                    Re : Is Real Estate the best place to park black money?

                    Dear friends,

                    The subject drifts away from what was started intitially. Let us come back to the specific subject pl.

                    ks2071746

                    Comment

                    • #20

                      #20

                      Re : Is Real Estate the best place to park black money?

                      Dear friend,

                      Those having black money know that they can better park the same in RE. One who does not have the BM cannot prove it.

                      ks2071746

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