Category: Home Loan Tips

PE investment to cross $4 billion (30% up) mark in Indian realty

It seems like Indian realty market is the next big investment pocket of Private Equity companies. PE inflows into real estate sector may set to hold a new record this year with cross $4 billion during the end of 2017, claims a report. Startlingly, a greater part of this investment belongs to commercial assets such as- pre-leased office spaces and retail assets. The prime focus of PE investors has taken a sharp shift from high-end residential segment to the commercial ones, as they find low-risk involvement and definite return from this very sector. The latest market report says that adding over 80% of the PE capital by far this year is from long-term independent and pension funds.

PE investment share into residential sector declined by 50% in 2011 to 28% in 2016 and further has dropped by a little 4% in 2017. Against this scenario, Investment in commercial property sector accounted for 29% in 2011, which augmented to 66% in 2017, while that of retail jumped to 19% in 2016 from almost zero in 2011 and till this September it stood at 14% this year.

Another investment sub-category in commercial property investment i.e. warehouse investment has recorded double investment from 9% in 2011 to 16% in 2016. Private Equity investment will surpass the record of 2015, which was the highest since 2010. Real estate sector failed to grab notice during the 2011-2014 time period, while as of now this year is turning out to be the golden period of PE investment into realty sector.
From an average investment of $2.1 billion in 2011-2014, PE inflow rose by 57% to an average of 3.3 billion in between 2015 and mid- September 2017. In 2017 till now, the number of deals declined to 13, just over one-fourth of the mark in 2010. On the other hand, the average investment per deal improved 10-folds to $246 million per deal, appreciation to a major deal alone accounted for $1.8 billion.

Most of these PE investors are domestic investors followed by investors from the US and Canada recorded by far this year, Singapore had the highest investment per deal on account of a single giant investment GIC-DLF deal of $1,800 million this year.

Going by the ranking in order to fetch most of the PE investments Gurgaon stands at No: 1 position with 56.4%, riding on the back of $1.8 billion DLF-GIC deal, Mumbai holds the second position with 39.8% record. Last month, DLF’s promoters revealed sale of 40 percent stake in a rental arm DLF Cyber City Developers Ltd (DCCDL) for Rs 11,900 crore, which incorporated sale of shares to Singapore’s sovereign wealth fund GIC for Rs 8,900 crore. Institutional funds control the private equity inflow, which reflects long-term resumption in country’s active economic fundamentals.

LNN (Liyans News Network) – Buy luxury residential property in north Kolkata for greater return perspective. Explore available wide range projects on www.liyans.com. No: 1 real estate portal of Kolkata.

Worried About Fake GST Bill? Here’s How To Verify It

July 1, 2017 India got the crucial tax reform till date- ‘GST’. Till date what we know about this new regime is this is an additional payable amount which we suppose to count with the shopping bills. Goods and Service Tax is a single playable tax which dismisses 11 indirect individual taxes including VAT. The current market is not so aware of the entire GST pragmatism; the trap is already set to string along your purchase just by showing a dupe GST bill.
In real estate business, on-hand projects catch 12% and ongoing project investment 18% GST taxation. Under the GST goods and service providers will get benefit of input tax credit for the purchased raw materials used for the project development. Stamp duty and property tax will be subsumed. GST council composed of the state ministers and headed by Union Finance Minister Arun Jaitley has announced to introduce and give effect to National Anti-Profiteering Authority, set up under GST law.

Buying home is one of the major decisions of lifetime, forget the real estate for the time being, when you are purchasing something from the malls, do you really crosscheck the billing amount or are you sure the GST rate is collected from you is the right one? The fact that we all should know is that businesses that have not registered their business under GST, are not eligible to collect the GST tax. The reason behind such activity might be for their less turn over or escaping from this new tax regime. But who knows these businessmen are generating GST bill and smoothly collecting money from the end-users against their purchase.

How to verify GST bill and GST number?
One can verify any fake GST bill or GST number easily. Let’s look at the basics about GST number or GSTIN. In a bill you usually find a term called ‘TIN’ which confirms the ‘Tax Identification Number’. This ‘TIN’ is now ‘GSTIN’ carrying 15 digit number after GST implementation. It’s just the replacement of TIN of the VAT era. GSTIN is a 15 digit unique code for individual taxpayer, which will be both state wise and central-based. The first couple of digits of the GSTIN represent the state code according to Indian Census 2011. After that the ten alpha-numerical code is the PAN card number of the manufacturer/dealer/trader or the exporter. Coming to the 13th digit of GSTIN it indicates registration as a business entity within a state against the same PAN number. The 14th slot will be by default as Z.The last digit is a check code which will be used for recognition of errors.
For crosschecking GST rates on the commodity you purchased visit-

https://cbec-gst.gov.in/gst-goods-services-rates.html.

To verify the genuineness of GSTIN visit-

https://services.gst.gov.in/services/searchtp

To complain against any fraudulence transaction mail at
helpdesk@gst.gov.in

Or call- 0120-4888999, 011-23370115

_ LNN (Liyans News Network) – To Sell/Rent your property in Kolkata we offer free property listing service. Upload your property images and fill up a simple form under post your property in Kolkata category.

What Happens If You Check In Your Dream Home Without Occupancy Certificate?

The current market demand trend is heavier on the side of occupancy certificate ready apartments. In the whirl of timely deliverance, developers are scheduling the possession without property possession certificate/occupancy certificate. Property investment is centred on the sentiments of a homebuyer. Buying a new home definitely adds some moments of pride and self esteem in the buyers; but this is another ploy of the developers to wreak your emotions. Without occupancy certificate handing over a property actually can be could hallmark your entire real estate purchase illegal. In case any buyer accept any property with a pending occupancy certificate that person endangers own investment.

Importance of Occupancy Certificate
Occupancy Certificate should be always issued by the local civic body or the government-run agencies and planning authorities. It’s given after an entire real estate project completion in the very locale. An OC ready property is the parameter of a legitimate construction. It means the building has been developed complying with all construction rules and laws which includes approved floor area, project planning, fire safety standard, building standard and environmental criterion. As per the industry standards, if a building is developed adhere to all these measurements, then the developer gets occupancy certificate from the local governmental authority within a month maximum.

It’s largely observed that a first time homebuyer is unaware of the importance of the OC. It’s not just another piece of paper. Building without OC means you are not allowed to access better civic facilities; it could even stack up your tax burden. This document is necessary for applying your Khata or for buying resale real estate units. Resale properties won’t return profit without a valid OC.

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Barin Midya, a potential homebuyer in Kolkata asked us on our forum, “I have been looking for affordable flats in Kolkata, over past couple of years. Finally got an apartment in ready-to-move in condition, where as the developer is keep on delaying for handing over the occupancy certificate. Should I buy the property?”

Let’s brief you the real reason behind the delay from your developer–

The project plan might not approved by the local civic body.
Your chosen apartment might not have sanction or commencement certificate as well
If it’s not giving you full-length amenities that means it’s not even ready for obtaining a completion certificate.
It might not have received NOCs from pollution boards and airport authorities etc.
Builder should have all prior tax receipts to obtain OC.

In prime metros in India it’s mandatory for a builder to obtain the OC before handing over the possession to the buyers. In certain cases partial OC might also be considered. Without OC access to electrical connection, water supply and sanitary connection gets difficult. Leaving these minor issues aside if any civic body asks an inhabitant to leave the apartment, that hasn’t obtained OC, occupants have no other options than to empty the apartment. Thus, it’s really important to seek OC before taking the possession.

–LNN (Liyans News Network)

RBI Cuts Rate To Boost Affordable Housing To Boost Affordable Housing

Even RBI has come to the line to promote PMAY flagship project ‘Home for all by 2022’. Real estate experts consider that the apex bank of Indian economy has cut the repo rate at the onset of the Indian festive season just to boost the demand for affordable housing sector. A good monsoon in progress, low inflation numbers, favourable global environment and overall uptick in industry sentiments- bank has pointed out these facts as the catalyst of the recent rate cut.

RBI slashed the repo rate by 25 basis points to 6% at its third bimonthly policy check. The revised repo rate will go well with the two major policy reforms by the government ‘RERA’ and ‘GST’ which will eventually be favourable for the both buyer and the developer, during the investment in affordable housing. A rightly measured rate cut is the appropriate mediator to push the realty business. Affordable housing sector is not beyond that. By far the Central Bank has reduced their short-term lending rate 175 bps since 2014. With this revised rate cut the sluggishness of Indian real estate market will be recovered to a great extent.

Affordable housing in fact fed the real estate during the post demonetization season; while the entire market had fallen flat. The sector has been kept out of GST purview. The rate cut couldn’t have come more right time than this, when the affordable housing sector is expecting to be soared. Banks even relaxed the home loan percentage on purchasing affordable flats. Luring with the input tax credit by the government, market is expecting some major cash inflow from the domestic and overseas investment sector. The repo rate is beneficial at this moment as the current inflation rate is hanging at low levels less than 2%. Real estate sector has been on the way to be recovered by the means of low construction rate, supervision of RERA, lower price of ready to move apartments post GST and now with revised repo rate by RBI.

Real estate industry is hoping some positive come back as RERA is set to bring the accountability and visibility of the real estate business. RERA won’t allow any fraudulence in realty business. This move will surely able to bring back an investment boost along with the primal sentiment of home-buying. There is a temporary market slowdown observed after RERA enforcement. New project launches have been significantly shortened. This revised repo rate is a 7 year low. Nevertheless, the rate cut announcement sends out positive signals to the foreign investors and PE firms. With various progressive measures government will set affordable housing sector the big ticket of future investment. Indian real estate market is stepping towards progress with the deployment of RERA and GST rollout. Moreover rate cut comes as amen to Indian realty growth.

_LNN (Liyans News Network)- Visit www.liyans.com- the leading property portal in Kolkata to keep yourself updated with the latest news on Indian real estate and track every move of the market from the inception.

GST Is Not That Simple At It Was Labelled

It seems that Good & Services Tax (GST) has whipped out enraged mass. GST goes beyond protracted rhetoric. GST was said likely to combine multiple taxability into a single one. Those multiple taxability includes- central taxes such as service tax and excise duties, and state taxes, such as octroi, entry tax, VAT and so on. GST will dematerialize 17-18 individual tax paying into a specific one. GST is the biggest tax reform till present date and came after 15 years of deliberation.
The entire commodity market looks spaced out with GST roll out. Shop-keepers are unsure regarding the flash price of the pre-GST stocks. The old MRP includes VAT which can’t be sold on new GST rates. Fresh lots are likely to have revised MRP from the manufacturers’ end, which will increase commodity prices considerably. It’s being said that after demonetization GST hits the market in a foul way.

Citing the example of real estate, GST will lead to a reduction in property price and gold. Ready-to-move properties won’t attract GST. Under construction properties will be under 12% tax slab and maintenance cost of the co-operative housing society will witness 18% tax net. People, willing to buy flats in Kolkata and other metro cities in India will be on the profit-making side while investing in ready-to-move apartments or budget apartments in the major locations. A realtor can claim input credit as many as 167items and reduce the cost of the construction. Post GST property prices will decrease by Rs 400-500 per sq ft.

Naturally, homebuyers will consider ready-to-move in properties are the profitable choice of investment, as these are kept out of GST purview. Simultaneously developers will utilize this market sentiment to get rid of their on-hand inventories. But for medium-priced and premium class luxury projects GST will have a diverse impact. Nevertheless, government has approved deduction of land value equivalent to one-third of the total amount charged by a developer. According to the market experts for GST property price will be marginally slashed and tax liabilities for owning property to the end-users will be just about the same.

–LNN (Liyans News Network)