Indian real estate | Kolkata Real Estate | Kolkata Property

10% Lower Stamp Duty On Residential Property Registration

Big news for property buyers! Stamp duty paid during property registration will come down at least by 10%. A circular was issued by the Maharastra government’s Inspector General of Registration and Controller of Stamps on Jan 2, 2018. The circulation states: “The built-up area will be calculated now as carpet area multiplied by 1.1, the previous ratio was 1.2. Also, stamp duty for open balconies adjacent to the flat shall be charged only 40% of the total sale price.” This circulation was signed by Anil Kavade, Inspector General of Registration & Controller of Stamps, Maharashtra.

As per the market experts, the reduced stamp duty will bring down the tax burden on the homebuyers. The circular reads, “The rate mentioned in annual valuation rate is of built-up area.”

If the documents bring up the carpet area, then the valuation must be made by the drawing of the built-up area i.e. – 1.1xcarpet area or carpet area = built-up area / 1.1”. It also explains, “If open balcony adjacent to the flats/offices/shops/industrial use is shown in documents and plans with it, then its valuation should be made at the rate of 40 % of the sale price.”

The enforcement of the Real Estate (Regulation and Development) Act 2016 has brought significant change is carpet area calculation. The new carpet area under RERA is as follows-The area covered by external walls and areas under services shafts, exclusive balcony or veranda area and exclusive open terrace area shall not be included in the carpet area calculation. This has brought a significant change in property valuation as well.

Explaining the new stamp duty circulation, Advocate Vinod Sampat said, “It is good news for home buyers as the overall stamp duty will come down in the new calculation. The percentage-wise change will be up to 10-15 % as the calculation earlier was based on 1.2 multiplied by carpet area; now it has come down to 1.1. Also, the balcony that is open won’t be charged completely only 40 % will be levied on it, this will also bring the total valuation of the property down. This means the prices will automatically come down be while calculating the stamp duty.”

“Stamp duty charges vary from the state-to-state basis. Lowering the stamp duty is a welcome move by the state government of Maharashtra to encourage residential absorption volume under RERA compliance. Also, the new carpet area calculation under RERA will cater the homebuyers the actual possession area which they are putting their hard-earned money on,”-said Mr. Mahesh Somani, Chairman- National RERA Committee, Head- East Zone, National Association of Realtors India (NAR).

–LNN (Liyans News Network)– Buy home within your budget that also fills your lifestyle requirements. Invest in low budget flats in Kolkata and secure the maximum return on investment. Available 2/3bhk budget flats across north and south Kolkata regions. Buy/Sell/Rent properties online.

Indian Real Estate Sector is On Its Recovery Path

Starting from the end of 2016 to the entire 2017 Indian real estate industry had witnessed some significant policy changes and reforms. These have changed the face of the industry and will set to benefit the industry in long-run with global-scale performance. With the transparent transaction process and better accountability, the sector is expected to increase investment opportunity riding on better consumer confidence and strict transactional security.

The reforms began with an abrupt demonetization announcement of the PM. As soon as the announcement was aired, all the higher currency notes (500 and 1000) have been wiped out of the market. Among the other major sectors, real estate was the worst affected sector as a large number of real estate transactions used to get performed in cash. This is one major reason why the sector had been largely criticized as the haven space of black money parking.

Then the elephant arrived in the room, the Real Estate (Regulation and Development) Act 2016 (RERA). This is supposed to be the biggest reformation Act, exclusively formed for controlling the real estate business process. The Act came into effect from May 1, 2017. Being a consumer-centric Act, RERA promises to minimize project delivery delays, abrogate fly-by-night developers and agents and provide home buyers with the detailed information about the project features and progress of the projects they have invested in.

RERA was followed by the introduction of the goods and services tax (GST) which a unified tax that subsumed all the 12 existing indirect taxes into one. Until then, both the developers and the consumers had to pay multiple and often varying taxes which caused confusion. GST brings clarity to the transactional process. With input tax credit benefit to the developers, it has reduced the cost of construction as well.

The sector will also benefit from the amendment of the Benami Transactions Prohibition Act. It aims to prohibit the black money circulation in real estate. Along with which the central government is aiming to make Aadhaar linkage compulsory for all property transactions for keeping the sector free from the unaccounted inflow.

The affordable housing scheme of PMAY also looks promising. Named as “Housing for All by 2022” a successful execution of this programme is projected to contribute $1.3 trillion to the Indian economy in the coming time. The affordable housing program is till date the biggest government incentivized housing sector and it will generate a large volume of employment along with the construction progress. All these new policies, if implemented well then will return the biggest ever revolution in the sector.

“One of the most important features of this revived realty market is top-of-the-line investment security for the homebuyers which will boost the market sentiment and inflow respectively. Real estate industry will be reaping benefits of the reform-driven environment and several positive institutional drives. It’s expected that the improved investment flow will return healthy gains to the stakeholders as well,”- said Mr. Mahesh Somani, National RERA Committee, Head- East Zone, National Association of Realtors India (NAR).

–LNN (Liyans News Network) – Complete GST waiver on selected luxury apartments. Invest in on-hand luxury residential property in north Kolkata. Explore all the on-hand and upcoming projects in north Kolkata. Explore available 2/3/4bhk hi-end apartments in multiple locations.

Realtors are warned over GST contrivance

Construction companies and realtors could be punished by the Goods and Sales Tax (GST) authorities if they don’t disseminate input tax credit to the end-users by cutting off the property price. Now property buyers, especially buyers of the apartments won’t have to bear any additional hidden price in name of tax payments.

Reportedly, the Central Board of Excise and Customs at Delhi and its offices in other states have received several complaints from homebuyers who have booked apartments or made part payments after July 01, 2017. According to the filed complaints, these people were asked to pay a higher tax for instalments paid after the afore-mentioned date.

Explaining which GST commissioner, Vizag, N Srujan Kumar said, “This is against the GST law. Action will be initiated under profiteering section 171 of the Good and Services Tax Act against developers who collect higher tax on instalments of flats under construction. Therefore, the developers are advised to pass on the benefits of input tax credit to the buyers by reducing the price of the flat.”

The profiteering sector of the unified tax regime says, the registration of the errant developers can be cancelled and the developers are also asked to refund extra money collected from the home buyers in name of tax collection. The Act also necessitates the authorities to pass order asking developers to cut down property price and pass on the tax credits to the buyers in the future. Realtors pass on the tax benefit to the end-users, while they are refilling this breach with oversized installment money taken from the home buyers.

As per the GST commissioner GST levied on the construction of flats, buildings and complexes are somehow undersized than some central and state indirect taxes payable by the developer under the pre-GST regime which includes- central excise duty, VAT, entry tax and taxes on construction materials which initially were paid by the developers and they ended up passing those on to the home buyers. As under GST the full input credit is available for the developers, they shouldn’t pass on the taxes on construction materials to the customers; rather they should pass on the tax benefits by lowering the property price or installments.

The complaints being received by the GST offices across the country narrates some other story where developers are continuing to pass on the 2.5% input tax to the buyers. Again, they are charging higher tax or instalments from the buyers in several states. On their defence, developers are saying passing on the tax benefit to the buyers and ascending price of raw materials of the construction are two different subjects to be considered and somewhere the government is mixing up these two. While transferring 12% GST to the government, the input tax credit benefit ranging from 4.5-5% is too being passed on to the buyers. Developers affirmed that they have to wait until the end of this financial year for input tax credit calculation purpose and only then they can reach any conclusive decision on the same. The constant problem which has been bothersome to the developers is increased price of construction raw materials such as- cement and steel.

However, it’s worthwhile mentioning that apartments that are ready for possession along with occupancy certificates are exempted from GST ambit. Consumers are asked to pay 12% of GST for apartments without occupancy certificates.

-LNN (Liyans News Network)- Invest in on-hand low budget flats in Kolkata to avail maximum GST benefit. Explore 2/3bhk flats ranging in 28-40 lac spread over prime areas in Kolkata. Buy/Sell/Rent properties across 100+ cities in India.

Made Easy GST Laws Relative to Residential Construction and Input Credits

Is there one thing that is taking you back from property investment? Are you taken back by additional GST burden on your chosen apartment? Here are some confluent factors that one should know before putting money on residential properties these days.

Sale of an apartment is a supply of service or a sale of immovable property under GST regime– With a set budget, just when you were ready for buying a property, GST implementation dropped adding to your budget. If you think the same, please check some important facts about the central government introduced unified tax reform. According to the clause 5(b) of the Schedule II of CGST Act, 2017, construction of a house/apartment/flat intended for sale is a supply of service.

Anyhow, the clause 5 of Schedule-III of CGST Act, 2017 says that if the entire absorption for the apartment/house is obtained after the receipt of completion/Occupancy certificate (OC) from the competent authority or followed by its first occupation, whichever earlier, then such action would be neither considered as supply of goods nor a supply of service. However, a transaction related to sale of such immovable property after initial occupation or after receiving receipt of OC won’t draw GST.

Taxation on Land property- You need not arrange extra money for land purchase as the sale of “Land” is neither ‘Goods’ nor ‘Service’, thereby is exempted from GST, as provided under Clause 5 of schedule III of the CGST Act, 2017.

GST rate on supply of services related to construction of residential apartments– According to Sl. No. 3(i) of Notification No. 11/2017-CT (Rate) dated 28.06.2017 construction of residential complex is under GST @18% slab [CGST @ 9% and SGST @ 9%] which includes- construction of complex, civil structure or a part thereof, building, apartment wholly, partly intended for sale to a buyer, excluding where the entire consideration has been received following insurance or completion certificate by the capable authority or its first occupation, whichever prior.

The supply of residential properties (flat/house/complex) also entails transfer of ‘land/exclusive share of land’ which is not taxable under GST; in that case, the value of the land will be accounted as 1/3^rd of the total amount charged for such supply, says the Para 2 of the said Nfn. No: 11/2017-CT (R) dated: 28.06.2017.

So, GST on a flat/house shall be 2/3^rd of the total consideration cost which is 12% of the total consideration including land /undivided share of land.

Input tax credit on goods/inputs (sand, cement, steel items etc.) and input services (Designing, planning, construction etc.)- The builders/developers are eligible to avail credit on goods and input services used in the course of development. The Section 16 along with Section 17(5) of the CGST Act, 2017 narrates that Builders/Developers are entitled to avail ITC of the GST paid on goods, inputs like: Sand, Cement, Steel, Gravel, Electrical cables, switches etc.; and Capital Equipments like: Mixer, Crane etc.; and input-services as: Manpower Supply Service etc.; Architectural services like Drawing, Designing etc.

Sub-contracted construction services (including or excluding materials) can also avail ITC as the provision don’t fall under clauses (c) and (d) of Section 17(5) of CGST Act, 2017. Thus, these people belong to the independent taxpaying category.

Input Tax Credit facility on Tripper, JCBs and Dumpers and other delivering transpiration– Sec. 17(5) (a) (ii) of the CGST Act, 2017 says that ITC is available on Tippers and Dumpers which are categorized as Motor Vehicles (under Clause (28) of Section 2 of the Motor Vehicle Act, 1988 read with Section 2(76) of the CGST Act, 2017).

GST levied on interstate stock transfer of input and capital equipment by the same builder– Supply of construction materials by the same builder from one to another site won’t attract GST, if the registration number of the construction activity is same. This kind of transfer can be made under a delivery challan. Again, with the same registration number if a builder/developer opens another business in any other state and is required to transfer capital equipment or inputs, is not liable to pay GST.

In terms of the Section 25(4) of the CGST Act, 2017, builder/developer with more than one registration number whether in a state or UTs or different states and UTs are liable to pay GST, as different registration numbers will be considered as two different entities for the purposes of GST and according to the clause 2 of Schedule-I to the CGST Act, 2017 this kind of supply invariably falls under taxable supply. GST paid on such supplies can be proceeded as Input tax credit by the recipient. The estimation of such supplies of will be as per provisions of Sections 15 and 18(6) of CGST Act, 2017 read with Rule 28 of CGST Rules, 2017.

In case builder avails ITC services on construction of flats out of which some are sold on payment of GST and rest sold without payment of GST– the provisions of Section 17(2) of the CGST Act, 2017 highlights that where the goods and services or the both used by registered person partly for the production of taxable supplies and partly for effecting tax excused supplies, then the amount credit will be reduced to so much of the input tax as it inferable as taxable supplies. Additionally, the sale of flats after issuance of completion certificate without GST payment as per the clause 5 of schedule-III to CGST Act are exempt supplies for the principle of Section 17(2) ibid as specified vide Section 17(3) mentioned earlier, read with clause (b) of paragraph 5 of Schedule II and clause 5 of schedule III to the CGST Act, 2017.

Under these circumstances the process of credit of entitled ITC has been described under the provisions of Rules 42 (for inputs and input services) and Rule 43 (for capital goods) of the CGST Rules, 2017. Anyhow, refund of un-used input credit is not allowed As per Notification No. 15/2017-CT (Rate) dated 28.06.2017 issued under the provisions of Section 54(3) of the CGST Act, 2017.

_LNN (Liyans News Network)- Explore luxury residential property sale in Kolkata. Invest in on-hand projects exempted from GST. Avail the GST benefit, up to 8% off on selected luxury residential projects.

Don’t Forget To Ask These Questions to Your Future Tenant

Selling/Renting properties online is easy-that we all know, but classifying genuine tenant from hundred random visitors is not as easy as it seems to be. When a prospective tenant visits your property chalk out a set of valid questions that you should ask to the person to find whether that person is a good fit or not for your property.

When you are ready to rent out your property to an unknown person, it’s really crucial to ensure that the future usage of your property is in the safe hands. Following questions can help save you the time and stress involved.

What is the reason you want change your present rented apartment?
Before anything else ask the reason behind shifting to a new property. Get more information about the valid reasons for moving. During interaction try to find out if there is any incidence of eviction from the current possession. Not always you will get honest answers from your prospective tenants, still you shouldn’t refrain from asking queries.

Ask about tentative moving-in date
Always check whether the tenant is in hurry to move in which may not be a good sign. Most landlords require prior notice of 30 days to do away with a lease. In case the tenant wants to move-in within a week, he may be contravening the contract with the existing landlord. A responsible tenant will start his search precendently of the shifting date.

The total number of occupants in the property (including pets)
Take information on the total number of occupants moving to the property. Your lease agreement should contain all the names of the occupants in it.
Monthly earning of your tenant
Though it’s not an easy question to ask, but it is also very important to have an idea about the earning of the tenant, so that you get your rents on time or really the person can afford the apartment or not. Ideally you should never rent your apartment to a person whose monthly income is less than 2.5 times of the monthly rent.
• To know about the financial position of your tenant ask-
• How long have you been into this profession? (Whatever his/her current profession is)
• What is your job role?
• Are you under any contractual job?
• What are your daily working hours? / Is there any rotational shifting?

What is the length of lease you are looking for?

Mostly lease duration is of 6 to 11 months for residential apartments. Ask your tenant about his/her preference. Ask him to pay one month’s advance rent and security deposit for your better security purpose while signing on the lease. In case the person looks hesitant while paying this advance amount, then you are likely to have a tough time having your monthly rents.

Things to remember

Avoid asking personal questions. Discrimination on the basis of age/sex/caste should be avoided.
Let the tenant also clarify his/her doubts regarding the lease contract.
Always ask for government id proof, bank acc details, office identification before heading towards any agreement.

–LNN (Liyans News Network)– Want to rent/sell property instantly? Upload property details under post your property in Kolkata category of our online real estate portal. We offer free real estate classified posting. Get the best closing price.