DDA approves proposed Master Plan amendment

The DDA today approved the proposed amendment to the Master Plan 2021 for Delhi, which includes bringing an uniform floor-area ratio (FAR) for shop-cum-residence plots and complexes at par with residential plots. 

The decision was taken during a meeting of the urban body, held under the chairmanship of Lt Governor Anil Baijal at the Raj Niwas here. The proposed move aims to bring relief to the traders from a sealing drive, which was initiated late December from the Defence Colony market in south Delhi, at the instance of a Supreme Court-appointed monitoring committee. 

"After hearing the submissions of all the stakeholders and to strike a balance following concerns raised by several RWAs and traders, the Board of Enquiry and Hearing made certain recommendations which were placed before the Authority for its consideration," a senior DDA official said. 

After the approval by the top decision-making body of the Delhi Development Authority (DDA), it shall be sent to the Urban Affairs ministry for approval. Uniform FAR (gross floor area) on shop-cum-residence plot/complex of pre-1962 and post-1962 shall be permitted, according to the proposed amendment. The FAR is the ratio of a building's total floor area to the size of the piece of land on which it is built. 

This means the FAR for 100 sqm was earlier variable, ranging from 180 to 225, but now it is recommended to be a uniform 350 for 100 sqm. There will also be uniform norms for utilisation of basement in all the shop-cum residential plots or complexes. The Confederation of All India Traders (CAIT) welcomed the approval by the DDA to the Master Plan, and termed it as a "one positive step" by the central government towards resolving the sealing issue in Delhi. 

The recommendations of the DDA's Technical Committee were approved by the authority in its meeting held February 2. As per legal provision, the proposed amendments in MPD 2021 were then put up in public domain for inviting suggestions or objections from February 3-7. 

As many as 741 objections/suggestions were received and approximately 210 representatives also made oral submissions before the Board of Enquiry and Hearing. Regulatory measures have also been introduced to mitigate pollution, uncontrolled growth of commercialisation of the residential areas, such as restricting the entry or exit of the plot, control on placing of any outdoor AC units or exhaust units along the public lanes or residential streets, according to the DDA. 

The matter regarding notification of 351 roads in the city for commercial or mixed-use under the MPD 2021 is being "expedited" by the Urban Development Department of the Delhi government in coordination with the local bodies, it said.


Source: Magicbricks

India's real estate market will set the tone for 2018 with landmark reforms like RERA and GST in place

Last year, India’s real estate sector saw two major reforms come into force -- the Real Estate Regulatory Authority (RERA) and the Goods and Services Tax (GST). While a landmark tax such as the GST is expected to have far-reaching implications for sectors across the economy, its impact on real estate as a whole is likely to be a mixed bag. The complete impact on construction costs is likely to unfold over the coming months. However, aligning with the ‘Housing for All by 2022’ vision, projects launched under the Pradhan Mantri Awas Yojna (PMAY) have been kept out of the purview of the GST.

For under construction properties, the government has allowed one-third of an apartment cost to be deducted towards the transfer of land and GST at the rate of 18 percent to be paid on the balance amount, which brings the effective GST rate on under-construction properties to 12 percent. While occupation costs are likely to inch up marginally as the 15 percent service tax has been replaced with an 18 percent GST; completed properties as well as rented apartments have been kept out of the purview of the GST.Although one may argue that GST works best in an organized economy, where the supply chain is streamlined and value additions at each step are clear, implementation of GST could be the first step towards India’s economy becoming more organised.

Undoubtedly, there will be short-term disruptions, but in the long term, it is likely that the benefits of efficient supply chains and lower compliance costs will eventually trickle down to make the reform the “shot in the arm” for businesses in India.

GST will help logistics players achieve supply chain efficiencies, resulting in consolidation in the warehouse segment and entry of national-level/credible players. While the marginal increase in cement prices might be passed to end-users, RE players will also benefit from the ITC on raw materials used for construction. Overall, GST will reduce compliance costs and improve the ease of doing business in India.

The other big reform – RERA, came into force on 1 May, 2017. RERA was passed to ensure accountability, infuse transparency and bring uniformity in real estate practices. RERA has been implemented in 18 states and all union territories; 10 states have yet to notify RERA rules. Among the states that have implemented RERA, only 11 have an active online portal.

They include Maharashtra, Karnataka, Tamil Nadu, Uttar Pradesh, Gujarat and Kerala; amongst others. The act is expected to boost transparency in the sector, address consumer grievances and help in rejuvenating residential demand.

Real Estate in 2020: Trends that will define realty by 2020

Office

With innovative technologies such as artificial intelligence, big data, data science, etc. being adopted by corporates, mundane/back-end and regular business processes are becoming increasingly automated. Additionally, data analytics is now emerging as a key factor in determining how technology can be leveraged to improve business operations. However, employee movement caused in the short-term due to the usage of these technologies is expected to be covered up by the creation of new jobs, which will arise as a result of these evolving technologies.

Another trend that is likely to become more dominant is the usage of innovative workplace strategies, as there is an inclination of occupiers to shift from exclusively focusing on cost management and space efficiency to also looking at talent retention. This would result in wider adaptation of workplace strategies that align company goals with real estate needs by choosing workplace location and design to attract and retain talent.

It is expected that occupiers will be more “agile” and would focus on ‘future proofing their portfolios’ – taking real estate decisions while balancing both short and long term corporate needs. Improved transparency in operations is likely to be a by-product of the various legislations (RERA, GST, REIT regulations, eased FDI in construction) that have come into force recently, with the complete impact of these legislations on business operations likely to unfold in the coming years.

Housing

2016 and 2017 have been high not only on legislative measures, but have also brought into limelight an important, yet neglected segment - “Affordable Housing”. Numerous measures to promote private sector participation have been taken in the past year -- such as awarding infrastructure status to affordable housing, 100 percent deduction on profits for affordable housing projects, increasing the livable area of the units and relaxed completion timelines, amongst others.

However, despite these measures, the segment needs a stronger thrust, in order to be completely viable for private participation. Availability of land, relaxation in development norms, faster approvals for affordable housing projects, better alignment between central and state policies are some of the factors that need to be addressed to allow the segment to achieve its full potential.

As these gaps are plugged in, trends such as use of technology to rationalise construction costs, access to formal sources of capital, wider funding avenues, entry of credible developers are some key trends that will define the segment by 2020.

Retail

While the traditional gateway cities of Delhi NCR and Mumbai have been at the core of retail activity, lately cities such as Bangalore, Hyderabad, Chennai and Pune have also seen robust retailer interest. The southern cities, especially Bangalore and Chennai are likely to witness strong supply and both the cities together, are expected to have a share of 30 percent in the overall retail stock by 2020, compared to around 23 percent currently.

Irrespective of any key market trend seen in the near future, quality will continue to remain the overriding theme. Precedence of this can already be seen in developed retail markets such as the US, which are beginning to witness an impact by the growing popularity of online retail.

However, quality malls even in these markets are likely to survive, and outperform. Place-making will be at the core of these well-performing malls, as a mall is no longer seen as just a shopping destination, it involves eating out, entertainment, fitness centres – all businesses that face less risk from e-commerce than traditional tenants. With online retail becoming a larger reality, occupiers are devising strategies to weave in this medium of shopping into their existing business models.

Retailers are adopting the omni–channel strategy with services such as buy online and collect in store, customer returns and refunds for products bought online, and providing store kiosks for browsing and making payments. As convenience becomes an overriding theme, retailers are reversing the shopping trend. Instead of shoppers visiting stores for purchases, stores are being set up where consumers spend a lot of time. As a result, transit oriented developments, mixed use formats, larger retail components in office buildings are few formats that will witness more prominence by 2020.

Warehousing

With the entry of global players across segments and increasing awareness of domestic players, there is a need for better quality of warehousing spaces which align with global benchmarks. The government’s initiatives to streamline the logistics ecosystem has resulted in India being ranked 35, out of 160 countries on the 2016 World Bank’s Logistics Performance Index (up from 54 in 2014).

The implementation of GST will be the overarching theme for warehousing and logistics activity in the coming years, as the tax is likely to result in the emergence of a more consolidated market, where warehousing architecture would be dictated by efficiency.

With the government keen on giving manufacturing the long deserved thrust, it is likely that demand from the segment will pick up pace. Warehousing footprint will not only be dictated by domestic demand, but will also be governed by regional opportunities. As India gets ready to play a larger role in the global economy, these opportunities are expected to gather momentum, due to an increasing trade with Asian and global economies.

The sector is likely to witness the inflow of more institutional funding and formal sources of capital, along with the entry of national level/credible players. As national players with larger warehouses emerge, deployment of capital in these fewer, better quality assets is likely to become easier.

In 2018, policy reforms will usher in a new operational environment. Policy reforms have been at the core of the government’s agenda, as is evident from the numerous breakthrough reforms that have been approved and implemented in the past two years.

Two reforms that will specifically have a bearing on the real estate sector and its ancillary industries are the GST and RERA. It is anticipated that with the implementation of RERA and future REIT listings, there would be a paradigm shift in the mindset of the global investor.

The risk associated with Indian real estate is likely to reduce given that only leading, trustworthy developers with proven track records would be operating in the coming years. Over the coming years, Indian real estate is expected to become significantly more organised, which in turn would result in wider funding avenues.

Source- First Post

Sikka Group pledges support at UP investors summit 2018

Sikka group, a Realty major from Delhi/NCR has pledged its support to the government of Uttar Pradesh in the recently concluded UP Investors summit 2018. The Government of Uttar Pradesh organised Uttar Pradesh Investors Summit (UPIS) on 21st - 22nd February 2018 in Lucknow city. The two-day event aimed to showcase the investment opportunities and potential in the various sectors of Uttar Pradesh. 

UPIS 2018 offered a global platform, which brought together heads of states and governments, ministers, leaders from the corporate world, senior policy makers, heads of international institutions and academia from around the world to further the cause of economic development in the state and promote cooperation.  

Sikka Group, a major realty player with group housing projects in Uttar Pradesh and Uttarakhand signed the MOU with the UP government and pledged its support to the cause. The MOU was signed by Manoj Gupta, CEO, Sikka Group. Such steps by private developers will go a long way in developing realty & infrastructure in the state and would benefit millions. 

With the participation of private players the summit aimed at holistic development of the state and ensured quick clearances and approvals for its undertakings. Such summits instil faith not just amongst business houses but also amongst the normal public who can see a new hope with the government and private players joining hands for the overall growth in the state.

DDA to merge 1BHKs, make flats spacious

With its small one-bedroom flats failing to find any takers in two successive housing schemes, the Delhi Development Authority (DDA) is now planning to tweak the design of these flats to make them more spacious.

The land owning agency is toying with the idea of breaking the walls dividing two one-bedroom flats and merging them to form a two-bedroom flat, thereby making them more attractive to buyers. In its 2017 housing scheme, DDA had put on offer 12,617 flats, for which it had received more than 46,000 applications. However, within a month of allotment of these flats to successful applicants, more than 3,000 surrendered their flats.

The allottees were chosen in a draw of lot and most of those who were allotted one-bedroom flats in areas such as Narela, Siraspur, etc, chose to surrender them. The number of requests for surrender or cancellation of allotments of flats from applicants reached the figure of 5,661 very soon, as informed by the Union minister of housing and urban affairs Hardeep Singh Puri to Rajya Sabha in January this year.

The reason cited by applicants for surrendering the flats was primarily their small size, apart from the lack of basic amenities. Many of these flats were the ones that were surrendered in DDA’s 2014 housing scheme too. DDA had put the flats again on offer during the 2017 housing scheme.

After failing to elicit interest among allottees for one-bedroom flats in two consecutive housing schemes, DDA is now exploring options to make these flats more attractive and liveable by tweaking their design.

“We are exploring architectural and technical possibilities to make these flats better,” JP Agarwal, principal commissioner (land disposal and housing), DDA told TOI.

Agarwal said that officials from DDA’s architecture and engineering departments are working on changing the layout of these flats to make them more spacious, while confirming to building norms. “As the construction area of the flats will remain the same, we are also exploring the possibility of merging two LIG (lower income group) flats into one MIG (middle-income group) flat,” he added.

If the usual carpet area of an LIG or one-bedroom flat is 33 square metres, after merger two flats, DDA would be able to offer a 66 square metre two-bedroom flat, which would be more spacious and hopefully more attractive to buyers, said a DDA official.

Source- ET Realty

Housing ministry sanctions upto 5 lakh affordable houses every month: Puri

Admitting that India's urban infrastructure was under "extreme strain", Union Minister of State for Housing and Urban Affairs Hardeep Singh Puri has said the government was committed to bringing holistic transformation in the country's infrastructure development, including providing 12 million houses in urban areas by 2022.

Sanctioning at a rate of 3 lakh to 5 lakh affordable houses per month under the Pradhan Mantri Awas Yojana (PMAY), Puri said the government is committed to providing "12 million houses in urban areas by 2022 as part of its home-for-all campaign". He said this capacity building was imperative as the urban population was expected to rise from the present 30 percent to an estimated 50 percent by 2030.

"I was able to get cabinet approval for a new urban affordable housing fund and a provisioning of Rs 60,000 crore for the four-year period," the Minister said while delivering a special lecture on Thursday evening on '2022: The India We Seek', organised jointly by the Society for Policy Studies and India Habitat Centre.

The ministry has also come out with eight models to promote private sector participation in the affordable housing sector. Six of these are based on leveraging government land and two are based on private land ownership. The cost of land can be as high as 40 percent to 80 per cent of the house being provided. Both the central and state governments are also providing outright subsidies, and the typical cost of a home is about Rs 6.5 lakh. "PMAY is getting high traction. There can no more generous scheme for social transformation like this," he said.

Suggesting that the current government has a powerful, positive and growth-oriented agenda, he said: "In order to achieve the new India, the Indian state must be strengthened to deliver the goods and services required. You cannot deliver the goods and services if the state is enfeebled." He also laid emphasis on cooperative federalism for the effective execution of various flagship schemes aimed at planned urbanisation.

The Minister said that though India was one of the most successful examples of post-colonial reconstruction, it has several issues to address. "Millions of our people still suffer in poverty, we must still overcome deep-rooted social prejudices and satisfy the demand for shelter, food, clothing and opportunity for the rapidly growing population," he said.

The government plans to achieve 100 percent open defecation-free India and 100 per cent solid waste management in the country by the 150th birth anniversary of Mahatma Gandhi on Oct 2, 2019. Even Gandhi, in 1916, a year before his Champaran movement that heralded our freedom struggle, had called for a cleanliness campaign before striving for political freedom, said the minister. He stressed the need for a change in mindset among the people to achieve a "transformed India".

"Building toilets and meeting the physical targets is the easier part but it will also require behavioural change," he said and added that Prime Minister Narendra Modi has been successful in transforming the attitude towards toilets, which was a taboo till recently. "The PM has created a Jan Andolan (mass movement) where governments, corporates, civil society and public have all got on to the campaign," he said.

Even the Smart Cities campaign is not just about infrastructure but about bringing a change in the mindset, he said. "The India we seek is where the public consciousness itself has been transformed, where there is housing for all, dignified existence for every citizen and protection from exploitative practices," said Puri.

It will be a transformed India by 2022, Puri asserted.

"GST, demonetisation, the insolvency bill, infrastructure status to housing and RERA have helped clean, reform and revive the real estate sector and has made the valuation more realistic," he said.

HDFC Property Fund aims to raise $500 mn from overseas investors

HDFC Property Fund, the real estate investment arm of India’s largest mortgage lender, is planning to start raising $500 million from overseas investors, nearly two years after it was originally planned.

The fund wanted to first exit its earlier investments and return money to investors before raising more funds.

Separately, parent Housing Development Finance Corp. Ltd (HDFC) is firming up plans to invest in distressed real estate assets at a time when the sector is undergoing a prolonged slowdown.

HDFC Property Fund plans to invest in commercial office projects and residential developments in top property markets through equity and structured equity instruments from the new $500 million fund.

“The life of the fund is around 10 years and so it’s long-term, patient capital that we will invest,” said a company executive, who didn’t wish to be named.

This will be HDFC Property’s third offshore fund after it raised a $750 million fund in 2007-08 and a $350 million fund in 2014-15. The second fund has been almost fully deployed. The fund has committed to its investors to complete the exits from the first fund and return capital by 2018. Out of 14 investments it did from the first fund, it has exited 10 so far and the remaining four are expected to be concluded this year, he said.

HDFC Property recently exited a Rs420 crore investment in Kalpataru Group’s under-construction project in Thane with around Rs1,172 crore, the executive said.

HDFC vice-chairman and chief executive Keki Mistry said the decision to invest in distressed property assets is because real estate is an area of core competence for the company.

“We are seeing opportunities in the real estate sector. The investments could be in the form of a fund or even a corporate structure,” Mistry said. He declined to comment on the quantum of investments that will be made.

HDFC may invest around $500 million in distressed real estate assets, said a person familiar with the development, requesting anonymity.

On the real estate investment front, HDFC Capital Advisors Ltd also raised $550 million in December, in an initial closure of its second affordable housing fund.

The fund, which is currently in active deployment mode, had Abu Dhabi Investment Authority (ADIA) as one of its key investors.

In February, Prestige Estates Projects Ltd announced a partnership with HDFC Capital to create an affordable housing platform that will jointly invest Rs2,500 crore in low and mid-income residential projects.

IIFL Asset Management Ltd is also planning to raise its first offshore affordable housing fund of up to $500 million in the next financial year, Mint reported on 23 January.

While fund-raising for real estate projects hasn’t been easy, raising capital from offshore investors have always been tougher given that many vintage funds of 2005-06 didn’t generate adequate returns.

“The new regulatory and taxation regime, with RERA and GST, there is an increased level of transparency and a level playing field expected in real estate. Despite the slowdown in the sector, investors believe in the high demand for residential projects and see an opportunity to invest,” said Shobhit Agarwal, managing director and CEO of investment banking firm ANB Capital Advisors Pvt Ltd.

Cabinet approves creation of Rs 60,000 crore fund for PMAY-Urban

The Union Cabinet today approved creation of a fund of Rs 60,000 crore to finance the Pradhan Mantri Awas Yojana (Urban), a move Union minister Hardeep Singh Puri said would "add momentum to the pace of the implementation" of the government's flagship scheme.

The National Urban Housing Fund (NUHF) will have provisioning of funds to the tune of Rs 60,000 crore over the next four years, the housing and urban affairs minister told reporters here.

He said the fund will established in the 'Building Materials and Technology Promotion Council (BMTPC)', an autonomous body under the housing and urban affairs ministry.

Under the PMAY(U), the housing and urban affairs ministry targets construction of about 1.2 crore houses for the urban poor.

The ministry has sanctioned 39.4 lakh houses under the scheme so far, Puri said, adding that by March, the number is expected to go up to 45 lakh.

The minister also exuded confidence that the government would be able to provide houses to all the urban poor before the target of 2022.

"The Cabinet having approved the NUHF provisioning for funds amounting to Rs 60,000 crore over a period of 4 years, there will be an added momentum to the pace of implementation," he said.

On an average, the ministry approves central assistance to between 2-3 lakh houses every month, he said.

A committee will be constituted in the ministry to be chaired by the Joint Secretary/Mission Director PMAY (Urban) to operationalise and monitor the NUHF.

Cabinet to clear biggest financing plan for PMAY-Urban

The Cabinet is set to approve the biggest ever financing plan for the PM Awas Yojna (PMAY) on Tuesday to meet the fund requirement for building 1.2 crore affordable houses in urban areas. Sources said the Centre's share for building houses under this scheme in the next two financial years was estimated at around Rs 60,000 crore.

TOI has learnt that this amount will be raised from non-budgetary resources, meaning the housing ministry will borrow it from fund-raising entities such as HUDCO or tap the National Small Savings Fund(NSSF), which has deposits of about Rs 1.2 lakh crore.

Sources said the housing and urban affairs ministry requires about Rs 8,000-Rs 10,000 crore to meet the requirement of the current financial year.

The Budget proposal provides for raising Rs 25,000 crore from extra-budgetary support for 2018-19 and the similar amount will be required for 2019-20 to ensure there is no fund crunch.

Finance minister Arun Jaitley, in his Budget speech, had announced to establish Affordable Housing Fund, which will be anchored in the National Housing Bank (NHB) to raise Rs 25,000 crore from nonbudgetary resources. The urban component of PMAY is in 4,320 cities and towns. Housing minister Hardeep Singh Puri had recently said,

So far, the housing ministry has approved 39.25 lakh houses under the housing scheme.

Reforms accelerating affordable housing finance growth momentum

The affordable housing and finance sector has been witnessing growth over the last few quarters. With a number of reforms such as RERA and the exemption of GST on affordable housing, the sector is being looked at very closely with three specific trends driving this industry momentum forward.

Affordable housing

The affordable housing segment is clearly on an uptrend. Growth in supply has been estimated to be 15 per cent in terms of launches in the last three months, as compared with the previous quarter. It is imminent that developers will start to consider expanding their portfolio in affordable housing that addresses the needs of the lower or middle-income households.

Affordable housing scripted a growth of 27 per cent between January and September 2017 (y-o-y) compared with an overall residential housing contraction. This trend has been driven by the mission-mode implementation of PMAY; affordable housing’s new found infrastructure status; as well as much-improved inflow of formal credit (via NBFCs and banks) to the segment. By 2022, the government seeks to achieve housing for all citizens which is estimated to be a Rs 6-lakh-crore business opportunity. Additionally, several progressive and reform-led initiatives undertaken over 2017 have also played a transformational role for the housing industry — Real Estate Regulation Act (RERA) to enhance transparency and consumer trust, the goods and services tax (GST) to adopt a comprehensive taxation structure, Real Estate Investment Trusts (REITs) to boost investments and Sebi draft guidelines for real estate investments.

RERA: The impact

As India’s first real estate regulator, this act enforces that each state and Union territory forms its own regulator and frames rules that will govern the functioning of the regulator. Going forward, RERA will
create a more equitable and fair transaction between the seller and buyer by bringing in an organised approach, higher accountability and greater transparency, thus, benefiting all stakeholders.

Banks or NBFCs while enabling loans to individuals are looking for properties with a clean title, no legal hassles like multiple claimants, track record of the developer, any additional leverages on the property, etc. Having a RERA certification enhances the project’s eligibility for home loans but the eligibility criteria for an individual applying for home loans remains the same.

Goods and services tax

GST has subsumed central excise, service tax, VAT and other local levies which have helped create a uniform market, thereby contributing to overall GDP growth.

GST on Home Loans

As far as home loans are concerned, it is important to understand that there is no GST or service tax levied on the interest component of your home loan. Similarly, any stamp duty charged in connection with the documentation of the home loan, will also remain unchanged, as stamp duty is not subsumed under the GST regime.

On an overall basis, the future for affordable housing and the housing finance sector as a whole continues to be positively led by the housing potential that India needs. With ‘Housing for all by 2022’ leading the way, followed by RERA and GST on affordable housing, prospective home buyers can be assured that buying their dream home is now an achievable reality. At present, home loans interest rates are in the affordable range.

Led by the government’s commitment, banks and NBFCs continue to offer attractive deals. This, together with steady real estate prices is undoubtedly a good time for home seekers to apply for home loans and buy their dream home.

YEIDA to check all projects for building plan violations

The Yamuna Expressway Industrial Development Authority on Thursday said it would examine all sanctioned projects to check if any developer had violated the approved building plans, days after conducting a financial audit of 28 builders in its area. A committee headed by additional CEO Amarnath Upadhyay has been tasked with conducting the examination, which is supposed to be completed in a month.

The YEIDA will examine all ongoing projects with approved building maps in the city. “If any builder is found to have violated the building bylaws and approved plans on the ground, we will initiate action, including cancelling of sanctioned maps and even the land allotment,” said Arun Vir Singh, CEO, YEIDA.

According to officials, the move has been initiated in the interest of buyers who have been affected by long delays of projects.

“We have been receiving complaints from homebuyers that several builders have violated the layout plans and are not building according to the approved maps,” said Singh. “These complaints include allegations that builders have constructed in green areas, not left the required set back, or not kept the mandatory parking area as per the sanctioned building plans. Some builders have also allegedly constructed more units than the number sanctioned, besides constructing on additional Floor Area Ratio, thereby creating a problem for the residents. All allegations will be looked into,” he said.

“Our teams will go out and inspect each project to check for any building plan and layout deviation. If any violation comes to light, we will take the strictest action against the concerned developer,” the CEO said. “No one will be spared. If the final report from the committee shows violations, builders will be issued notices to explain and if we do not get satisfactory responses, we will cancel the approval of building plans. We will also not shy away from cancelling the land allotments,” he added.

Singh further said all the 28 projects of the builders in the YEIDA would also be scrutinised for violations. These 28 projects involve about 28,000 residential units, he said.

Source- ET Realty

Punjab sets up revenue commission for a relook at land acts

The Punjab government on Tuesday notified a six-member 'Revenue Commission' to bring in a greater efficiency and accountability in the functioning of the Revenue Department.

The Commission, to be headed by Justice (retd) S S Saron, would be tasked with streamlining the existing laws, procedures and processes relating to land administration in line with the requirements of modern agricultural and non-agricultural uses.

It will propose new laws and procedures, along with other methods, to make revenue administration more transparent and responsive to the needs of the people, an official release said here.

According to the notification issued by the Additional Chief Secretary (Revenue), the Punjab Land Records Society would provide secretarial assistance to the Commission.

Such officers of the Revenue Department and other relevant departments of the state government as are required shall also be associated to support the Commission, which may also associate experts as it considers necessary.

The Commission, which would submit its report on the issues referred to it from time to time, will have a term of one year or as decided by the Government. It will meet as per its requirements.

A spokesperson said the Commission would have the mandate to review the organisational structure of revenue related aspirations, expectations, needs and requirements of the contemporary Punjabi society.

It will also examine Punjab Land Revenue Act, 1887, Punjab Tenancy Act, 1887, Punjab Land Reforms Act, 1972 and other related Acts and Manuals administered by the Department of Revenue, to assess their relevance in the present scenario of land use and land holdings, etc.

Apart from this, the Commission would also review the existing Acts and Rules pertaining to Urban Properties in order to protect the rights of people in the urban land, maintenance of records and procedures.

Source- ET Realty

Relaxed rules opening up affordable housing finance sector for start-ups

The regulatory relaxations announced by the Central government have given a leg up to startups in the affordable housing finance segment, opening up both supply and demand as well as making it attractive for investors.

While in the last year’s Budget, the government accorded infrastructure status to affordable housing, in this year’s Budget announcement, finance minister Arun Jaitley announced the setting up of an Affordable Housing Fund in the National Housing Bank to boost the fund flow. The government had also extended the benefits of the interest subsidy up to Rs 2.6 lakh on home loans under the Pradhan Mantri Awas Yojana last year to boost affordability and reach a wider consumer base.

“Easier refinancing by NHB (National Housing Bank) and the relaxed criteria have been the biggest factors supporting our growth since it allows companies like us to go back for refinancing based on the company’s current loan book and internal credit rating. That has made raising additional capital easier and helps us build our books faster,” said Kajal Ilmi, founder, Aviom Capital.

Founded in 2016, Aviom has a total loan disbursement of Rs 33 crore and operates out of 14 branches in Madhya Pradesh and Rajasthan. Aviom has a debt line of Rs 17.5 crore from banks and NBFCs and the startup intends to raise a further Rs 100 crore in the next six months.

The younger crop of companies in this space are also identifying their customer segments very carefully. “There is a lot of customer segmentation, so you have to choose your area of specialisation and ticket sizes to understand customer profiles deeply,” said Ilmi at Aviom. “The market is not impressed by book sizes anymore. Smaller book sizes but better NPAs get you better valuation during fund raising.”

These include those like Vastu Housing Finance, backed by private equity firm Multiples Alternate Asset Management, Aviom India Housing Finance and Ummeed Housing Finance, which among others is backed by impact investor Lok Capital and Nivara Housing Finance. Delhi-based Ummeed finances housing loans with an average ticket size of Rs 9 lakh. Having started operations about 18 months ago, the company already has Rs 100-crore worth of assets under management (AUM) and is targeting an AUM of Rs 400 crore by March 2019.

Regulatory easing is also drawing investors to early-stage startups. “There is increasing investor interest in this segment largely led by the huge demand and supply mismatch in the industry,” said Richa Natarajan, vice-president at Unitus Capital.

“However, since there is very little technology adoption and most operations are largely branch-led, investors are looking for unique business models, innovative sourcing and robust credit underwriting mechanisms in companies. While older companies adopted technology very late, younger startups are storing data on the cloud and have adopted technology-led loan origination and management system besides cashless disbursements and collections, Natarajan said.

Investors, however say that the role of NHB, especially in areas like refinancing schemes, needs to grow much bigger for the industry to grow further. “NHB can do what the Small Industries Development Bank of India did for the growth of the microfinance industry years back,” said Vishal Mehta, managing director at impact investment firm Lok Capital.

Source- ET Realty

Cost of house to include furniture for Income-Tax relief

In a recent order, the Income-Tax Appellate Tribunal (ITAT) has held that the cost of a new residential house will not be limited to the construction cost but also include the purchase price of furniture—if it is an integral part of the property deal. The order comes as a relief to the petitioner as it will reduce his I-T liability.

In this case, Rajat Mehta, an NRI based in New Zealand, sold a large house in Vadodara. To continue ties with his motherland, he bought another smaller house in the same city. He entered into two separate contracts though—one for the purchase of the new house for Rs 60 lakh and the other for furniture for Rs 18 lakh. As tax benefits are available for investment in a new house, ITAT had to decide whether the cost of furniture should also be included while determining the cost of the new house.

Here’s the tax nitty-gritty in a nutshell: If a tax payer makes a profit on sale of a residential house that has been held for at least two years, then such profit is treated as a long-term capital gain (LTCG). This gain is taxable at 20% with adjustment for inflation, referred to as indexation benefit. Section 54 of I-T Act provides for investment-linked benefits. If the LTCG component is invested in another house in India, within a stipulated period of time, then the cost of the new house, or, in other words, the investment made in a property, is deducted. Only the balance component of LTCGs is taxable, which results in a lower tax 

Government releases Rs 9,940 crore to states for Smart Cities mission

The Centre has released nearly Rs 9,940 crore to the states so far for the Smart Cities Mission, with Maharashtra accounting for the highest amount of Rs 1,378 crore, followed by Madhya Pradesh getting Rs 984 crore, according to government data.

The Housing and Urban Affairs Ministry has announced 99 cities for central assistance under the BJP government's flagship programme.

The total proposed investment in these cities was Rs 2.03 lakh crore.

Maharashtra with eight cities, including Pune and Nashik has received central grant of Rs 1,378 crore so far, followed by Madhya Pradesh, with seven cities getting central grant of Rs 984 crore, the ministry data shows.

Tamil Nadu, with the highest of 11 cities selected for the mission, has so far received Rs 848 crore. Karnataka with seven cities got Rs 836 crore. Rajasthan with four cities-- Jaipur, Udaipur, Kota and Ajmer--received Rs 784 crore.

Andhra Pradesh, whose four cities were selected, received a central assistance of Rs 588 crore, Uttar Pradesh with 10 cities received Rs 547 crore and Gujarat, whose six cities were chosen, got Rs 509 crore, the data showed.

Under the mission, the cities propose to take up various projects, including "smart" roads, rejuvenation of water bodies, cycle tracks, walking paths, smart classrooms, skill development centres, upgradation of health facilities, and pan city projects like integrated command and control centre.

The Centre released Rs 8 crore to West Bengal whose New Town Kolkata was selected for the mission in May 2016. However, the state government had already announced that it would not participate in the Smart Cities Mission.

Earlier, Housing and Urban Affairs Minister Hardeep Singh Puri said that as on January 17, there were 2,948 projects worth Rs 1.38 lakh crore in various stages of implementation, while 189 projects worth Rs 2,237 crore had been completed.

Stating that Smart City Mission was setting a benchmark in terms of implementation of projects, Puri had underlined that the progress of implementation depended on the round of selection of the city as it takes around 15-18 months after the selection to call tenders for the projects.

The Centre provides about Rs 500 crore to each city under the mission, with Rs 200 crore funding in the first year of its selection, followed by about Rs 100 crore over the next three years.

The release of funds depends on certain conditions, including satisfactory physical and financial progress indicated by utilisation certificate that the cities have to submit to the ministry.

States that have received around Rs 200 crore so far included Assam, Bihar, Chhattisgarh, Delhi, Haryana, Himachal Pradesh, Jharkhand, Kerala and Tripura.

States that got around Rs 100 crore included Manipur, Nagaland and Sikkim.

Indian HNIs third-largest buyers in US luxury real estate: Report

India's high net worth individuals are increasingly investing in luxury assets overseas, according to top global luxury real estate experts. 

For Sotheby's International Realty, the arm of auction house Sotheby's that offers luxury real estate for sale worldwide, Indians constituted the third largest group of international buyers in the US last year, behind China and Canada. 

Sotheby's International Realty will launch an India desk, especially for Indian buyers in New York this year. The uptick in the number of Indian real estate buyers is being seen in other markets in Europe too. 

Indians invested $7.8 billion in prime residential real estate in the US last year, up from under $6 billion in 2016, while 22% of the buyers of central London properties last year were Indians. 
Industry leaders from the luxury real estate sector discussed such investment trends at the Global Luxury Realty Conclave 2018, which was organised by India Sotheby's International Realty in partnership with the CII. ETwas the media partner for the event. 

"The wealth being created in India is significant," said Philip White, president and CEO, Sotheby's International Realty Affiliates, while Ian Plumley, senior vice-president MENA and India at UK-based Berkeley Group said his company is focused on promoting London as an investment destination through the network being built here. 

No GST on affordable housing buyers! Big step by Modi govt; here is what every flat buyer and builder must know

This is really a big step from Modi government. It will give a huge relief to affordable housing buyers. The Modi government has asked builders not to charge any GST from home buyers as the effective GST rate on almost all affordable housing project is 8 per cent which can be adjusted against the input credit. According to Modi government order, builders can levy GST on buyers of affordable housing projects only if they reduce the apartment prices after factoring in the credit claimed on inputs.

The big development comes after the GST Council, in its last meeting on January 18, had extended the concessional rate of 12 per cent GST for construction of houses under the Credit Linked Subsidy Scheme (CLSS) to promote affordable housing, which has been given infrastructure status in 2017-18 Budget.

The effective GST rate, however, comes down to 8 per cent after deducting one third of the amount charged for the house, flat, towards land cost. This provision is in effect from January 25.

Here are key details of the statement released by Union Finance Ministry:-

– “All inputs used in and capital goods deployed for construction of flats, houses, etc attract GST of 18 per cent or 28 per cent. As against this, most of the housing projects in the affordable segment in the country would now attract GST of 8 per cent. As a result, the builder or developer will not be required to pay GST on the construction service of flats etc. in cash but would have enough ITC (input tax credits) in his books to pay the output GST.”

– “Builders should not recover any GST payable on the flats from the buyers.

– “GST can be recovered from buyers only if builders recalibrate the cost of the flat after factoring in the full ITC available in the GST regime and reduces the ex-GST price of flats.”

The concessional rate of 12 per cent GST was already applicable on houses constructed under three components of the Housing for All (Urban) Mission/ Pradhan Mantri Awas Yojana (Urban) — (i) ln-situ redevelopment of existing slums using land as a resource component; (ii) Affordable Housing in partnership and (iii) Beneficiary led individual house construction/enhancement.

In the meeting last month, the Council extended this tax benefit to CLSS for Economically Weaker Sections (EWS)/Lower Income Group (LIG)/Middle Income Group-1/Middle Income Group-2 (MlG-2) under the PMAY (Urban) programme.

Under CLSS, subsidy is being provided on home loans taken by eligible urban poor (EWS/LIG/ MIG-I/ MIG-II) for acquisition and construction of house. The ministry said now the buyers under CLSS would be entitled to interest subsidy as well to a lower concessional rate of GST of 8 per cent.

Source- The Financial Express