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

Taken home loan before April 2016? Expect relief soon

Monthly maintenance charges, which one pays to co-operative housing society (CHS) or to be specific to its resident welfare association (RWA), will not attract Goods and Service Tax (GST), provided such charges are Rs. 7,500 or less per month. ‎The GST Council in its meeting held in January has enhanced the threshold applicability limit. Earlier GST was applicable if the monthly bill was more than Rs. 5,000 per month. The new limits apply from January 25.

‎There is no change in the GST registration requirement for CHS. It has to register if it's annual turnover is Rs. 20 lakh or more.

An official release by the Ministry of Finance, issued on Wednesday, February 7, clarifies that: ‎RWAs shall be required to pay GST on monthly subscription charged from its members if such subscription is more than Rs.7,500 per month per member and the annual turnover of RWA by way of supplying of services and goods is also Rs. 20 lakhs or more.‎ Thus smaller CHS with a lower turnover do not have to register under GST and comply with its various obligations.‎

Maintenance charges are collected by a CHS for various purposes like providing security, lift maintenance, maintenance of common areas like a lobby or a garden. In tony luxury housing societies which have facilities like a club house, gym or swimming pool the monthly maintenance charges are steep, running up to more than a lakh. These charges payable by members are typically a reimbursement for expenses incurred by the CHS.

The CBEC in an FAQ has earlier clarified that sinking fund, repairs & maintenance fund, car parking charges, non-occupancy charges, or simple interest for late payment of the dues of the CHS would be covered by GST as these are collected by the CHS for supply of services meant for its members.

The official release adds that under GST the tax burden on RWAs will be lower as they would now be entitled to Input Tax Credit (ITC) in respect of taxes paid by them on capital goods (generators, water pumps, lawn furniture etc), goods (taps, pipes, other sanitary/hardware fillings etc) and input services such as repair and maintenance services.

Source- ET Realty

Affordable housing fund: Here is how government will raise Rs 25,000 crore over the period of 4 years

Budget 2018: The government will raise extra-budgetary resources of Rs 25,000 crore for the Affordable Housing Fund over the period of 4 years till 2022, housing and urban affairs minister Hardeep Singh Puri said on Tuesday. The Fund will be anchored in National Housing Bank and will be channelled through the housing finance companies. “A sum of Rs 25,000 crore will be raised through non- budgetary funds which will help in the interest payment of credit-linked subsidy scheme (CLSS). Now there will be no bottlenecks,” Puri said. Last week, while presenting the Budget, finance minister Arun Jaitley had announced the Affordable Housing Fund under National Housing Bank to boost demand and supply of low-cost homes. Jaitley said the government will “establish a dedicated Affordable Housing Fund (AHF) in National Housing Bank, funded from priority sector lending shortfall and fully serviced bonds authorised by the government”.

Talking about the Budget allocation, Puri said his ministry has been allocated Rs 41,756 crore in 2018-19, up nearly 3% from Rs 40,617 crore in 2017-18. The announcement of a dedicated AHF will go a long way in meeting the requirement. NHB will be working out the modalities for quick operationalisation of the fund,” Puri said. Around 37.45 lakh dwelling units in 7,474 projects with an investment of Rs 2,03,752 crore involving central assistance of Rs 57,681 crore have been approved under PMSY in the last 31 months. Out of this, 19.49 lakh houses have been grounded and 3.19 lakh houses have already been completed. A total of 2,78,267 houses have been occupied, Puri said. Launched on June 25, 2015, the aim of PMAY is to address the gap in housing demand and supply in urban areas in respect of economically weaker sections, low and middle income groups and meet the target of “Housing for All” by 2022, with an aim to provide a decent pucca home.

A sum of Rs 2,500 crore has been allocated under the Swatch Bharat Mission in 2018-19, up 8.69% over last year’s allocation. Under the Smart Cities Mission, Rs 6,169 crore has been allocated, up 54.2% from 2017-18. Under this mission, 99 cities have been selected so far. A total investment of Rs 2,03,979 crore has been proposed by these smart cities in their smart city plans. For the AMRUT scheme, there has been an increase of 20% in Budget allocation to Rs 6,000 crore in 2018-19. For the HRIDAY scheme, the ministry has been allocated Rs 161.5 crore in 2018-19, up 7.67% from last year.

Source- The Financial Express

Infrastructure status to affordable housing will lower borrowing rates, says government

In order to promote affordable housing, the government has made several efforts to create enabling environment and ecosystem.Towards such an end, the Government has granted infrastructure status to affordable housing which will enable these projects to avail the associated benefits such as lower borrowing rates, tax concessions and increased flow of foreign and private capital. The announcements were also made pertaining to the affordable housing such as profit-linked income tax deduction, relaxations on tax for vacant/unsold units for 1 year, counting of the carpet area instead of the built up area of 30 and 60 sq.m., among others.  This was stated by Shri Hardeep Puri, Minister of State of Housing & Urban Affairs (I/C) at exclusive institutional investor event held here today.

Addressing the participants, Shri Puri informed that additional measures, such as the Real Estate (Regulation and Development) Act, 2016 (RERA), Real Estate Investment Trusts (REITs), the Benami Transactions (Prohibition) Amendment Act 2016, higher tax breaks on home loans, the Goods and Services Tax (GST), land related reforms, optimizing development control rules, rationalizing of the stamp duty and registration charges, digitalization etc. have also been introduced.  “These will be effective in spurring the housing and construction activities, providing huge relief to real estate developers. Also, these would attract private and foreign investments in the housing sector, having a positive multiplier effect on GDP and labor market. We are aware that availability of encumbrance free land within existing municipal areas for urban housing schemes is not an easy task. Therefore, provision has been made to include rural areas falling within the notified   Planning/Development areas, under ambit of PMAY (U). It would leverage availability of additional land at cheaper cost for construction of affordable houses”.  Responding to the demand and supply gap in affordable housing the Government of India launched Pradhan Mantri Awas Yojana (PMAY)-Urban in 2015. The larger goal is to fulfill the housing need of homeless urban poor and enable them to own decent pucca houses with basic infrastructure facilities by 2022. Based on demand assessment at the state level, the nation has the mammoth task of constructing about 12 million houses under EWS/LIG segment of the society in order to achieve the goal of Housing for All, he added.

The Global Housing Construction Technology Challenge (GHCTC) a mega global event has been initiated to attract innovative construction technologies which are adaptable, sustainable, low cost and can be used for creating Large Scale Affordable Housing at rapid pace.  Over the next five years until 2022, we will see affordable housing action on the ground unfolding at an increasingly rapid pace – and everyone, not least of all the country’s economy and most importantly the long-neglected end-user of affordable housing, stands to benefit, he further added.

Source- The Financial Express

Govt has been supportive of housing sector: NHB chief

The National Housing Bank CEO and MD, Sriram Kalyanaraman believes that Union Budget 2018 was meant for the housing sector, and the Prime Minister Narendra-Modi led government has been in consistent support of the real estate sector.

“I would label it as a budget meant for housing sector. One is that this sector (real estate and housing) is expected to touch probably about 180-200 billion in next four-five years. This government has been consistently supporting the housing sector with the goal of housing for all. There are many concessions which were announced last year in the budget. Now this year they have set up an affordable housing fund, which would ensure that once the fund is operable that we give loans to affordable houses through refinancing,” Kalyanaraman said while talking to ANI.

“Now what it will also do is, this will at a concessional rate, it will have an on-board lending cap, so that the customers also get it at a little affordable prices, especially the customers within the low income limit. If you see National Housing Bank, so far has already done 21 lakh houses under what we used to call as the rural housing fund and the urban housing fund which we had re-financed to the various players in the industry and again with a on-board lending cap. So that would continue further with this affordable housing fund,” he added. He also lauded the government’s skill development initiative and said that with the initiative the quality of affordable houses will go up. “If you have more masons, carpenters, getting more skilled, you get the quality of affordable houses increased because people then would like to use the local labor. More than that, the entire economy of the entire area will improve because housing is always related to about 250 allied industries. The wages will go through the same local area, the whole economy will improve. Third is infrastructure. With so much focus on infrastructure, as infrastructure expands, the affordable housing will also expand to the periphery of the city. Which is a great thing,” Kalyanaraman said.

“With so much focus on rural and farmers, if the rural income goes up, then that is going to create its own demand on rural housing. So, I would say all around it is a long term completely beneficial budget to the affordable housing,” he added.

The government has for some time now been reportedly planning to bring stamp duty on property before registration under the ambit of the Goods and Services Tax regime. Kalyanaraman feels that it needs to be rationalised for affordable housing.

“Today it (stamp duty) varies between eight percent to 13-14 percent in some of the states, which we think is fairly on the higher side. Especially for a customer who buys a house at Rs. 10 lakhs or Rs. 15 lakhs. If the stamp duty is at 10 percent, that is another Rs. one lakh which goes in. So our representation to many state governments is that let’s rationalise it for affordable housing. Let’s take it Rs. 10 lakhs or Rs. 15 lakhs and please rationalise it there, because it would help customers buying; purchasing power would increase a little more,” he said.

“It would also give a boost to the house buying segment which means your other revenues around it automatically go up,” he concluded. 

Source- ANI, Siasat Daily

What Budget 2018 offered real estate sector

Here is what the finance minister announced in Budget 2018:

Affordable Housing Fund

The government will also establish a dedicated Affordable Housing Fund (AHF) in National Housing Bank, funded from priority sector lending shortfall and fully serviced bonds authorized by the Government of India.

National Housing Bank

National Housing Bank Act is being amended to transfer its equity from the Reserve Bank of India to the Government. Indian Post Offices Act, Provident Fund Act and National Saving Certificate Act are being amalgamated and certain additional people-friendly measures are being introduced. To provide the Reserve Bank of India an instrument to manage excess liquidity, Reserve Bank of India Act is being amended to institutionalize a Uncollateralized Deposit Facility. Securities and 23 Exchange Board of India, Act 1992, Securities Contracts (Regulation) Act 1956, and Depositories Act 1996, are being amended to streamline adjudication procedures and to provide for penalties for certain infractions. These proposals are in the Finance Bill.

REITs

The Government and market regulators have taken necessary measures for development of monetizing vehicles like Infrastructure Investment Trust (InvIT) and Real Investment Trust (ReITs) in India. The Government would initiate monetizing select CPSE assets using InvITs from next year.

Circle Rates

Currently, while taxing income from capital gains, business profits and other sources in respect of transactions in immovable property, the consideration or circle rate value, whichever is higher, is adopted and the difference is counted as income both in the hands of the purchaser and seller. Sometimes, this variation can occur in respect of different properties in the same area because of a variety of factors including the shape of the plot and location.

In order to minimize hardship in real estate transaction, Jaitley proposed that no adjustment shall be made in a case where the circle rate value does not exceed 5% of the consideration.

Smart Cities

Smart Cities Mission aims at building 100 Smart Cities with state-of-the-art amenities. I am happy to inform that 99 Cities have been selected with an outlay of Rs 2.04 lakh crore. These cities have started implementing various projects like Smart Command and Control Centre, Smart Roads, Solar Rooftops, Intelligent Transport Systems, Smart Parks.

Projects worth Rs 2,350 crore have been completed and works of Rs 20,852 crore are in progress. To preserve and revitalize soul of the heritage cities in India, National Heritage City Development and Augmentation Yojana (HRIDAY) has been taken up in a major way.

Source- ET Realty