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MCHI-CREDAI says LBT will further burden home buyers

Track2Realty — Sat, 18 May 2013 03:28:48 +0000

Track2Realty: The voice of the real estate industry in Maharashtra, MCHI-CREDAI today opposed the Government’s decision to introduce LBT saying it goes against the home buyers’ interests.

“We strongly believe that the LBT which the government is trying to introduce is detrimental to both the developer and home buyer community. What it means is that home buyers who are already paying various taxes will need to cough up even more in the form of this new tax. The affordable housing is becoming a distant dream with additional new taxes being introduced from time to time. The primary motive of the government is to provide affordable housing and not to use housing as a source of generating revenue” said Vimal Shah, President of MCHI-CREDAI.

Developers who are already reeling under the pressure of sluggish economy will be forced to pass on this new tax to end-users. This will raise property prices, thereby hurting the prospects of affordable housing, which is the need of the hour” added Shah.

We request government to reconsider in these taxing issues. The government should come up with policies which will help reduce burden on home buyers.

CREDAI Chairman says LBT will lead to rise in corruption

Track2Realty — Thu, 16 May 2013 15:19:06 +0000

Track2Realty: Opposing the Maharashtra government’s decision to impose local body tax (LBT) in lieu of octroi, developers’ apex body CREDAI Chairman Lalit Kumar Jain said the new levy will result in rise in corruption and be detrimental to business as well as consumers. There is a potential threat of it becoming breeding ground of corruption.

Jain said the government should instead raise VAT to compensate for octroi. Creation of an additional machinery for LBT collection will only increase burden on the government and it could be avoided through just raising VAT.

He expressed the apprehension that the new machinery and the new system of search operations that come with LBT will lead opening up another window for corruption.

He also vehemently opposed the flat one per cent LBT on real estate and over and above LBT on all building material. This will only lead to increased burden on end buyers who are forced to cough up heavy amounts for a series of taxes.

“Heavy tax regime will also discourage new businesses and may even lead to a fresh capital flight out of Maharashtra,” Jain said and appealed to Chief Minister Prithviraj Chavan to reconsider LBT and opt for much more practical approach.

He added that Maharashtra was known for trend setting approach in tax rationalisation(Maharashtra was fist to rationalise stamp duty bringing it down to 1% onwards from 10%) and pro development policies but off late we have lost that approach.

New property tax to hit Bengal real estate sector: CREDAI

Track2Realty — Thu, 09 May 2013 12:20:15 +0000

Track2Realty: The real estate sector in West Bengal would be hurt if a proposed tax on property sales is introduced in the Finance Bill 2013, the Confederation of Real Estate Developers’ Association of India’s (CREDAI) Bengal chapter said on Wednesday, May 8.

This, according to CREDAI Bengal, is because valuation of properties by registration authorities in the state in many cases are much higher than their actual transaction values.

The central government has proposed a new tax on real estate transactions on the basis of assessed valuation of a property at the time of transfer, instead of levying a tax on the basis of sale price fixed when the project was initiated.

“In West Bengal, developers are largely affected due to the high valuation (of properties), which in lots of cases are more than the actual transaction price,” CREDAI Bengal President Harsh Vardhan Patodia said.

Developers said the impact of the proposed tax on the sector would be huge across India as they have to pay additional income tax on the income, which is “not actually earned” by them and similarly purchasers also have to pay taxes based on deemed income, which they have “never received”.

According to them, the impact of the new tax would be “much greater” in Bengal as in many cities, including Kolkata, the actual value of property is much less than the valuation assessed by the stamp duty or registration authorities.

“The declared circle rate (for valuations) is much higher in the state and in some cases it goes up to 25 percent to 100 percent of transaction,” Patodia said.

According to Patodia, if the state government did not rationalise the circle rate, real estate transactions would be impacted severely.

“The problem is across India. But if West Bengal does not rationalise the rate in certain areas, transactions will not take place, so the business will come to a standstill. This problem will be very peculiar to the state,” he added. RBI to launch plastic currency notes soon.

Realty regulatory bill to recognise only carpet area

Track2Realty — Sun, 05 May 2013 12:25:56 +0000

Track2Realty-Agencies: The proposed bill to regulate the real estate sector would make it mandatory for the development authorities to clear the building plan on the basis of carpet area, a top government official said on Saturday, May 4.

The government will bring the Real Estate (Regulation and Development) Bill in the next session of Parliament.

Addressing an ASSOCHAM conference on affordable housing, Ministry for Housing and Urban Poverty Alleviation (HUPA) Secretary Arun Kumar Misra said only the carpet area will be recognised in the regulatory bill.

“The municipalities and the development authorities would have to pass the map on the basis of carpet area and this would be a mandatory requirement as any other criteria apart from that like the super area or the built-up area and others would not be recognised by us,” Misra was quoted as saying in a statement issued byASSOCHAM.

In the national capital region (NCR), developers sell housing units on the basis of super area that includes built- up area plus area occupied by common amenities like lifts, corridors, club house and stairs. Super area is usually around 25 per cent more than built up area.

On the real estate regulatory bill, he said, “It would be difficult to give a time frame as we wanted to bring the real estate bill in Parliament in this session but we will not give up and definitely try to bring it in the next session.”

Last month, the Union Cabinet had deferred the approval of draft bill to set up a regulator for the real estate sector with provisions for jail term for the developer for putting out misleading advertisements about projects.

The proposed regulator also seeks to make it mandatory for developers to launch projects only after acquiring all the statutory clearances from relevant authorities.

It also has provisions under which all relevant clearances for real estate projects would have to be submitted to the regulator and also displayed on a website before starting the construction.

Misra said the government would release the affordable housing task force report to the state governments in the next 15 days and would ask them to adopt the policy guidelines.

SC breather for Campa Cola residents

Track2Realty — Thu, 02 May 2013 14:01:38 +0000

Track2Realty: In a reprieve for 140 families of Campa Cola Compound at Worli spending sleepless nights over the sword of demolitions hanging over their head, the Supreme Court on Wednesday, May 1, posted a special leave petition by a group of residents for hearing on Thursday.

The petitioners moved the Supreme Court against a Bombay High order dismissing their plea seeking stay on the 48-hour notice served by BMC to demolish the 140 flats.

Senior advocate Fali Nariman moved the apex court. The Bench that heard the Campa Cola residents’ case had passed its verdict on February 27, 2013 directing BMC to demolish the apartments.

BMC on its part served a notice to the residents to vacate the premises within a short time of 48 hours as the civic body planned to carry on demolitions Monday onward. Subsequently, the BMC action was put off till tomorrow for inadequate ability of police protection.

With the Supreme Court’s decision to hear the residents’ petition tomorrow, advocates representing them have sent letters to BMC and the concerned assistant engineer in charge of building proposal, Parel, Mumbai at G/South Ward drawing their attention to the latest developments. The advocates have also requested the authorities not to resort to any coercive action against the residents as the petition is slated to be heard at 2 PM tomorrow.

In a last ditch effort to save their homes, the residents have appealed to all top authorities including the Maharashtra Government and BMC to take a realistic view of the crisis and save the families from going homeless over night.

The housing society has appealed to the Government to regularize the 35 floors in question so that residents do not lose their biggest investments – their homes. They are also exploring options for amalgamation of their plot with an adjoining plot, which is part of slum rehabilitation project.

“We have spent our hard earned money on our flats and we have been living here for well over 25 years paying all municipal taxes,” said a senior citizen wondering as to where will he go as his house faces BMC’s hammers on Monday.

This unprecedented move is the biggest demolition undertaken in the city by the BMC and threatens to bring hundreds of people, including many senior citizens, infants and young children, on the streets. The 35 floors in question house over 900 residents in 140 flats spread across seven buildings in the society. Many of these residents have been living in the society for over 25 years and will have nowhere to go as they do not own a second home in the city.

“We are being traumatized for no fault of ours. We have regularly been paying property taxes, registration fees and cooperative society fees, yet we are being targeted in this manner. We sincerely hope that better sense prevails and justice is done,” said one of the residents.

Haryana govt notifies Development and Regulation Act

Track2Realty — Sun, 14 Apr 2013 09:15:23 +0000

Track2Realty-Agencies: Haryana government has notified the Haryana Development and Regulation of Urban Areas (Amendment) Act, 2013 to regulate land use in the state.

The move is aimed at regulated use of land in order to prevent ill-planned and haphazard urbanisation in or around towns and for the development of infrastructure projects in the state, an official spokesman said.

The Haryana Infrastructure Development Board has been constituted under the Chairmanship of Chief Minister Bhupinder Singh Hooda, he said adding, an executive committee under the chairmanship of Haryana Chief Secretary will also be constituted under the Board to aid and assist it in discharging its functions.

The Board will be the apex body for overall planning and development of infrastructure projects, the spokesman said.

The Board will act as a nodal agency to co-ordinate all efforts of the government regarding development and implementation of infrastructure projects involving private participation and funding from sources other than those provided in the state budget and will also identify infrastructure projects for private participation.

It will promote competitiveness and progressively involve private participation while ensuring fair deal to end-users, identify and also promote technology initiatives in urban development and infrastructure development sector for improving efficiency in the system.

Bill to regulate real estate will not clip wings of players’

Track2Realty — Tue, 02 Apr 2013 06:57:33 +0000

Track2Realty-Agencies: The proposed bill to regulate the real estate sector seeks to establish a transparent system of delivery and would not hamper the growth of the sector, a top government official has said.

Addressing a conference of CREDAI, Ministry of Housing and Urban Poverty Alleviation Secretary Arun Kumar Misra assured the developers that the proposed Real Estate (Regulation and Development) Bill is “comprehensive” and “will not clip your wings”.

CREDAI, the realtors’ apex industry body with more than 9,000 members across the country, has been opposing the proposed law saying that the Bill in the current form is not practical and only favours property buyers.

Misra, however, said, “The Bill is trying to establish transparent and open system of delivery.”

Earlier Housing and Urban Poverty Alleviation Minister Ajay Maken had said the bill would soon be brought before the Cabinet for approval and the government plans to introduce the Bill in the Budget Session of Parliament.

The bill aims to establish a regulatory authority for enforcing fair practice and accountability norms and fast track dispute resolution mechanism in realty transactions.

The Government plans to set up a tough regulator for the real estate sector with provisions for even jail term for the developer for putting out misleading advertisements about projects. The proposed regulator will also make it mandatory for developers to launch projects only after acquiring all the statutory clearances from relevant authorities, Maken had said at the National Editors’ Conference here.

Misra said the Ministry would try to implement the taskforce reports on affordable housing and rental housing in the next two years.

The Ministry has taken up the issue of liberalisation in Foreign Direct Investment (FDI)norms in the real estate with DIPP (Department of Industrial Promotion and Policy), he said.

Single window plan for real estate projects soon: Maken

Track2Realty — Tue, 26 Mar 2013 11:08:26 +0000

Track2Realty-Agencies: In a move aimed at providing a major fillip to the construction sector, the Centre is likely to come up with a ‘single window’ system for the country’s real estate sector soon, Union Minister for Housing and Urban Poverty alleviation (HUPA) Ajay Maken said in New Delhi on Sunday, March 24.

Maken’s remarks, made at the National Editors Conference held at the Vigyan Bhavan, are pretty significant since under the existing system it is not uncommon for real estate projects to be held up for up to one year or more before the necessary sanction is accorded.

“The ministry (HUPA) had set up a Committee under the Chairmanship of Dhanendra Kumar for Streamlining Approval Procedures for Real Estate Projects (SAPREP).”

The Committee had since submitted its report and the Ministry was in the process of formulating a ‘single window’ system for the clearance of real estate projects throughout the country, which was expected to bring down the average approval time from 196 days to 45-60 days,” the Minister said.

According to him, the process involved the submission of a single composite application form (CAF), which would ensure simultaneous clearance from the municipal corporations, state governments and the Central agencies.

Maken said that the Ministry would incorporate the recommendations of the SAPREP Committee as one of the mandatory reforms to be carried out by the states, if they wanted to avail the funds provided under the ‘Rajiv Awas Yojana’.

It was also revealed that the HUPA would mobilise a whopping Rs 60,000 crore to finance its ambitious housing scheme for the low income group (LIG) and the economically weak sections (EWS).

And a credit risk guarantee fund trust (CRGFT) partnering the National Housing Bank (NHB), HUDCO and other financial institutions has been set up for the purpose and the steps initiated by the ministry would significantly help to bridge the gap between shelter and housing, the Minister added.

On the Urban Housing Fund announced by Union Finance Minister P Chidambaram, Maken said that a separate fund of Rs 2,000 crores, to be administered by the National Housing Bank, had been envisaged to support the financing and credit to the affordable housing sector.

It will benefit the LIG and the EWS sections, which were not getting the benefits under the current priority sector lending limit of Rs 25 lakh. HUPA had decided to limit the loan amount to `8lakh and the cost of the dwelling units to Rs 12 to Rs 15lakh.

CREDAI disappointed over RBI monetary policy

Track2Realty — Tue, 19 Mar 2013 12:10:46 +0000

Track2Realty: Expressing disappointment over the RBI’s decision to cut repo rate by “just” 25 basis points, realtors’ apex body CREDAI said the central bank appears to missing opportunities time and again.

“It is high time that we looked at enhancing growth by infusing liquidity and going in for rate cut,” said Lalit Kumar Jain, National President of CREDAI.

CREDAI – the Confederation of Real Estate Developers’ Associations of India – has over 10,000 members across 20 cities pan-India.

Talking about options before the RBI, Jain pointed out that risking inflation for growth is the right economic policy. Inflation could well be curbed by giving a big boost to production and flooding market with supplies. It is not a prudent policy to risk anarchy through a tight monetary policy.

“Judging by the Ministry of Housing’s pragmatic approach towards to the real estate industry, the developer community was hopeful that the RBI too will soften its stand and help the sector revive. But the continued stubborn approach of RBI is shocking,” he said.

Jain said the mid-quarter monetary policy is by and large uneventful since it does not take into consideration of the real estate sector that contributes handsomely to the GDP. “One would have expected RBI to be realistic and appreciate the fact the real estate industry supports hundreds of other industries and hence plays a major role in rejuvenating the economy hit by job losses and dwindling investments,” he said.

RBI should take steps to ease funding for real estate at much lower rates of interest in the interest of millions of home seekers and ease CRR as well, he said.

“We cannot hope to make housing affordable for the masses with such restrictive policies,” Jain added.

MCHI-CREDAI slams new property tax, backs consumer

Track2Realty — Thu, 14 Mar 2013 08:33:45 +0000

Track2Realty: Strongly opposing the new property tax structure proposed by Brihanmumbai Municipal Corporation (BMC), realty estate developers body MCHI-CREDAI has extended support to the consumer agitation against the new slabs.

Flat owners are worried that the property tax amount, as calculated by the new formula, will result in doubling of the dues which are supposed to be paid by this month end.

Over 35,000 housing societies along with 40 NGOs plan a one-day hunger strike and a rally against the new property tax system.

Paras Gundecha, President, MCHI-CREDAI, said the new property tax formula is against the consumer interest.

At a time when the common man is already burdened with the series of taxes like stamp duty and VAT, the increased property tax is bound to deal a cruel blow to flat owners, he said.

As inflation is taking a toll on everyone, the consumer is under tremendous pressure due to job loss, economic slowdown, and taxes at every stage of his life. It is high time the government brings greater clarity in the calculation methods it uses for these taxes and reduce the burden on consumers, Gundecha added.