Impact of Demonetisation on Real Estate Sector

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The entire nation is under shock; things are going crazy since the night of 8th November 2016. Prime Minister Modi has played his master card against the fight with black-marketing and corruption by demonetization 500 and 1000 currency note. And its effect can be felt in each and every Indian household and business form, be it the jewellery or film industry.

As for the real estate sector, it has welcomed the change with an open arms, and it is believed to bring greater accountability and transparency. Also, the change will put downward pressure on the housing prices that will further help to revive the otherwise sluggish housing segment. Besides the change will lead the sector towards a cashless economy that is a well-known indicator of a mature economy.

But demonetization has not been greeted equally well by all divisions of the real estate sector. Secondary property market and unorganised builders are the ones who will witness the adverse impact. As unlike the big builders and developers and organised players, they deal in cash and are not using banking channels for operation.

CREDAI Chairman, Irfan Razack said that “It’s a fantastic and bold move by the government. A lot of money will get into the banking system. Listed entities and organised players will not be affected by this decision.” Adding to which he also said that sale and demand of housing would not be affected.

 All in all, this significant move will curb unaccounted cash from the sector and is a tremendous step towards transparency.

Ministry Notifies Rules 2016 Real Estate Act

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A lot has been said and written about the Real Estate (Regulation and Development) Act 2016. At its core is to bring accountability and transparency in the real estate sector, which it intends to do with the formation of new regulation both at the buyers and builders end.

As for 1 Nov 2016, rules are only notified by Ministry of Housing and Urban Poverty Alleviation that will be applicable on five union territories – Daman & Diu, Andaman and Nicobar, Chandigarh, Dadra & Nagar Haveli and Lakshadweep. Other states like Karnataka, Rajasthan, and Maharashtra are still under process to either notifying or rule formation.

According to the act, regulatory authorities have to be put in place by respective state governments by 30th April 2017, i.e. a day before the act is scheduled to come into effect. Below are mentioned, HUPA rules that will now serve as guidelines for state governments.

So, if you are a homebuyer, here’s what the act has in stock for you –

1. Buyers can demand compensation or refund at an interest rate of SBI’s MCLR (marginal cost of lending rate) plus 2%.

2. Within 45 days of the claim raised by the buyer, builder would have to repay the amount

3. Builders can withdraw the amount from the special account in proportion to the completion of the project.

4. Under RERA, builder would have to maintain full transparency regarding the company and its projects

5. Disposal of complaint within 60 days of filling

6. No discrimination about sale of property

If you are a builder, here are some points for you to note –

1. Fee for project registration reduced to half

2. Compulsory to  register the property with authorities

3. Builder will now have to specify completion date at the time of registration

4. Declare information about open and closed parking areas

5. Insurance of the project now mandatory

6. Declare the size of the project in terms of carpet area

7. Regular updating of the site regarding project status

8. As relief, builders are now not required to disclose their income-tax returns

9. Within three months of applying for project registration, a separate bank account has to be opened for depositing 70% of the amount collected and unused ensuring completion of the project.

Plant Watering Exercise Undertaken

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Nothing worth having comes easy. Especially, when you are aiming for sustainable development by way of conserving nature and want to extend the benefits that mother earth withholds on to the future generations. Trimurty Builders are a firm believer of the above though and therefore time and again organise/participate in events that have nature care & protection at its core.

One such activity was held last year by CREDAI Rajasthan in collaboration with Shri Kalptaru Sansthan. Trimurty is a long listed member of CREDAI Rajasthan our MD Mr Anand Mishra being the Joint Secretary of CREDAI Rajasthan.

The said event was part of the ongoing drive for environmental protection that started more than a year ago. Back then plants were laid down on the grounds near the airport to prevent soil erosion and provide the city with a green patch that can source fresh air around. As a follow-up, these plants are watered on a regular basis, and the caretaker assures that every plant gets its share of water treat.

Below is attracted a picture gallery of the event.

DSC_0274 (1) IMG_20161013_145106 IMG_20161013_150457 IMG_20161013_150931 

Rules for Real Estate Bill Finalised – 10 Changes that’ll Transform the Sector

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Real Estate Act was long passed by the parliament in March 2016, and now the center has finalised the rules for same. All these efforts are put in by the government to ensure earliest regulation of the real sector in terms of transparency and consumer interest.

At the occasion Union Urban Development Minister M Venkaiah Naidu urged the private sector to join in and contributes its bit to meet the shortage of houses in the country. Also, according to him the bill is a ‘regulation and not a strangulation’.

Here the 10 reformers that this new bill will bring along once it get communicated to the states. Also, states will be given a mere time frame of 6-months to appoint regulators and bring this act into implementation.

  1. Developers will now be required to deposit 70% money acquired from the buyers in a separate cost of construction and land account.
  2. Commercial projects registration with regulatory authority is now mandatory.
  3. For any delays on the part of the developers or consumers, the concerned party will have to pay interest. Thus, ending developers favouritism.
  4. Insurance of land title will be covered under the bill.
  5.  Violation of rules will lead to imprisonment, 3 years for the developers and one year for consumer and real estate agent.
  6.  Plot area of 500 sqm or 8 apartments are now covered under norms for registration.

  7.  Reducing the scope of manipulation, the bill clearly defines carpet area.
  8. Developer now is liable for any structural defects up to a time frame of 5 years. Also, plans cannot be changed without the consent of at least 2/3 allottees.
  9.  Remedies will now be disposed in a shorter time frame in tribunals and regulatory authority.

10. Regulators are now required to submit information concerning to lay out plan, agreements,       status of approval, project detail, land status, implementation schedule etc. with the                     regulatory authorities.

Ten Benefits of GST Bill

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Rajya Sabha made a historical development by paving the way for the goods and service tax bill. The said bill is expected to trigger GDP bump by a percent and even more.

Let’s see what all specific areas will this bill benefit and how.

1. Boost in Revenue, suppliers will pay tax thanks to tax credit. Also, decline in tax exempt goods will give a push to earnings.

2. Replace Many with One; GST will replace seventeen indirect taxes.

3. Fall in Cost of Capital Goods, full income tax credit (under GST) will reduce cost of capital goods by 12 to 14%.

4. Increased Protection from Imports, this new bill provide suitable countervailing duty.

5. Inventory cost will decline.

6. Creation of a Common Market, absence of which increases the cost by 20-30%.

7. Cheaper Manufacturing Goods, thanks to lower tax and logistic costs.

8. Development of All, with no 2% inter-state levy, new opportunists will be created for smaller states.

9. E- Commerce Wings will Spread, GST will put an end to many levies and state restrictions.

10. GPD Rise, thanks to elimination of tax cascading 80 basis point rise is expected in next 3 to 5 years.