Tag Archives: property

Memorandum for removal of service tax on under construction property

Confederation of Real Estate Developers’ Associations of India (CREDAI) a real estate industry body submitted a memorandum to the Finance Ministry concerned with the appeal for removal of service tax on housing complexes under construction. The Chairman of CREDAI, Kumar Gera stated that they have put forth their concerns and suggestions and also discussed the probable impact of the provisions with the Ministry.

According to Gera, the money collected through the imposition of service tax on real estate development will not be big enough, rather it would majorly lead an overall negative sentiment and a net loss of revenue. In budget 2010,Service Tax is imposed on 33 per cent of total selling price.

According to CREDAI, it was an impractical proposal to levy service tax on under construction complex since it would lead government giving preference to the secondary market of completed projects. An understanding of the problem and required corrective steps will be taken is a hope from the government. The list of recommendations was built in consultations with KPMG, its knowledge partner and was submitted to Y G Parande, a Finance Ministry Member (Budget).

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Registering a property could soon become easier

The government is planning to replace the Indian Stamp Act 1899 with a simpler law that will do away with a large number of provisions and fees.The finance ministry has already initiated a preliminary exercise to draft the new law and is hopeful of finalizing it by the end of the year. The draft will need to be discussed with State governments to elicit their views as well.

Under the Indian Registration Act, the purchase of a house should be registered with the office of the registrar or sub-registrar of the district within whose jurisdiction the property is situated. Registration of property helps trace the history of ownership of a property.At present, the documents are physically verified by different departments, making the process of registration a time-consuming one. The new legislation is expected to address the problems being faced in registration of properties. The proposed legislation is likely to recognize electronic stamping and electronic payment of stamp duties. At present electronic stamping and electronic payment of stamp duties facility is available as part of the e-governance initiative for companies that wish to file their papers online with the Registrar of Companies.

The government is also planning to rework the current structure of stamp duty fees and penalties. Duties charged in the smaller denominations could be replaced with specific amounts or be calculated as a percentage. It is to be noted that the Law Commission had taken up the issue of amending the Indian Stamp Act last year. It had suggested in its report that the required fee for any transaction or court fee should be paid by demand draft, cash, or postal order rather than through non-judicial stamp papers or special stamps.

AP plans Integrated townships plan to tide over the shortage of affordable housing

Hyderabad: The Andhra Pradesh government has devised a model `integrated townships plan’ to tide over the shortage of affordable housing in the state. According to state housing minister, a recent survey had indicated that nearly 1.76 lakh houses are needed to be built for urban people in the state.  State housing minister C Shilpa Mohan Reddy said that the biggest barriers to realtors in providing affordable housing were skyrocketing of prices of land and raw materials, and over-taxing of housing that accounts for almost one-third of the cost.

At a one-day seminar on ‘Housing For All’ organised by the Confederation of Indian Industry (CII) Reddy said that as part of this plan the state government was in the process of allotting 100 acres of land in each of the municipal corporations, 50 acres in each of the municipalities, and 10 acres in each mandal.
Apart from this, the state government is constructing 26,000 flats in and around Hyderabad and 50,000 flats across the state under its own `Rajiv Swagruha scheme’.The state government had also taken up a massive housing scheme for those living below the poverty line (BPL) under the `Indiramma Program‘. About 81 lakh houses have been sanctioned in rural and urban areas for BPL families, of which about 27 lakh houses have already been completed.

The biggest barriers to realtors providing affordable housing were skyrocketing of prices of land and raw materials, and over-taxing of housing. If taxing of housing is made more rational and transparent, and levied through a single-window, then it will help the developers a great deal in providing affordable housing.

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AP plans integrated townships to provide affordable housing

A draft new law on the much-awaited real estate regulator

The government has unveiled a draft new law on the much-awaited real estate regulator.The draft bill makes it mandatory for builders to register their projects with the regulator before marketing them.The biggest relief would be that a property buyer would know exactly what he is buying. The draft bill also makes it mandatory for the builder not to accept any advance from home buyer before a sale agreement is put in place.

According to the draft, a builder will have to register a project with the regulator before he can market the properties.The builder will have to submit a documentary proof of land ownership and the mandatory licences to the regulator for registration.This process will ensure the legitimacy and the viability of the project, ending the current practice of realty firms launching projects without land ownership or mandatory approvals.

The builders will have to submit a bank guarantee of 5% of the total cost of the project, which will be encashed by the regulator in the event of the builder not completing the project in time or violating any other condition agreed upon at the beginning.

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Buying home to get safer, new real estate bill mooted

Special drives for property tax recovery-NMC

Special drives for property tax recovery after Diwali

Nagpur Municipal Corporation (NMC) has directed all the zone officials to prepare a list of property tax defaulters.This year property tax collection is 2 crore more than last year. Till date (September 16) the property tax department has recovered only Rs 17 crore property tax.

The Nagpur Municipal Corporation will embark on a special drive to recover property tax from over five lakh defaulting after the festival season.The zone officials will prepare a list of property tax defaulters.The property owners who have unpaid taxes of Rs 5,000 and more will be issued notices by the respective zonal offices.As per the new policy, property tax is being calculated on the basis of rental value or the annual letting value of the property. Thus the revaluation exercise essentially involves the revision of standard rent of properties in a particular area.

once the elections and the festival season ends we will start special drives to complete the target.

Of the 340 approved posts, only 193 employees have been deputed to the property tax department to complete the target given by NMC. Even among these, over 100 employees are presently engaged in the state assembly election duties, which has forced NMC to slow down the recovery work. However, once the elections and the festival season ends NMC will start special drives to complete the target.In 2009-10 too the department expects to cross the Rs 100 crore mark.

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Special NMC drive

Property transaction in post office

From next month, property buyers can pay their registration fee and stamp duty in near by post office. Karnataka Stamps and Registration Department is considering to launch the facility in post office and public sector banks across the state for property registrations. On a pilot basis, the department is planning to launch the facility in 75 post offices in Bangalore by next month.

A public sector undertaking, Stock Holding Corporation of India Limited (SHCIL) would be in charge of keeping a centralized record of all e-stamping documents. The department in association with SHCIL, is implementing e-stamping to put an end to illegal benami registrations and for plugging revenue leaks.

The postal department wants to charge Rs 10 as fee from for e-stamping denominations up to Rs 100, and Rs 15 for e-stamping denominations above Rs 100. The post offices have expressed interest and are waiting for a final approval.

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Banks refuse to process loan applications without Khata

Banks and financial institutes refuse to process home loan for borrowers without Khata certificate. The government has stopped issuing new khatas. Even changing the khata from seller to buyer is not being done, citing administrative issues.

After a long impasse over registration of properties, which has now been solved, the vexed khata issue is hindering the home loan process and has left property buyers in the lurch. To facilitate sale of properties in former urban local bodies around the city, the government on August 14 suggested alternative documents for registration — copies of khata and assessment extracts issued by CMCs, TMC or village panchayats under whose jurisdiction the buildings/land belonged.

According to the inspector general of registration and commissioner of stamps, K R Niranjan, the government communication has been sent to all sub-registrars but not the banks.

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Buyers in new areas not getting home loans