NEW DELHI: The commerce ministry has moved a proposal to
remove the condition of the minimum lock-in period for repatriation
of FDI in construction industry. According to a note circulated among
pertinent ministries for their comments, the move is aimed at further
easing FDI flow in construction of housing projects, hotels and townships etc.
The proposal is to remove the clause that bars such investors from
repatriating their investments before three years from completion
of minimum capitalisation of a project. The government had put
the lock-in clause while allowing 100% FDI in the sector in 2005.
The Press Note 2, which had notified permission for 100% FDI,
however, said an investor could be permitted to exit earlier with
prior approval of the FIPB.
The commerce ministry’s proposal is expected to
spur overseas funds flow into real estate and infrastructure
projects. Both these areas are experiencing funds crunch
and many housing projects have either stalled or failed to
take off as investors closed their purse-strings in the wake
of the slowdown.
A revival in this sector is expected to have a multiplier
effect on the economy and create jobs for not only
unskilled and skilled workers such as labourers and
artisans but also for engineers and architects etc.
who are involved in developing real estate projects.
A resumption of construction development is also
expected to boost manufacturing sector by raising
demand for such items as steel and cement.
At present, 100% FDI is allowed in the sector under
the automatic route in townships, housing, built-up
infrastructure and construction-development projects
that include housing and commercial premises, hotels,
resorts, hospitals, educational institutions, recreational facilities,
city and regional level infrastructure.
The FDI permision is subject to a minimum capitalization of $10 million
for wholly-owned subsidiaries and $5 million for joint ventures with
Indian partners. The foreign investor has to bring in the money
within six months of setting shop here. Besides, norms also
stipulate that at least half of the project must be developed
within a period of five years from the date of obtaining all
statutory clearances. An investor is also not allowed to
sell undeveloped plots.
Projects with FDI also need to adhere to some other
conditions. For serviced housing plots, the project has
to be spread over a minimum land area of 10 hectares.
Saturday, November 28, 2009
72,906 new flats in city by 2011
Construction is on in full swing across the city
and 72,906 new homes will be up for sale in the
next two years.
Reason: Many developers have restarted their
projects which were stalled due to the slowdown,
while others have taken up new ones.
This was revealed by a research study
conducted by leading real estate consultancy firm Knight Frank.
The study also revealed that most projects are 800-2,000 sq ft
two- and three-bedroom, hall-kitchen (BHK) flats.
Pranay Vakil, chairman of Knight Frank India, said:
“Developers have re-sized their flats to smaller units
to suit the demands of the buyers.” A two-BHK flat,
which was earlier sized at 1,100 sq ft, is now re-sized at 800 sq ft.
The report also found that ready available flats command
a premium amount compared to under construction ones.
“There is very less supply of ready flats and hence the
demand,” Vakil explained.
“People want bigger houses and Powai offers excellent
connectivity,” said Sukhraj Nahar, chairman of the
Nahar Group that is constructing about 2,000flats in Powai.
The study also revealed that flats are more expensive in
south Mumbai as there are fewer constructions in the
area (4,732 flats). The demand is further fuelled by
non-resident Indians and high- net worth individuals seeking to buy flats here.
Western suburbs are witnessing the highest number of
constructions — 26,611 flats — in the city with higher-income
buyers and the middle-class eyeing constructions in areas such
as Bandra, Khar, Santacruz and Juhu.
Though flats in areas like Goregaon, Malad and Mira
Road are relatively low-priced, they too are popular due to connectivity.
Those seeking to buy even cheaper flats can opt for the 4,950 houses
coming up in the extended suburbs of Virar and Vasai.
Central suburbs like Sion, Wadala, Chembur and Mulund
too are witnessing heavy construction activity — 9,408 flats.
While Thane will get 13,820 new flats in two years,
Navi Mumbai will have 13,385 new houses.
and 72,906 new homes will be up for sale in the
next two years.
Reason: Many developers have restarted their
projects which were stalled due to the slowdown,
while others have taken up new ones.
This was revealed by a research study
conducted by leading real estate consultancy firm Knight Frank.
The study also revealed that most projects are 800-2,000 sq ft
two- and three-bedroom, hall-kitchen (BHK) flats.
Pranay Vakil, chairman of Knight Frank India, said:
“Developers have re-sized their flats to smaller units
to suit the demands of the buyers.” A two-BHK flat,
which was earlier sized at 1,100 sq ft, is now re-sized at 800 sq ft.
The report also found that ready available flats command
a premium amount compared to under construction ones.
“There is very less supply of ready flats and hence the
demand,” Vakil explained.
“People want bigger houses and Powai offers excellent
connectivity,” said Sukhraj Nahar, chairman of the
Nahar Group that is constructing about 2,000flats in Powai.
The study also revealed that flats are more expensive in
south Mumbai as there are fewer constructions in the
area (4,732 flats). The demand is further fuelled by
non-resident Indians and high- net worth individuals seeking to buy flats here.
Western suburbs are witnessing the highest number of
constructions — 26,611 flats — in the city with higher-income
buyers and the middle-class eyeing constructions in areas such
as Bandra, Khar, Santacruz and Juhu.
Though flats in areas like Goregaon, Malad and Mira
Road are relatively low-priced, they too are popular due to connectivity.
Those seeking to buy even cheaper flats can opt for the 4,950 houses
coming up in the extended suburbs of Virar and Vasai.
Central suburbs like Sion, Wadala, Chembur and Mulund
too are witnessing heavy construction activity — 9,408 flats.
While Thane will get 13,820 new flats in two years,
Navi Mumbai will have 13,385 new houses.
Ray White eyes expansion in India
Australia-based property group Ray White has
formed a partnership with Gulshan Properties,
a South Delhi-based real estate agent, to expand
its business in India. Gulshan Group will provide
franchise opportunities and the first of these are to
be appointed in Goa under the supervision of
Gulshan Properties, according to a top Ray White official.
“The Ray White group has expressed an interest in
having a partnership in Delhi and the Gulshan Group
provides a perfect platform for the growth of the Ray
White business model throughout India,” said Brian
White, chairman, Ray White.
“Gulshan Properties will align its New Delhi
office with the Ray White Group with plans
for further expansion throughout India,” White further added.
Established in 1902, Ray White, a name
synonymous with
the real estate industry and related services,
has evolved into Australasia’s most successful
real estate business, now approaching 1,000 individual
offices in Australia, New Zealand and South East Asia.
Last year, the company has sold over $25 billion worth of property.
formed a partnership with Gulshan Properties,
a South Delhi-based real estate agent, to expand
its business in India. Gulshan Group will provide
franchise opportunities and the first of these are to
be appointed in Goa under the supervision of
Gulshan Properties, according to a top Ray White official.
“The Ray White group has expressed an interest in
having a partnership in Delhi and the Gulshan Group
provides a perfect platform for the growth of the Ray
White business model throughout India,” said Brian
White, chairman, Ray White.
“Gulshan Properties will align its New Delhi
office with the Ray White Group with plans
for further expansion throughout India,” White further added.
Established in 1902, Ray White, a name
synonymous with
the real estate industry and related services,
has evolved into Australasia’s most successful
real estate business, now approaching 1,000 individual
offices in Australia, New Zealand and South East Asia.
Last year, the company has sold over $25 billion worth of property.
Premier Inn makes its debut in India
Premier Inn, the UK’s largest budget hotel chain,
has launched its first hotel in India and plans to open a further
nine properties in the country during the next five years.
The company is expanding into India, where there are
limited budget hotel brands, to capitalise on the country’s
developing business traveller market. Bangalore is the
destination of the Premier Inn’s first Indian hotel, which
has 105 bedrooms, a multi-national restaurant, bar,
gym and conference room.
“India represents one of the fastest growing economies in
the world today and we are confident that Premier Inn
will be successful in India,” said Patrick Dempsey,
managing director of Premier Inn UK.
Large Indian corporations, multi-national companies,
small and medium enterprises and small privately-owned
firms are all being targeted by Premier Inn in India.
“There is a huge and rapidly growing junior and middle
management population that represents an excellent
opportunity for us,” said Aly Shariff, Premier Inn India
managing director. “Following Bangalore, there will be
properties in Delhi in 2010 and Pune in 2011.”
Premier Inn’s move into India comes 18 months
after the company launched its first international hotel in
Dubai. There are now three Premier Inns in the
country,
with a third property opening next month.
Premier Inn, which has 580 budget hotels,
with more than 40,000 rooms, throughout the
UK and Ireland, is currently offering
rooms in the UK for £29.
has launched its first hotel in India and plans to open a further
nine properties in the country during the next five years.
The company is expanding into India, where there are
limited budget hotel brands, to capitalise on the country’s
developing business traveller market. Bangalore is the
destination of the Premier Inn’s first Indian hotel, which
has 105 bedrooms, a multi-national restaurant, bar,
gym and conference room.
“India represents one of the fastest growing economies in
the world today and we are confident that Premier Inn
will be successful in India,” said Patrick Dempsey,
managing director of Premier Inn UK.
Large Indian corporations, multi-national companies,
small and medium enterprises and small privately-owned
firms are all being targeted by Premier Inn in India.
“There is a huge and rapidly growing junior and middle
management population that represents an excellent
opportunity for us,” said Aly Shariff, Premier Inn India
managing director. “Following Bangalore, there will be
properties in Delhi in 2010 and Pune in 2011.”
Premier Inn’s move into India comes 18 months
after the company launched its first international hotel in
Dubai. There are now three Premier Inns in the
country,
with a third property opening next month.
Premier Inn, which has 580 budget hotels,
with more than 40,000 rooms, throughout the
UK and Ireland, is currently offering
rooms in the UK for £29.
Lodha Developers honoured as the best developer in hi-end residential properties
Lodha Developers Ltd, Mumbai’s premium real
estate developer, has been honoured with “Best Developer
Involved in High-End Residential Properties” across India,
by constructionsourceindia.com, the website which is
unique in offering a holistic platform for the construction
and building material industry.
“I feel greatly privileged to receive this honour,” said
Abhisheck Lodha, Managing Director, Lodha Developers
Ltd, “as it is the recognition of the superior value being created
by us. The award also acknowledges our premium stake in
hi-end residential properties. This would reinforce our team’s
commitment to deliver nothing but the best,” he said.
Constructionsourceindia.com had honoured architects
and builders for their contribution to various aspects of
urban development, so as to provide a strong platform
for the fraternity of architects, interior designers, builders
and developers, and give them the opportunity to interact
with the premium brands of various specific segments of
the building material industry.
About Lodha Group
Established in 1980, Lodha Group is Mumbai’s premier
real estate developer providing comprehensive residential
and office space solutions across real estate categories and
diverse consumer segments – from luxury garden residences
in South Mumbai to large integrated townships in the suburbs,
from thoughtfully designed office environments to private villa
retreats. Headquartered in Mumbai, the group is currently
developing in excess of 25 million sq. ft. of prime real estate
spread over 27 projects. The group has recently expanded
into Hyderabad with the launch of Lodha Bellezza,
a super-luxury residential project.
The group continuously strives to exceed the
expectations of customers through innovative,
world-class solutions leading to several innovative
firsts to its credit – be it Lodha Bellissimo – Mumbai’s
first “By invitation only” project which is the only Indian
residential project amongst the top 1000 landscapes in
the world, Lodha Luxuria – Mumbai’s first ‘Fully Automated
Township’ or Lodha Aqua – Mumbai’s first water inspired
township. Lodha Group has created an entirely new residential
category – mid-income luxury. A new sub-brand CASA by
Lodha was created for this category, with essential quality
and luxury endorsement, providing ‘right sized’ and ‘right priced’
products in Mumbai’s suburban locations.
Lodha Group has extended this philosophy to office
spaces as well, where it was one of the first in India to
introduce the concept of branded office spaces through
its unique offerings: Lodha Excelus – Signature offices
catering to front office requirements of large corporates,
iThink by Lodha – the ultimate IT destination for large back
office needs and the recently launched, Lodha Supremus –
Signature boutique offices, targeted specifically at mid-sized businesses.
With a focus on building a world class organization, Lodha Group has
attracted top talent from premier institutions and B-school campuses,
hired professionals from benchmark industries and built a proficient
management team.
According to the JP Morgan Property Report 2008,
Lodha Group was ranked second in the list of “most
sought after for PE investment in the realty sector.
Also selected as one of India’s top 10 builders by
Construction World, the group has consistently
delivered luxury lifestyles through innovative solutions,
not just by building structures but by building better lives.
estate developer, has been honoured with “Best Developer
Involved in High-End Residential Properties” across India,
by constructionsourceindia.com, the website which is
unique in offering a holistic platform for the construction
and building material industry.
“I feel greatly privileged to receive this honour,” said
Abhisheck Lodha, Managing Director, Lodha Developers
Ltd, “as it is the recognition of the superior value being created
by us. The award also acknowledges our premium stake in
hi-end residential properties. This would reinforce our team’s
commitment to deliver nothing but the best,” he said.
Constructionsourceindia.com had honoured architects
and builders for their contribution to various aspects of
urban development, so as to provide a strong platform
for the fraternity of architects, interior designers, builders
and developers, and give them the opportunity to interact
with the premium brands of various specific segments of
the building material industry.
About Lodha Group
Established in 1980, Lodha Group is Mumbai’s premier
real estate developer providing comprehensive residential
and office space solutions across real estate categories and
diverse consumer segments – from luxury garden residences
in South Mumbai to large integrated townships in the suburbs,
from thoughtfully designed office environments to private villa
retreats. Headquartered in Mumbai, the group is currently
developing in excess of 25 million sq. ft. of prime real estate
spread over 27 projects. The group has recently expanded
into Hyderabad with the launch of Lodha Bellezza,
a super-luxury residential project.
The group continuously strives to exceed the
expectations of customers through innovative,
world-class solutions leading to several innovative
firsts to its credit – be it Lodha Bellissimo – Mumbai’s
first “By invitation only” project which is the only Indian
residential project amongst the top 1000 landscapes in
the world, Lodha Luxuria – Mumbai’s first ‘Fully Automated
Township’ or Lodha Aqua – Mumbai’s first water inspired
township. Lodha Group has created an entirely new residential
category – mid-income luxury. A new sub-brand CASA by
Lodha was created for this category, with essential quality
and luxury endorsement, providing ‘right sized’ and ‘right priced’
products in Mumbai’s suburban locations.
Lodha Group has extended this philosophy to office
spaces as well, where it was one of the first in India to
introduce the concept of branded office spaces through
its unique offerings: Lodha Excelus – Signature offices
catering to front office requirements of large corporates,
iThink by Lodha – the ultimate IT destination for large back
office needs and the recently launched, Lodha Supremus –
Signature boutique offices, targeted specifically at mid-sized businesses.
With a focus on building a world class organization, Lodha Group has
attracted top talent from premier institutions and B-school campuses,
hired professionals from benchmark industries and built a proficient
management team.
According to the JP Morgan Property Report 2008,
Lodha Group was ranked second in the list of “most
sought after for PE investment in the realty sector.
Also selected as one of India’s top 10 builders by
Construction World, the group has consistently
delivered luxury lifestyles through innovative solutions,
not just by building structures but by building better lives.
Thursday, November 26, 2009
Indian Real Estate, Property Boom
Malwa, that part of Punjab, never a favourite with real estate
investor or developer, is now witness to a property boom, the
likes of which has sent property prices in the region boomeranging
skywards, as realtors and buyers alike, swarm into the region like
a cloud of greedy locusts with damage on their minds.
Property prices might have been climbing higher since a year or two,
yet the cost of agricultural land has experienced a sudden escalation
of 200 to 25%, all within the span of the last six months.
A year back, the average price of land in Bathinda, Faridkot,
Ferozepur, Muktsar and Moga used to be between Rs. 2 to 3-lakhs,
today it is hovering around the Rs. 8-lakh mark, and thereabouts.
According to property dealers, the state wide boom across Apna Punjab
is responsible for fuelling the price hike in the Malwa region, along
with other factors responsible for boosting the demand for land.
Economist of note, Dr. Sucha Singh Gill believes the unprecedented
hike is due to low interest rates on bank loans, the need to whitewash
black money, and improving trade relations between Pakistan and India.
As bank interest rates on loans are lower than the national rate of
inflation, depositors are not interested in accruing bank savings,
preferring instead to invest in real estate. As well, property
investment seems to be an ideal way to get rid of all that hidden
black money. Then too, increasing trade with Pakistan has led a number
of big traders to purchase land along the GT Road, Gill informs us.
As farmers along the Grand Trunk road and the cities peripheral areas
sell their land for upwards of Rs. 2-crores an acre, the majority of them
prefer to re-purchase agricultural land, as they rush off to the Malwa
region with its still cheap land, much more so than in other parts of
Apna Punjab. This has led to land prices climbing steadily in the area,
with many buyers mostly farmers from Amritsar, Jullunder, Ludhiana
and Chandigarh.
Also, the development of planned land colonies, a considerable rarity
in this area is another of the reasons, why land prices are beginning to
soar here. Not only sellers but banks are also benefiting from this new
phenomenon, as it has led to an excellent recovery of loans from farmers,
since before selling land, they have to clear all encumbrances on it.
It does make one hope rising land prices will help put an end to the
number of farmers committing suicide in Punjab. A welcome solution, yet,
it leaves another problem, that of diminishing agricultural land.
If colonisers and developers continue to snap up land meant for growing
food crops and construct luxury homes, apartments, second homes, third homes,
investment homes, will there be any land left to grow
food for India's burgeoning masses?
A prospect that sends shivers down the spine bringing to mind the days when the
British denuded India of its flora and fauna by shooting hundreds of tigers a
day, amongst other big game hunting, and cutting down its rich forests of
teak, mahogany, rosewood, sal, etc.
One cannot blame the debt ridden poor farmer whom the government or the
people are doing little to help, but one can put a stop to the avaricious
developers and colonisers as they rapaciously buy up agricultural land
for the rich, who have more homes to spare than needed. For of course,
the cost of a bungalow or flat in these planned new colonies is beyond
the reach of the common man. Despite, the huge supply of houses, there
is No House for Mr. Biswas!
investor or developer, is now witness to a property boom, the
likes of which has sent property prices in the region boomeranging
skywards, as realtors and buyers alike, swarm into the region like
a cloud of greedy locusts with damage on their minds.
Property prices might have been climbing higher since a year or two,
yet the cost of agricultural land has experienced a sudden escalation
of 200 to 25%, all within the span of the last six months.
A year back, the average price of land in Bathinda, Faridkot,
Ferozepur, Muktsar and Moga used to be between Rs. 2 to 3-lakhs,
today it is hovering around the Rs. 8-lakh mark, and thereabouts.
According to property dealers, the state wide boom across Apna Punjab
is responsible for fuelling the price hike in the Malwa region, along
with other factors responsible for boosting the demand for land.
Economist of note, Dr. Sucha Singh Gill believes the unprecedented
hike is due to low interest rates on bank loans, the need to whitewash
black money, and improving trade relations between Pakistan and India.
As bank interest rates on loans are lower than the national rate of
inflation, depositors are not interested in accruing bank savings,
preferring instead to invest in real estate. As well, property
investment seems to be an ideal way to get rid of all that hidden
black money. Then too, increasing trade with Pakistan has led a number
of big traders to purchase land along the GT Road, Gill informs us.
As farmers along the Grand Trunk road and the cities peripheral areas
sell their land for upwards of Rs. 2-crores an acre, the majority of them
prefer to re-purchase agricultural land, as they rush off to the Malwa
region with its still cheap land, much more so than in other parts of
Apna Punjab. This has led to land prices climbing steadily in the area,
with many buyers mostly farmers from Amritsar, Jullunder, Ludhiana
and Chandigarh.
Also, the development of planned land colonies, a considerable rarity
in this area is another of the reasons, why land prices are beginning to
soar here. Not only sellers but banks are also benefiting from this new
phenomenon, as it has led to an excellent recovery of loans from farmers,
since before selling land, they have to clear all encumbrances on it.
It does make one hope rising land prices will help put an end to the
number of farmers committing suicide in Punjab. A welcome solution, yet,
it leaves another problem, that of diminishing agricultural land.
If colonisers and developers continue to snap up land meant for growing
food crops and construct luxury homes, apartments, second homes, third homes,
investment homes, will there be any land left to grow
food for India's burgeoning masses?
A prospect that sends shivers down the spine bringing to mind the days when the
British denuded India of its flora and fauna by shooting hundreds of tigers a
day, amongst other big game hunting, and cutting down its rich forests of
teak, mahogany, rosewood, sal, etc.
One cannot blame the debt ridden poor farmer whom the government or the
people are doing little to help, but one can put a stop to the avaricious
developers and colonisers as they rapaciously buy up agricultural land
for the rich, who have more homes to spare than needed. For of course,
the cost of a bungalow or flat in these planned new colonies is beyond
the reach of the common man. Despite, the huge supply of houses, there
is No House for Mr. Biswas!
MagicBricks.com tops property portals on unique visitors: comScore
Tuesday, November 24, 2009
MagicBricks.com, India’s No.1 Property Portal from the Times Group,
has consolidated its leadership position in the online real
estate space by recording the maximum number of Unique
Visitors to its website, as adjudged by comScore, the global
leader in measuring the digital world and preferred source
of digital marketing intelligence.
In its effort to provide the best response to its customers,
In its effort to provide the best response to its customers,
MagicBricks.com has consistently improved on attracting
unique visitors to its website over the last 3 months.
As per comScore, MagicBricks.com attracts 9% more
unique visitors compared to its nearest competitor and
is way ahead of the website that has slipped to third position
with 125% more unique visitors than them.
Unique visitors is a statistic describing traffic to a Web site,
Unique visitors is a statistic describing traffic to a Web site,
counting each visitor only once in the time-frame of the report.
This statistic is relevant as a measure of a site's true audience size.
This is one of the most important metrics for a property portal, given
that property is a once in a lifetime purchase for most end users.
Commenting on this impartial, third party report, R. Sundar, CEO,
Commenting on this impartial, third party report, R. Sundar, CEO,
Times Business Solutions Limited stated, “Within three months of
its launch, MagicBricks.com achieved the status of being the No.1
property portal in India. With its revolutionary next-gen services
customized specifically to address the real estate industry it has
consolidated its position as the leader in the sector,
as endorsed by comScore.”
“Our innovations are geared towards delivering assured
“Our innovations are geared towards delivering assured
responses to all our users’ property needs and providing
them with exposure and leads across India and globally.”
added Ramathreya Krishnamurthi, Business Head, MagicBricks.com,
“Our ability to attract and magnetize property seekers is unequalled,
making MagicBricks.com the port-of-first call, for anyone wanting to buy,
sell or rent property in India. We are very pleased that comScore
has once again validated MagicBricks.com’s leadership position
in the property space.”
In addition, overall response from MagicBricks.com has
In addition, overall response from MagicBricks.com has
gone up by 50 % and MagicBricks.com has retained
leadership position in other important metrics such as
Total Page Views (56% more than nearest competitor)
and Time spent by customers (90% more than nearest competitor) on the site.
MagicBricks.com, also reaches out to 9% more users than
MagicBricks.com, also reaches out to 9% more users than
its closest competitor and 125% more people than the current No.3.
These metrics are historic in nature, and are a reflection
These metrics are historic in nature, and are a reflection
of the popularity, user-friendliness, transparency and
depth that MagicBricks.com has brought to the property space.
MagicBricks.com offers pan–India coverage of over 800,000 listings,
MagicBricks.com offers pan–India coverage of over 800,000 listings,
showcasing the Indian real-estate market. MagicBricks.com currently
records over 10 million page-views per month, and comes packed with
a host of tools, never witnessed before by Real-Estate Industry including
Location Map Service, Email Alerts, Exclusive developer Micro-Sites,
Virtual Walkthroughs, Rent Zone, etc.
MagicBricks.com observed that the majority of people,
MagicBricks.com observed that the majority of people,
in this business, did not access the internet on a daily basis,
but conducted their business over mobile phones.
Thus the most valued services pioneered by MagicBricks.com,
which further advanced its leadership, were the Mobile &
Internet convergence services, with the launch of ‘MagicSMS’,
‘Click to Call’, ‘Property Leads on SMS’ and ‘MagicBricks Mobile’,.
Through the ‘Magic SMS’ service, users can send
Through the ‘Magic SMS’ service, users can send
free SMS through the website to sellers for properties
and buyers for requirements that interest them and with
“Click to Call” users can call sellers for free through the site
. MagicBricks.com also provides developers and real estate
agents - ‘Property Leads on SMS’ – a premium service that
offers instant SMS updates of new properties listed as per
the subscriber’s requirements.
Not one to rest on its achievements, MagicBricks.com
Not one to rest on its achievements, MagicBricks.com
launched, India’s first Mobile Property Portal – ‘MagicBricks Mobile’.
This application enables users to search for properties by type,
budget and city on their GPRS enabled cell-phone.
Users can instantly contact the concerned person by
sms or phone call and the application stores the history
of the contacts they have made in past sessions, for easy recall and follow-up.
Brix Research is MagicBricks.com’s Research and
Brix Research is MagicBricks.com’s Research and
Analysis wing that constantly monitors the property
and real-estate market in the country, providing
insights, impact assessment reports, official forms,
legal & taxation expertise and realty rates to MagicBricks.com users.
With such offerings, it is evident MagicBricks.com
With such offerings, it is evident MagicBricks.com
retains its leadership position with over 6 lakh
registered users, including over 65,000 real estate
agents and more than 13,000 builders having their presence on the site.
MagicBricks.com also conducts Property Fairs,
MagicBricks.com also conducts Property Fairs,
branded as "MagicBricks.com Property Bazaars",
which serve as a one-stop-shop for property-seekers
to interact face-to-face with developers, agents and
housing financing institutions, all at a single venue.
MagicBricks.com
Property Fairs are conducted in 4 different formats, Locality-Centric
(e.g. Property Fair in Bangalore for properties in that city), Income-Centric
(e.g. Luxury Properties for HNIs – by invitation only),
Regional Showcase (e.g. Goa properties fair in Delhi), and International Fairs
(e.g. Indian Properties showcased to NRIs and PIOs in Singapore, Dubai, Kuwait & London).
So far, MagicBricks.com has conducted over 70 domestic and 10 international property fairs.
Monday, November 23, 2009
Sun Network clinched proerty deal In Bangalore
DLF, Embassy & Prestige have divested land
and property assets in the city.
After a long slumber, Bangalore’s real estate market
is ticking with big-bracket property deals. Corporates
appear to be leading this trend of buying land and
property assets from developers, who may be looking
at such divestments to generate more liquidity into the system.
At least three deals in the Bangalore landscape have been
struck or are in advanced stages of closure.
Realty major DLF is understood to have sold a 15-acre patch
of land in Whitefield, one of Bangalore’s IT suburb in the east,
to NetApp India, the arm of US-based data storage equipment
maker NetApp Inc, in a deal valued at Rs 120 crore, said a
source familiar with the transaction.
Prestige Group has, through an SPV, sold 60,000 sq feet prime
property on Brunton Road in downtown Bangalore to Sun
Network family for a consideration of Rs 60-crore deal.
This transaction, which was in the making for some months,
was clinched in recent weeks, with the buyers expected to use
the property as a corporate office for Sun Network.
And, Embassy Group is close to divesting a prime patch just
off Kasturba Road, in close proximity to UB City and Bangalore’s
lungs-Cubbon Park, in favour of HDFC Realty Fund for a sum
of Rs 60-70 crore. HDFC Realty Fund may be roping in a
local developer for constructing a high-rise residential
project of approximately 1 lakh sq feet, on the 36,000 sq ft property,
overlooking the city landmarks. Earlier, Embassy Group,
which has developed some of Bangalore’s landmark office
buildings, had similar plans.
While Prestige Group chairman Irfan Razak confirmed the deal, mails sent
to NetApp India president Vikram Shah and spokespersons of DLF
and HDFC elicited no response at the time of posting the story.
NetApp India may be looking at a huge office space development in
Whitefield. In earlier media reports in 2008, NetApp had said, it
would hike its head count in India to 2,000 (from 750 at that time)
and would look at investing up to $300 million in the country.
A realty consultant, requesting anonymity, said, that there is a
heightened trend towards buying assets by corporates.
“There is lot of interest. In recent weeks, I have been swamped
with calls,” says L J Hooker chief operating officer Chaitanya
Manohar. But, it is still early days yet and till deal closures
take place, we can only call it increase in interest, says another tracker.
A few days back, it is reported on Oracle’s talks to
buy one million sqft office space in one of the
upcoming projects of Brigade Enterprises for Rs 500-550 crore.
This deal, if it goes through, will be one of the biggest office
space acquisitions in India recently. Industry trackers said these
transactions signal an upturn in the market sentiments,
with realty firms like Brigade, Embassy and Prestige
cashing in on the early signs of revival.
and property assets in the city.
After a long slumber, Bangalore’s real estate market
is ticking with big-bracket property deals. Corporates
appear to be leading this trend of buying land and
property assets from developers, who may be looking
at such divestments to generate more liquidity into the system.
At least three deals in the Bangalore landscape have been
struck or are in advanced stages of closure.
Realty major DLF is understood to have sold a 15-acre patch
of land in Whitefield, one of Bangalore’s IT suburb in the east,
to NetApp India, the arm of US-based data storage equipment
maker NetApp Inc, in a deal valued at Rs 120 crore, said a
source familiar with the transaction.
Prestige Group has, through an SPV, sold 60,000 sq feet prime
property on Brunton Road in downtown Bangalore to Sun
Network family for a consideration of Rs 60-crore deal.
This transaction, which was in the making for some months,
was clinched in recent weeks, with the buyers expected to use
the property as a corporate office for Sun Network.
And, Embassy Group is close to divesting a prime patch just
off Kasturba Road, in close proximity to UB City and Bangalore’s
lungs-Cubbon Park, in favour of HDFC Realty Fund for a sum
of Rs 60-70 crore. HDFC Realty Fund may be roping in a
local developer for constructing a high-rise residential
project of approximately 1 lakh sq feet, on the 36,000 sq ft property,
overlooking the city landmarks. Earlier, Embassy Group,
which has developed some of Bangalore’s landmark office
buildings, had similar plans.
While Prestige Group chairman Irfan Razak confirmed the deal, mails sent
to NetApp India president Vikram Shah and spokespersons of DLF
and HDFC elicited no response at the time of posting the story.
NetApp India may be looking at a huge office space development in
Whitefield. In earlier media reports in 2008, NetApp had said, it
would hike its head count in India to 2,000 (from 750 at that time)
and would look at investing up to $300 million in the country.
A realty consultant, requesting anonymity, said, that there is a
heightened trend towards buying assets by corporates.
“There is lot of interest. In recent weeks, I have been swamped
with calls,” says L J Hooker chief operating officer Chaitanya
Manohar. But, it is still early days yet and till deal closures
take place, we can only call it increase in interest, says another tracker.
A few days back, it is reported on Oracle’s talks to
buy one million sqft office space in one of the
upcoming projects of Brigade Enterprises for Rs 500-550 crore.
This deal, if it goes through, will be one of the biggest office
space acquisitions in India recently. Industry trackers said these
transactions signal an upturn in the market sentiments,
with realty firms like Brigade, Embassy and Prestige
cashing in on the early signs of revival.
DLF begins to sell land parcels
DLF Ltd, India’s largest realtor by market capitalisation, has embarked
on a land-selling spree. The company recently sold 500 plots of 200-400 yards
in Indore, Madhya Pradesh, mopping up around Rs 110 crore at
an average Rs 800 per square feet.
More sales are being consummated, some in south India,
which will garner slightly larger amounts than Indore, said
sources. Rajiv Talwar, group executive director at DLF,
confirmed the development but said he cannot disclose price detals.
“The valuations were reasonable. We are also looking to sell some
hotel plots etc,” he said. After DLF’s exit from the Bidadi project in
Bangalore and Dankuni in West Bengal, its landbank fell to 425 million
square feet compared with 751 million square feet.
It added another land parcel of 350 acre through bidding at
Haryana State Industrial Infrastructure Development
Corporation, Gurgaon.
At present it has a landbank of 432 million square feet.
In the September quarter, DLF had sold two land parcels in
Mumbai, which was bought by serial entrepreneur Sivasankaran.
Rising prices have also helped. Samir Jasuja, chief executive of
PropEquity, a real estate data and analytics provider said project
launches from April 2008 to April 2009 have seen price escalations,
especially since the absorption in metros has been good.
“The prices in some cases have even gone up by 5-15%, and
I expect the land prices to remain stable or slightly go up now
on,” Jasuja said. DLF had earlier said that it is looking to sell
land assets in 2009 to raise Rs 2,000 crore in a bid to retire debt.
The plots included hotel land, residential plots and commercial land.
DLF has plans to monetise its assets and was able to bring in cash
worth Rs 550 crore through asset sale in the last quarter which takes
the total amount to Rs 1,064 crore. The company has a net
debt of Rs 12,135 crore it expects to raise another Rs 4,436 crore
through asset sale.
The company is also looking to sell its windmill business for a
valuation of Rs 1,100-1,200 crore for which it is unable to find
a buyer, said sources close to the development.
on a land-selling spree. The company recently sold 500 plots of 200-400 yards
in Indore, Madhya Pradesh, mopping up around Rs 110 crore at
an average Rs 800 per square feet.
More sales are being consummated, some in south India,
which will garner slightly larger amounts than Indore, said
sources. Rajiv Talwar, group executive director at DLF,
confirmed the development but said he cannot disclose price detals.
“The valuations were reasonable. We are also looking to sell some
hotel plots etc,” he said. After DLF’s exit from the Bidadi project in
Bangalore and Dankuni in West Bengal, its landbank fell to 425 million
square feet compared with 751 million square feet.
It added another land parcel of 350 acre through bidding at
Haryana State Industrial Infrastructure Development
Corporation, Gurgaon.
At present it has a landbank of 432 million square feet.
In the September quarter, DLF had sold two land parcels in
Mumbai, which was bought by serial entrepreneur Sivasankaran.
Rising prices have also helped. Samir Jasuja, chief executive of
PropEquity, a real estate data and analytics provider said project
launches from April 2008 to April 2009 have seen price escalations,
especially since the absorption in metros has been good.
“The prices in some cases have even gone up by 5-15%, and
I expect the land prices to remain stable or slightly go up now
on,” Jasuja said. DLF had earlier said that it is looking to sell
land assets in 2009 to raise Rs 2,000 crore in a bid to retire debt.
The plots included hotel land, residential plots and commercial land.
DLF has plans to monetise its assets and was able to bring in cash
worth Rs 550 crore through asset sale in the last quarter which takes
the total amount to Rs 1,064 crore. The company has a net
debt of Rs 12,135 crore it expects to raise another Rs 4,436 crore
through asset sale.
The company is also looking to sell its windmill business for a
valuation of Rs 1,100-1,200 crore for which it is unable to find
a buyer, said sources close to the development.
REVERSE MORTGAGE- A STEP FORWARD
In very simple words, mortgage is a transaction where
a mortgagor takes a loan from a mortgagee, against a
security. Thus, we can say that a mortgage is a transfer
by way of security.
Unlike other transfers, such as sale,
lease, exchange or gift, a mortgage has no independent
existence of its own. There can be no mortgage without a debt.
The security provided is an immovable property.
A property can be mortgaged in any of the following ways:-
1. Simple Mortgage.
2. Mortgage by Conditional Sale.
3. Usufructuary Mortgage.
4. Mortgage by Deposit of Title of Deeds.
5. English Mortgage.
6. Anomalous Mortgage (which is a combination
of any two of the above).
1. Simple Mortgage: When the possession of the mortgaged
property is not transferred from mortgagor to the mortgagee.
If the mortgagor fails to repay the loan, the mortgagee has
the right to sell the property and recover the loan from the sale amount.
2. Conditional Sale: Here the mortgagor apparently sells the
property to the mortgagee subject to certain condition.
The condition may be either of the following:
a. On failure to repay the mortgage money before a certain date the sale
shall become absolute, or
b. On such repayment of mortgage money the sale shall become invalid, or
c. On such repayment the mortgagee shall retransfer the property.
3. Usufructuary Mortgage: In this type of mortgage, the possession
of the mortgaged property is transferred to the mortgagee.
He receives the income from the property, eg. rent, profit etc,
until the repayment of the loan. The title deeds remain with the owner.
4. Mortgage By Deposit Of Title Deeds: Here, the mortgagor
delivers the title document of the property to the mortgagee with
an intention to create a security thereon. This mortgage can be
entered into only in the towns of Chennai, Kolkota, Mumbai
or any other town, as notified by the State Government in the official gazette.
5. English Mortgage:
a. The mortgagor transfers the property absolutely to the mortgagee.
b. The mortgagor binds himself to repay the borrowed money
before a certain date.
c. Such transfer is subject to the condition that the mortgagee will
retransfer the property on repayment before the agreed date.
And reverse mortgage is a new addition to these types of mortgage.
Reverse mortgages are available in Ireland, United Kingdom,
Australia, the U.S. and other countries in various forms.
"Life loan" (Irish/UK term for a reverse mortgage) programs are
very similar to U.S. reverse mortgages. In India it’s relatively a
new kind of mortgage, though in other parts of world this type of
mortgage has been in use for quite a few decades now.
Reverse Mortgages
Reverse mortgages have been popular since the Roman Empire – literally
means - "loans until death". Reverse mortgages have effectively been
around since Roman times in the form of usufruct.
Usufruct is the legal right to use and derive profit or benefit from
property that belongs to another person, as long as the property is
not damaged. In many legal systems of property, buyers of property
may only purchase the usufruct of the property.
This form of mortgages is aptly named because the payment stream
is “reversed.” Instead of making monthly payments to a lender,
as with a regular mortgage, a lender makes payments to the borrower.
Unlike a regular mortgage, the borrower can continue to stay in his
mortgaged home during his entire life span without any fear of eviction
even after the tenure expires.
Reverse mortgages can be secured by
either urban or rural property. The amount of the loan available will
depend on the borrower’s age and the value of his equity.
It is essentially a loan given to senior citizens by converting the
equity in a house property into an income stream. The scheme
involves the borrowers (senior citizens) pledging their house property
to a lender (scheduled bank or HFC) in return for a lump sum or periodic
payments spread over the borrower’s lifetime.
The home owner is not
obliged to repay the loan during his lifetime.
On his death or leaving
the house permanently, the loan is repaid along with accumulated interest,
through sale of the house property. Any excess amount will be remitted
to the borrower or his heirs.
The lumpsum or periodic payments can be utilized by the borrower
as per his needs but not for speculative purposes. After the death of
the borrower and the borrower’s spouse, the housing company sells
the property to recover the amount paid out along with interest at a rate
similar to interest on housing loans.
If the owners of the house live for a
longer period, the sum that the heir will have to pay would be bigger as
the interest amount will go up. But, if he did not survive even to claim
the amount for entire period that was agreed for, the repayment amount
due to his heir will be smaller. Ownership title of the house making
it all the more popular among Indians who have a natural instinct for
own home.
However, on the flip side, traditional joint family system, stronger
bequeath motive and widespread undervaluation of real estate properties
involving unaccounted money, tax evasion and benami holdings can be
major deterrents for the scheme to take off.
How does the reverse mortgage scheme works?
Under a reverse mortgage, the real estate to be mortgaged has already
been purchased and any financial charges on title to it have been discharged.
The borrower is not expected to make periodic payments, or any payments,
until the loan comes due. For the lender, the value of the mortgaged property
is paramount; for the borrower, the loan is obtained to supplement income
or to enable purchases of assets other than the mortgaged property.
Eligibility limits on reverse mortgages are much less stringent that traditional
forward mortgages.
Outside of homeownership, the borrower must be at least sixty years of age.
Given the importance of the value of the reverse mortgage borrower’s property,
reverse mortgage lenders require that potential borrowers obtain an appraisal
of their property. The potential borrower must pay for this appraisal.
The cost of the appraisal should be borne in mind by borrowers;
it will form a non-interest charge that should be factored into determining
the overall cost of borrowing under a reverse mortgage.
Some reverse mortgage
lenders require borrowers to retain independent legal representation for
the reverse mortgage transaction. Others require borrowers to provide a certificate
of independent legal advice as one of the closing documents for the loan.
Reverse mortgage lenders insist on having the first mortgage
on title to the borrower’s property. If the borrower’s title is
encumbered by other financial charges, then the borrower will
be obliged to use part of the reverse mortgage proceeds, or
other funds, to pay out and discharge these other charges.
Difference between a Traditional Mortgage and Reverse Mortgage
Contrasting Reverse Mortgage From Traditional Mortgages
Item Reverse Mortgage Traditional Mortgage
Purpose of loan To release the equity in the home and use the proceeds
to live a more comfortable, stress-free, retirement To purchase or
refinance a home
Before loan closing, Substantial equity in the home No or little equity
in the home
At loan closing, Owe very little and have substantial equity Owe a lot,
and have little equityWhile the loan is outstanding,
You receive payments from the lender
Loan balance rises
Equity declines You make payments to the lender
Loan balance goes down
Equity grows
At the end Owe whatever amount was borrowed, plus accrued interest
Have much less, little, or no equity Owe nothing
Have Substantial Equity
Final analysis Rising Debt-Falling Equity Loan Program Falling
Debt-Rising Equity Loan Product
Taxation Issues
In the context of the introduction of the Reverse Mortgage scheme,
it was necessary to resolve the tax issues arising there-from.
The first issue was whether mortgage of property for obtaining a
loan under the reverse mortgage scheme is a transfer within the
meaning of the Income-tax Act, 1961 (“Income Tax Act”) thereby
giving rise to capital gains. Section 2(47) of the Income-tax Act provides
an inclusive definition of ‘transfer’. Further, ‘transfer’ within the meaning
of the Transfer of Property Act, 1882 (‘Transfer of Property Act”) includes
some types of mortgage. Therefore, a mortgage of property, in certain cases,
is a transfer within the meaning of section 2(47) of the Income-tax Act.
Consequently, any gain arising upon mortgage of a property may give
rise to capital gains under section 45 of the Income-tax Act.
However, in the context of a reverse mortgage, the intention is to
secure a stream of cash flow against the mortgage of a residential
house and not to alienate the property.
A new clause (xvi) in section 47 of the Income-tax Act, has been
subsequently inserted to provide that any transfer of a capital
asset in a transaction of reverse mortgage under a scheme made
and notified by the Central Government shall not be regarded as a transfer.
The second issue was whether the loan, either in lump sum or
in instalment, received under a reverse mortgage scheme amounts
to income and whether the receipt of such loan is in the nature of a
capital receipt. As a consequence Section 10 of the Income tax Act,
has been amended to provide that any amount received by an individual
as a loan, either in lump-sum or in installment, in a transaction of reverse
mortgage referred to in clause (xvi) of Section 47 of the Income-tax Act
shall not be included in total income. [under Section 10 (43)]
Therefore a borrower, under a reverse mortgage scheme, shall, however,
be liable to income tax (in the nature of tax on capital gains) only at the
point of alienation of the mortgaged property by the mortgagee for the
purposes of recovering the loan.
a mortgagor takes a loan from a mortgagee, against a
security. Thus, we can say that a mortgage is a transfer
by way of security.
Unlike other transfers, such as sale,
lease, exchange or gift, a mortgage has no independent
existence of its own. There can be no mortgage without a debt.
The security provided is an immovable property.
A property can be mortgaged in any of the following ways:-
1. Simple Mortgage.
2. Mortgage by Conditional Sale.
3. Usufructuary Mortgage.
4. Mortgage by Deposit of Title of Deeds.
5. English Mortgage.
6. Anomalous Mortgage (which is a combination
of any two of the above).
1. Simple Mortgage: When the possession of the mortgaged
property is not transferred from mortgagor to the mortgagee.
If the mortgagor fails to repay the loan, the mortgagee has
the right to sell the property and recover the loan from the sale amount.
2. Conditional Sale: Here the mortgagor apparently sells the
property to the mortgagee subject to certain condition.
The condition may be either of the following:
a. On failure to repay the mortgage money before a certain date the sale
shall become absolute, or
b. On such repayment of mortgage money the sale shall become invalid, or
c. On such repayment the mortgagee shall retransfer the property.
3. Usufructuary Mortgage: In this type of mortgage, the possession
of the mortgaged property is transferred to the mortgagee.
He receives the income from the property, eg. rent, profit etc,
until the repayment of the loan. The title deeds remain with the owner.
4. Mortgage By Deposit Of Title Deeds: Here, the mortgagor
delivers the title document of the property to the mortgagee with
an intention to create a security thereon. This mortgage can be
entered into only in the towns of Chennai, Kolkota, Mumbai
or any other town, as notified by the State Government in the official gazette.
5. English Mortgage:
a. The mortgagor transfers the property absolutely to the mortgagee.
b. The mortgagor binds himself to repay the borrowed money
before a certain date.
c. Such transfer is subject to the condition that the mortgagee will
retransfer the property on repayment before the agreed date.
And reverse mortgage is a new addition to these types of mortgage.
Reverse mortgages are available in Ireland, United Kingdom,
Australia, the U.S. and other countries in various forms.
"Life loan" (Irish/UK term for a reverse mortgage) programs are
very similar to U.S. reverse mortgages. In India it’s relatively a
new kind of mortgage, though in other parts of world this type of
mortgage has been in use for quite a few decades now.
Reverse Mortgages
Reverse mortgages have been popular since the Roman Empire – literally
means - "loans until death". Reverse mortgages have effectively been
around since Roman times in the form of usufruct.
Usufruct is the legal right to use and derive profit or benefit from
property that belongs to another person, as long as the property is
not damaged. In many legal systems of property, buyers of property
may only purchase the usufruct of the property.
This form of mortgages is aptly named because the payment stream
is “reversed.” Instead of making monthly payments to a lender,
as with a regular mortgage, a lender makes payments to the borrower.
Unlike a regular mortgage, the borrower can continue to stay in his
mortgaged home during his entire life span without any fear of eviction
even after the tenure expires.
Reverse mortgages can be secured by
either urban or rural property. The amount of the loan available will
depend on the borrower’s age and the value of his equity.
It is essentially a loan given to senior citizens by converting the
equity in a house property into an income stream. The scheme
involves the borrowers (senior citizens) pledging their house property
to a lender (scheduled bank or HFC) in return for a lump sum or periodic
payments spread over the borrower’s lifetime.
The home owner is not
obliged to repay the loan during his lifetime.
On his death or leaving
the house permanently, the loan is repaid along with accumulated interest,
through sale of the house property. Any excess amount will be remitted
to the borrower or his heirs.
The lumpsum or periodic payments can be utilized by the borrower
as per his needs but not for speculative purposes. After the death of
the borrower and the borrower’s spouse, the housing company sells
the property to recover the amount paid out along with interest at a rate
similar to interest on housing loans.
If the owners of the house live for a
longer period, the sum that the heir will have to pay would be bigger as
the interest amount will go up. But, if he did not survive even to claim
the amount for entire period that was agreed for, the repayment amount
due to his heir will be smaller. Ownership title of the house making
it all the more popular among Indians who have a natural instinct for
own home.
However, on the flip side, traditional joint family system, stronger
bequeath motive and widespread undervaluation of real estate properties
involving unaccounted money, tax evasion and benami holdings can be
major deterrents for the scheme to take off.
How does the reverse mortgage scheme works?
Under a reverse mortgage, the real estate to be mortgaged has already
been purchased and any financial charges on title to it have been discharged.
The borrower is not expected to make periodic payments, or any payments,
until the loan comes due. For the lender, the value of the mortgaged property
is paramount; for the borrower, the loan is obtained to supplement income
or to enable purchases of assets other than the mortgaged property.
Eligibility limits on reverse mortgages are much less stringent that traditional
forward mortgages.
Outside of homeownership, the borrower must be at least sixty years of age.
Given the importance of the value of the reverse mortgage borrower’s property,
reverse mortgage lenders require that potential borrowers obtain an appraisal
of their property. The potential borrower must pay for this appraisal.
The cost of the appraisal should be borne in mind by borrowers;
it will form a non-interest charge that should be factored into determining
the overall cost of borrowing under a reverse mortgage.
Some reverse mortgage
lenders require borrowers to retain independent legal representation for
the reverse mortgage transaction. Others require borrowers to provide a certificate
of independent legal advice as one of the closing documents for the loan.
Reverse mortgage lenders insist on having the first mortgage
on title to the borrower’s property. If the borrower’s title is
encumbered by other financial charges, then the borrower will
be obliged to use part of the reverse mortgage proceeds, or
other funds, to pay out and discharge these other charges.
Difference between a Traditional Mortgage and Reverse Mortgage
Contrasting Reverse Mortgage From Traditional Mortgages
Item Reverse Mortgage Traditional Mortgage
Purpose of loan To release the equity in the home and use the proceeds
to live a more comfortable, stress-free, retirement To purchase or
refinance a home
Before loan closing, Substantial equity in the home No or little equity
in the home
At loan closing, Owe very little and have substantial equity Owe a lot,
and have little equityWhile the loan is outstanding,
You receive payments from the lender
Loan balance rises
Equity declines You make payments to the lender
Loan balance goes down
Equity grows
At the end Owe whatever amount was borrowed, plus accrued interest
Have much less, little, or no equity Owe nothing
Have Substantial Equity
Final analysis Rising Debt-Falling Equity Loan Program Falling
Debt-Rising Equity Loan Product
Taxation Issues
In the context of the introduction of the Reverse Mortgage scheme,
it was necessary to resolve the tax issues arising there-from.
The first issue was whether mortgage of property for obtaining a
loan under the reverse mortgage scheme is a transfer within the
meaning of the Income-tax Act, 1961 (“Income Tax Act”) thereby
giving rise to capital gains. Section 2(47) of the Income-tax Act provides
an inclusive definition of ‘transfer’. Further, ‘transfer’ within the meaning
of the Transfer of Property Act, 1882 (‘Transfer of Property Act”) includes
some types of mortgage. Therefore, a mortgage of property, in certain cases,
is a transfer within the meaning of section 2(47) of the Income-tax Act.
Consequently, any gain arising upon mortgage of a property may give
rise to capital gains under section 45 of the Income-tax Act.
However, in the context of a reverse mortgage, the intention is to
secure a stream of cash flow against the mortgage of a residential
house and not to alienate the property.
A new clause (xvi) in section 47 of the Income-tax Act, has been
subsequently inserted to provide that any transfer of a capital
asset in a transaction of reverse mortgage under a scheme made
and notified by the Central Government shall not be regarded as a transfer.
The second issue was whether the loan, either in lump sum or
in instalment, received under a reverse mortgage scheme amounts
to income and whether the receipt of such loan is in the nature of a
capital receipt. As a consequence Section 10 of the Income tax Act,
has been amended to provide that any amount received by an individual
as a loan, either in lump-sum or in installment, in a transaction of reverse
mortgage referred to in clause (xvi) of Section 47 of the Income-tax Act
shall not be included in total income. [under Section 10 (43)]
Therefore a borrower, under a reverse mortgage scheme, shall, however,
be liable to income tax (in the nature of tax on capital gains) only at the
point of alienation of the mortgaged property by the mortgagee for the
purposes of recovering the loan.
Home Loans – a Force Behind Real Estate Boom
November 22nd, 2009 |
The home loans or housing finance has been a force
of significant importance behind the real estate boom
in India. Home loans in India have enabled the real
estate industry to achieve new heights.
It will not be wrong to say that finance is the very life
line of the real estate industry in India.
Everybody from the developers to the buyers rely on
the finance provided by the banks and housing finance
companies in India to give shape to their dreams.
The finance industry has been growing very rapidly
in India and has been providing seamless credit
facilities to all class of people.
The home loans / finance facility is provided
by almost all the government and private banks
governed by the Reserve Bank of India (RBI).
Their facility of home loans can be availed for
various uses like purchase of property, renovation,
construction etc. Apart from this you can also get
home equity loan, a unique concept wherein the
borrower can mortgage his existing property to
avail loan that can be used for any kind of purpose
as desired by the buyer.
Generally, people avail home equity loan facility
for the purpose of marriage, education, or bearing
medical expenses. The maximum loan amount that
banks normally offer is about 60% to 65% of the
market value of the property.
The housing finance companies follow a very
stringent process while providing a home loan.
The loans are disbursed in line with the credit
policies of the home finance bank and financial
institution.
As part of their process, banks verify the credit history
of the borrower to ensure that he/she is not a defaulter
with some other financial organization or if he/she has
misused any of the banking products.
A dream home of your choice comes into existence
only after a lot of investment of money and time.
Therefore, it becomes very important to keep this
treasured property protected from possible risks and
dangers.
Home insurance is the best way to protect your
home from all potential perils. The risks that can
be covered under a home insurance policy can
range from loss that can occur due to natural
calamities like fire, earthquake, and cyclone
or to insure the contents of the house from theft
or damage.
The home insurance in India is still at a
very embryonic stage and is being promoted
by many private and government general insurance companies.
Getting home loans is not much of a problem
today provided you are eligible to take one.
There is a cut-throat competition amongst the
housing finance companies to make their offers
more attractive.
This fray is good for the customers as they get
home loans at affordable terms. Home loans in
India has come a long way and has got widespread
acceptance as more and more people are purchasing
through this mode.
The home loans or housing finance has been a force
of significant importance behind the real estate boom
in India. Home loans in India have enabled the real
estate industry to achieve new heights.
It will not be wrong to say that finance is the very life
line of the real estate industry in India.
Everybody from the developers to the buyers rely on
the finance provided by the banks and housing finance
companies in India to give shape to their dreams.
The finance industry has been growing very rapidly
in India and has been providing seamless credit
facilities to all class of people.
The home loans / finance facility is provided
by almost all the government and private banks
governed by the Reserve Bank of India (RBI).
Their facility of home loans can be availed for
various uses like purchase of property, renovation,
construction etc. Apart from this you can also get
home equity loan, a unique concept wherein the
borrower can mortgage his existing property to
avail loan that can be used for any kind of purpose
as desired by the buyer.
Generally, people avail home equity loan facility
for the purpose of marriage, education, or bearing
medical expenses. The maximum loan amount that
banks normally offer is about 60% to 65% of the
market value of the property.
The housing finance companies follow a very
stringent process while providing a home loan.
The loans are disbursed in line with the credit
policies of the home finance bank and financial
institution.
As part of their process, banks verify the credit history
of the borrower to ensure that he/she is not a defaulter
with some other financial organization or if he/she has
misused any of the banking products.
A dream home of your choice comes into existence
only after a lot of investment of money and time.
Therefore, it becomes very important to keep this
treasured property protected from possible risks and
dangers.
Home insurance is the best way to protect your
home from all potential perils. The risks that can
be covered under a home insurance policy can
range from loss that can occur due to natural
calamities like fire, earthquake, and cyclone
or to insure the contents of the house from theft
or damage.
The home insurance in India is still at a
very embryonic stage and is being promoted
by many private and government general insurance companies.
Getting home loans is not much of a problem
today provided you are eligible to take one.
There is a cut-throat competition amongst the
housing finance companies to make their offers
more attractive.
This fray is good for the customers as they get
home loans at affordable terms. Home loans in
India has come a long way and has got widespread
acceptance as more and more people are purchasing
through this mode.
Whether buying property in India safe for NRIs?
Thursday 19th, November 2009
The Indian economy market and the real estate is now
becoming a popular investment method for NRIs.
Now a days, various schemes and avenues are
offered which open up the gates for safe investment.
Stability in market has led to immense increase in
interest with regard to it. A good deal and base in
motherland attracts NRIs and PIOs to make investment
in residential and commercial property in India. It gives
them good returns which multiply rapidly.
The Reserve Bank of India (RBI) and FEMA (Foreign Exchange
Management Act) now inculcates the sense of security in
property investment.
FEMA now gives prescribes for more
liberalized rules and regulations in addition to repatriation
of capital so invested and rental proceeds as given under RBI.
It also ensures 10-12% returns.
The flexible rules now give an excellent
opportunity for NRI investment as opposed to
earlier times where they had to suffer issues
regarding income and wealth tax, Hindu joint
family act and Municipal rules.
Unlike Indian residents, NRI enjoys the same status as property
owner, despite of different rates of property tax. Finances can
also be raised from financial institutions to purchase an apartment
and property tax is to be paid to the concerned authorities.
Home loan can be repaid by inward remittance through normal
banking or by direct debit for those who earn income through rent,
pension etc. in India. Real estate business has witnessed boom by
crediting the existing balance in Non Repatriable rupee accounts on
maturity to convertible NR account.
The transactions involved in
NRI investment in India has been made
easy through these accounts
and the online NRI banking.
Moreover, the consultants, builders and the estate dealers
ensure fair deal and transparency in projects. This allows NRI
to consider their investments as safe.
High quality construction so guaranteed plays
major role in attracting NRI investment
in real estate. There is no doubt that investing in property in India
is the best option for NRIs that bears long term benefits and security.
The Indian economy market and the real estate is now
becoming a popular investment method for NRIs.
Now a days, various schemes and avenues are
offered which open up the gates for safe investment.
Stability in market has led to immense increase in
interest with regard to it. A good deal and base in
motherland attracts NRIs and PIOs to make investment
in residential and commercial property in India. It gives
them good returns which multiply rapidly.
The Reserve Bank of India (RBI) and FEMA (Foreign Exchange
Management Act) now inculcates the sense of security in
property investment.
FEMA now gives prescribes for more
liberalized rules and regulations in addition to repatriation
of capital so invested and rental proceeds as given under RBI.
It also ensures 10-12% returns.
The flexible rules now give an excellent
opportunity for NRI investment as opposed to
earlier times where they had to suffer issues
regarding income and wealth tax, Hindu joint
family act and Municipal rules.
Unlike Indian residents, NRI enjoys the same status as property
owner, despite of different rates of property tax. Finances can
also be raised from financial institutions to purchase an apartment
and property tax is to be paid to the concerned authorities.
Home loan can be repaid by inward remittance through normal
banking or by direct debit for those who earn income through rent,
pension etc. in India. Real estate business has witnessed boom by
crediting the existing balance in Non Repatriable rupee accounts on
maturity to convertible NR account.
The transactions involved in
NRI investment in India has been made
easy through these accounts
and the online NRI banking.
Moreover, the consultants, builders and the estate dealers
ensure fair deal and transparency in projects. This allows NRI
to consider their investments as safe.
High quality construction so guaranteed plays
major role in attracting NRI investment
in real estate. There is no doubt that investing in property in India
is the best option for NRIs that bears long term benefits and security.
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