Showing posts with label ACT. Show all posts
Showing posts with label ACT. Show all posts

Tuesday, June 2, 2020

Hidden facts about Real Estate (Regulation and Development) Act – RERA

The Real Estate (Regulation and Development) Act is fully implemented. The major implications of RERA are summarized below, for the understanding of a person who is not part of the real-estate sector.

Any project up to 500 square meters, and more than 8 units (flats / apartments / personal properties) that are under construction, will have to be registered under RERA.

This means that most, if not all, of the ongoing projects will be officially looked into under RERA.

Every project detail has to be registered. This includes project layout, planning, government approval, land title status, subcontractor of the project and completion schedule with RERA. It has to be presented to the consumer. Each phase of a project will be considered a stand-alone project and will require related permission.

In this way, RERA will be updated with all real estate activity which will help increase transparency and streamline the sector.

Under Section 9 of the Act, all agents and brokers have to register with RERA within three months of the implementation of the Act.

As a result, house buyers will only deal with agents and brokers who are qualified, verified and authorized.

The sale of any project will be on the basis of its original carpet area and not on the super built-up area.

Buyers will get a clear understanding and will be able to make an informed decision when purchasing a property.

Once a particular project is registered and sold, no further changes can be made without the buyer's consent.

This will eliminate the cost of fluctuations after the sale is completed. In addition, it will ensure that projects are delivered on time.

The developers will be liable to pay interest on the amount paid by the buyer if the project takes longer to complete than promised.

This law will ensure that projects are completed and delivered without any delay.
Separate accounts have to be maintained for different projects of the same developer. 70% of the client's money will be used to build related projects.

This will help in regulating the transaction. The customer's money will be used fairly and appropriately for the development of their homes. It will also assist in timely delivery of projects.

In case of any damage, the customer can contact the developer in writing within 5 years of being taken possession.

This will ensure the safety of the customer even after they are assigned to the project.
Under this Act, the Real Estate Appellate Tribunal is constituted. These tribunals will decide on disputes between buyers and developers within a time limit of 60 days.
This will speed up the resolution process.

For the developer who fails to follow the law, the maximum is 3 years without jail / fine.

Therefore, the law will have to be strictly followed for everyone in the industry, making it customer-friendly.

Monday, June 1, 2020

How to save tax from your real estate investment?

Buying a property is the biggest purchase or investment that most people make in their lifetime and the government realizes this. The government has allowed income tax deduction if the property is purchased on loan. The borrower can claim deduction from 1.5 lakh to 2 lakh under the Income Tax Act on home loans. Entire interest can be deducted directly from income if the property is not occupied by the borrower. These above conditions apply even if the money is from friends, family or private sellers.

There is a problem with the current market situation, as projects are delayed in completion. This in turn causes problems for borrowers. If their house is not fully constructed then the borrowers cannot deduct any interest. A buyer, on the other hand, receives the benefit of the principal amount. Upon possession, the borrower of the property can claim a deduction for the interest paid during the pre-construction period. To take advantage of the current scenario, a couple must take out a joint loan that allows each to claim a full tax deduction for both principle and interest. This also applies to children and parents.

If the borrower has only one house and is self-occupied, there is no taxation in this case, but if there are more houses and it is neither exempt nor occupied, then taxation here can be a bit complicated.  In such a case, the owner should get the national rent value and pay tax on it. An appropriate method is followed to calculate the national price, taking into account the value of the municipal property and the Rent Control Act or the ongoing rental rates of the locality.

If a person is trying to claim a housing loan deduction and Housing Rent Allowance (HRA) at the same time, it causes trouble. Many claim HRAs because they have a home in a different city and live in a different city. The department allows you to claim an HRA in the same city with real reasons, such as if you have a suburb in the city and your office in the city. When calculating the national value of your second home, you can deduct some taxes like municipal taxes and also 30 percent of the value for repairs and maintenance.

When it is time to sell the acquired property, the tax paid is calculated on the profit generated. If it is sold within three years of acquisition, the seller is required to pay Short Turn Capital Gains (STCG) and the time period is more than three years, they are required to pay Long Turn Capital Gains (LTCG) requires surcharge which is more than about 20 percent. If one buys a new asset equal to the long-term capital gain within one year before the date of sale, the entire tax outgo can be saved. This property is under construction. The time period is three years. While calculating STCG and LTCG tax, one can deduct money on corrections and also to acquire assets such as payment of stamp duty, legal fees and brokerage.

Monday, May 18, 2020

RERA project deadline to bring relief to developers, relaxation to house buyers interests


Although MSMEs, NBFCs and HFCs were the main focus of the Finance Minister's address, the real estate sector also received a major boost from the announcements made by Nirmala Sitharaman on Wednesday. Giving a major relief to real estate developers, FM extended the timeline for completion and registration of the project by 6 months.

The move will help the developers immensely as construction activity is grinding across the country. The wait for house buyers gets a bit long, but it was inevitable.

Including COVID-19 in the definition of “Force Measure” or “Act of God”, and the State / UT Regulatory Authority to revise the lawsuit on the moto and the date of registration and completion of projects by 6 months, in advance there is a boost for the sick. It is slated to combat disruption caused by epidemics. "This will not only provide more time for the project to be completed without any obligation for delay in completion of the project, but also prevent them from facing legal matters due to delays limited to this 6-month extension window. Will give,” a tax expert said.

While COVID-19 dissemination has been challenging for many sectors, including real estate, with many research reports in this area it appears encouraging that real estate is still considered the best investment option. This will be further strengthened by the Finance Ministry with various liquidity measures that will help reduce the rigidity currently being seen in the Indian real estate market.

In addition, the announcement of Rs 30,000crore special liquidity plan for NBFCs / HFCs and MFIs will ease the liquidity misery of stressed stakeholders. This would greatly benefit the real estate sector, given that NBFCs and HFCs are its main lenders.

Karnataka minister announced no landlord should take rent during lockdown

R. Ashok, a revenue minister from Karnataka, said that landlords could not charge rent from tenants during the lockout. He said that action will be taken against the landlords if they force the tenants to vacate the property due to non-payment of rent.

"In this epidemic situation, action should be taken against the house owners in which owner can be imprisoned for up to one year or more under the National Disaster Management Authority," as he said.

However, if the order was not only for tenants belonging to economically weaker sections or people of the society, it did not make it clear.

Although the relationship between a tenant and an owner falls under the Karnataka Rent Control Act, 2001, the government may issue an amendment or an ordinance under the Act to chart instructions regarding collection of rent and eviction.

According to tax experts, Fiat can be challenged in court. Ashish K Singh, partner at law firm Capstone Legal, said, "In my opinion, the exercise of powers under the National Disaster Management Act for rent-related disputes would be challenged before the High Court or the Supreme Court." "It is clear that the NDMA's mandate does not cover the relationship between landlord and tenant."

The state government has taken cues from Singapore passing the COVID-19 Act 2020, which allows a tenant unable to pay rent and other dues under commercial leases from rental payment obligations for six months Seeks temporary relief.

According to property brokers, many prospective house buyers have postponed their plans to buy the property, which has boosted demand for rented houses in Bangalore.

Potential house buyers are expected to moderate prices and home loan rates.

Thursday, May 7, 2020

RERA real estate Karnataka projects extends deadline to three months


Since the Karnataka Real Estate Regulatory Authority (RERA) has disrupted the supply chain of building materials across the country due to the lockdown, the extension of all residential buildings in Bengaluru has passed on completion. MAHA RERA had also extended the deadline to complete the projects by 3 months.

Apart from the disruption in the supply of construction materials, most of the labor workforce has also moved back to their house-towns. Given that the present conditions are not conducive to construction work.

The Karnataka RERA Authority has extended the project deadline by 3 months for all RERA registered projects, with the completion date expiring on or after 15 March 2020.

As per the Real Estate Act 2016 all the statutory compliance deadlines and rules and legislation which were to be held in March, April and May 2020 have been extended till 30 June 2020.

Wednesday, April 22, 2020

What are the rights and duties of the buyer related to RERA?


Section 19 of the Real Estate Act states that a home buyer shall:

  • Accessed to obtain information related to approved plans, layout plans as well as approved by specific authority and other such information. 
  • To know the phase-wise scheduling of the project including the provisions of water, sanitation, electricity and other facilities. 
  • Entered to claim possession of the apartment, plot or building. 
  • At such a rate one is entitled to claim a refund of the amount paid along with the interest and may be compensated in the manner provided under the Act. 
  • After handing over the physical possession of the unit, it entered for necessary documents and plans, including common areas. 
  • Responsible for making the necessary payments specified in the sales agreement at the appropriate time and place.
  • They will also have to pay their share of registration fees, municipal taxes, water and electricity charges, maintenance fees, land rent, and other charges.
  • Essentially responsible for participating in the formation of a union or society or collaborative society.
  • Responsible to pay interest as stipulated. If mutually agreed upon by promoters and allottees, the interest may be reduced.
  • Take possession of the unit within two months of obtaining the occupancy certificate.
  • Responsible for participating in the registration of the deed.

How to file a complaint

  • Registered allottees or organizations of any voluntary consumer association under any law can approach the Real Estate Regulatory Authority or Assistant Officer to lodge a complaint.
  • The fees will be determined by the authority.
  • The authority may direct that specific cases or issues be heard and decided by a single bench of the chairperson or any member of the authority.
  • After giving a reasonable opportunity of hearing to any person, the authority shall appoint an assistant officer to conduct an inquiry in the prescribed manner.
  • The application for compensation will be dealt with expeditiously by the officer concerned. The matter will have to be disposed of within 60 days from the date of receipt of the application.