One More tax on Properties > 50 lakh?

http://economictimes.indiatimes.com/markets/real-estate/realty-trends/buying-a-property-just-got-a-bit-more-cumbersome/articleshow/20756700.cms

Verbatim from Economic Times.
Copyrights with ET (Bennett Coleman) & TOI

This might help reduce the speculative 10% investor purchases if implemented correctly?
Alternately all properties below 50 lakh will heat up and prices will rise even in low end of market.
Thoughts ?

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Buying a property just got a bit more cumbersome

25 Jun, 2013, 11.30AM IST

By Aditya Bajoria

A common saying goes, to know "stress", organize a person's marriage or endeavor to build a house. Consider the various factors which affect the decision on the purchase or building of a house, they range from vastu, legal documentation, anticipated appreciation in value and maybe even the whims and fancies of the relatives. Clearly, factors which may cost a common man, seeking to obtain a roof over his head, many a nights sleep. Well, thanks to the Finance Act, 2013, the stress has been compounded.

Effective from 1 June 2013, taxes are to be deducted at source ('TDS') on payments for the purchase of immovable property (including any land other than agricultural land, or any building or part of a building) @ 1 per cent. Taxes would be required to be deducted @ 20 per cent should the seller not hold a PAN. Such requirement to deduct taxes is triggered should the purchased property's cost exceed Rs. 5,000,000.

Many hoped that the representations of the Confederations of Real Estate Developers of India, requesting for a rollback of the section would be accepted. Non notification of rules to govern such new amendments, hinted at a possible rollback similar to the one performed last year, when similar TDS requirements were proposed in the Finance Bill 2012, but not enacted into the Finance Act 2012.

However, the Government, vide a notification released on 31 May-2013, has notified the relevant rules for deducting such taxes at source. As per the rules, the purchaser is to deposit TDS, vide Form 26QB, which is a challan cum statement, within 7 days from the end of the month in which tax is to be deducted (tax to be deducted at the time of payment or credit whichever is earlier). Further the purchaser is also required to download a TDS certificate, Form 16B, from a yet to be specified web portal and issue the same to the seller within 22 days from the end of the month in which tax is to be deducted.

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This might help reduce the speculative 10% investor purchases if implemented correctly?
Alternately all properties below 50 lakh will heat up and prices will rise even in low end of market.
Thoughts ?

 

Continue discussion here

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Real Estate Regulator - Friend or Enemy

Sugata Ghosh  from Economic Times Writes -

 Verbatim copy from ET
http://economictimes.indiatimes.com/opinion/comments-analysis/real-estate-regulator-harsh-rules-soft-banks-will-keep-realty-unclean/articleshow/20468159.cms

Real estate regulator: Harsh rules & soft banks will keep realty unclean

After politicians, builders are the most despised lot. Everyone has a story of someone who got a raw deal. The keys were handed over three years after the promised date; buyers had to cough up more midway, thanks to a clause that initially appeared insignificant; the redeveloped apartment had two-and-a-half bedrooms instead of three; and a year later, another 20-storied tower sprung up on the "open space", blocking the view of the racecourse or the sea — for which the owner, taken in by pictures on glossy brochures, had paid a premium. The list is endless.

Some angry buyers move the consumer court while others grudgingly accept what they get. A few years down the line, they stop cribbing as properties in the neighbourhood change hands for double the price they had paid. By then, they could be browsing another brochure that has found its way into the inbox, planning a second home that comes across as the only sensible, even if a little sticky, investment.

The housing market is about spiralling rates that have priced out most buyers, ambitious developers who are answerable to no one, emergence of property as an asset class and mortgage instalments becoming the dominant outgo in household budgets.

Like politicians, developers require no qualification: anyone with a claim on a slice of land can put out an advertisement to attract buyers. It's a business that employs millions and flourishes without a watchdog. Thus, any hint of a new law that assures fair deals and exemplary punishments that would be handed out by a new regulator is irresistible.

But it won't be a cakewalk. Advocates of such legislation should be prepared for the tortuous road towards a well-regulated and cleaner property market.

First, home prices could go up in the medium term. Once the new Real Estate (Regulation and Development) Bill, 2013, becomes law, builders would be barred from selling a project till all approvals — as many as 70 of them — are in place. This would delay launch of new projects and push up prices of those that are cleared.

Second, corruption may rise as multiple agencies drag their feet on clearances. Developers may strike convoluted deals giving buyers the option to purchase later. Third, disqualifying a shoddy builder could stall construction in all half-done projects and hurt genuine buyers. And, lastly, the validity of many regulatory actions could be challenged in higher courts.

There would be hurdles on the way and unless there is a quick and effective mechanism to throw out unscrupulous developers and hand over unfinished projects to others for completion, harsh measures would backfire on home buyers. This could defeat the purpose behind an otherwise strong law.

The proposed regulator must play a meaningful role so that approvals are not held back without a valid reason. Besides listing out approved projects, its website should also spell out reasons why clearances are yet to come for pre-launch projects. This would make agencies responsible for vetting projects little more accountable.

It will be a tedious job but a real estate regulator, unlike most regulators, will have to play a far more proactive role that goes beyond giving the final green signal to a project when all approvals have been obtained by a builder. This will ensure that supply doesn't dry up in the short run.

But throwing the rule book would be ahalfway measure if men who bankroll developers are unwilling to pull the plug. More than any rule, this alone can make the biggest difference to the Indian property mart. So far, it hasn't happened. Banks could have brought about the change in 2008-09 when one of India's largest builders was on the brink of collapse.

Instead, lenders threw a lifeline to keep it afloat. While realty stocks plunged 90%, generous bankers thwarted a natural correction in property prices. India was among the few countries where real estate prices did not fall — in fact, even rose in cities like Mumbai — post Lehman. It was a reminder of the clout the trade wields. Having survived the worst crunch, its influence could have only grown since then. Pushing a righteous Bill a year before the polls may be a brilliant idea by the government. But make no mistake. It's aimed to restrain a formidable lobby.  


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The question now becomes - will this regulator be actually beneficial to end users  - Will India make a law like China - where they are discouraging or banning buying properties for investment -
Will our builders which are in full nexus with the politicos comply ? Will the corrupt bureaucracy of India actually change and not let this regulator be yet another bribe to pay to get a home?

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Top 10 countries slammed by the crash of gold

1. USA Holding > 8500 tons of gold

10. India                 550 tons of gold held by the government

The appetite of individual investors in India is negligible compared to the holdings in the soverign  countries. Per capita a US citizen holds Gold more then any India citizen.

The crash is gold is a reminder to everyone that the middle class gets crushed whenever bubbles are created and gold is no exception. Full article here

The US government controls everything, Gold, the fiat currency, crude oil prices, interest rates, nuclear arms, defence technology, everything in short which is of any significant importance. Everythign else they are happy to outsource to countries down the totem-pole

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Around 1.20 lakh flats lying locked in Goa: Manohar Parrikar

PANAJI: Almost 23 per cent of houses inGoa are lying locked as buyers are not staying there, Chief Minister Manohar Parrikar told the Legislative Assemblytoday. 

"Out of the five lakh flats constructed in the state, around 1.20 lakh are locked; either it is a second home or buyer is not living there," Parrikar said. 

The chief minister said this trend is putting a strain on infrastructure as "only 8 per cent of the total land amounting to 30,000-40,000 hectares is available for development. We need to ensure that some land should be preserved for posterity". 

Parrikar said Goa can not be a destination for alternate houses. 

Expect the BJP govt to take away the houses from the Russian mafia sooner or later. 

Everyone is waiting for a change in the central government before implementing their own personal agenda.  Economic Times article here

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China's housing bubble

Truth is stranger then fiction. India's housing bubble pales in contrast to the bubble in China. China cannot afford to slow down as it has a massive population to feed. If the bubble burst's the investors go down with the working class.

Just absurd.

What a China slowdown means to the world economy is  something nobody wants to talk about. Ask any analyst on CNBC and they would just brush it aside.

 The latest CBS 60 minutes video is here. 

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Italy's votes Monday to oust sleazy politics and cronyistic society

The guardian has a interesting article on the surging sentiment for the Five Star Movement (M5S). The voters are sick and tired of the current parties and are rallying behind Beppe Grillo, the leader of the M5S. The sentiment here in the Italy is no different then the one in India with the AAP, the party of the Mango people lead by Arvind Kejriwal. When the BJP protests the origin's of the Sonia Gandhi, they were protesting against themselves. The Italian voters are no different then the voters in India and so are the Italian politcians who are no different then Indian sleazy politcians.  Berlosconi is a example high handed leadership which has cost the country dear which parallels the Gandhi family and Mr Vadra who appear to have suberverted the system to their advantage to no end.

Will this change in leadership in Italy go after the AgustaWestland bribery scandal and bring down all the middlemen in Italy, UK and India to justice ? If Italians want it, they could do it. After all Rome was never built in a day. For bloggers Beppe Grillo will be liked instantly as he is on of them. 

>>>>

All the evidence suggests that, when the result of Italy's general election is known later on Monday, it will be a deafening – and sensational –Basta! (That's enough!). The publication of polls in the last two weeks of the campaign is banned in Italy. But results circulating on the internet showed an abrupt surge in support for the Five Star Movement (M5S), which wants to force a reboot, not just of Italy's sleazy politics but of its cronyistic society too.

For the first time in 20 years, we have seen an election that has not been hijacked by the sayings and doings of Silvio Berlusconi. Instead, it has been seized by another, equally controversial figure – the M5S's barnstorming frontman, Beppe Grillo. http://www.guardian.co.uk/world/2013/feb/24/italy-elections-end-to-sleaze-cronyism

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Builders blink, first price cuts are here

Article Link

After stubbornly holding on to high prices for four years in the face of sluggish sales, a crippling liquidity crunch and rising cost of capital, Mumbai’s real estate industry has just blinked.

At least three of Mumbai top builders have either cut prices by as much as Rs 2250 to Rs 5,000 or introduced flexible pricing within a single project, or launched innovative schemes where buyers stump up large sums to book properties even before the project enters construction stage.

All this means only one thing - the longdue correction in real estate prices is here. And while many builders may not be announcing price cuts up front yet, it is no secret that they all are now willing to negotiate with buyers.


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A survey conducted by Knight Frank, areal estate consultancy firm, in June last year had revealed that Mumbai real estate market had an unsold inventory of 80,000 units worth approximately Rs 1,050 billion.

The report had also stated that the global economic crisis of 2008 affected the market adversely as prices dipped in some micro-markets at the premium end of the market and rebounded, scaling to their 2007 highs in the subsequent two years.

But in 2012, the Mumbai market stagnated as buyers largely kept away expecting a drop in prices in the near future. The buyers’ patience has paid. The Mumbai market is now opening for good bargains.

Lalit Kumar Jain, president of Confederation of Real Estate Developers Association of India, said the liquidity crunch is forcing builders to reduce prices and clear inventory. He expects more builders to follow Naman, RNA and Lodha’s example.

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