Archives for October 2019

RERA : The Real Estate (Regulation and Development) Act, 2016 has been enacted by Government of India. Some sections of the Act were enforced from 1st May, 2016 and all the sections of the act came into force from 1st May, 2017. As per the act, all states must appoint a Real Estate Regulatory Authority to ensure that the purposes of the act are carried out.

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The Real Estate (Regulation and Development) Act (RERA) has brought to the fore a growing incidence of consumer dissatisfaction, in dealing with real estate developers and service providers. Telangana State Real Estate Regulatory Authority deals in delays in project deliveries, cost escalations during construction, lopsided builder-buyer agreements and the absence of an effective enforcement mechanism, have all led to growing consumer frustration and resulted in an increased number of complaints being brought before the Regulator.

This has put tremendous pressure, on not just the Real Estate Regulatory Authorities but also the judicial system, as cases continue to be filed with civil and consumer courts. Therefore, there is a pressing need to resolve disputes, using alternative dispute resolution (ADR) mechanisms – which as a phenomenon, is not new to India. In fact, the conciliation forums under the RERA provide parties an option to settle disputes outside of the courtroom.

The scope for alternative dispute resolution mechanisms in real estate: by RERA

The most commonly propagated and used forms of ADR, continues to be arbitration, negotiation and mediation. The decision, to opt for one of these, in turn, will depend upon the peculiarity or type of dispute that arises and the need of the parties involved to control costs, maintain confidentiality and have a definite judgment announced with respect to that dispute, among other considerations.

Advantages of alternative dispute resolution

The use and advantages of ADR are directly linked to contract enforcement and management. Contracts are agreements between different stakeholders and where contracts are enforced or enacted, there is a very high probability that conflicts will arise. In almost all cases where ADR has been used, it has formed a part of the contract, where the parties involved have previously consented to use this mechanism, to reach agreements on possible problems that may arise in the future.

The need for specialists, in dispute resolution processes

Whether parties are approaching a specialist dispute resolution services organisation, resolution boards, mediation councils, regulators or the like, they should be assured that the professionals overseeing the dispute/challenge have the requisite skill set to understand the nuances of the same. These professionals typically should specialise in areas related to engineering, construction and commercial law, technology, intellectual property, infrastructure and construction financing, among various other facets of construction and infrastructure development.

Home Buying is a long-term accommodation, we look at what makes better sense – living in a rented house or buying a property – and the factors that one should consider before opting for each

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When it comes to living on rent versus living in one’s own home, people who advocate the former often argue that a rental home costs less, as compared to owning a home. Those who favour owning a house, cite the freedom that it offers. While owning a home is typically the dream of every Indian, sky-rocketing property prices in the recent past have led people to opt for renting, rather than buying.

However, if one is certain about the city in which one is going to stay in the future and has the necessary funds for the down payment and stable future cash flows, it is highly recommended to own a home. Owning a home forces savings, in the form of home loan EMI payments, which most people would otherwise spend, if they rent a property. Rentals may seem cheaper compared to the EMI in the short run but in the long run, it is far higher than the cost of the house and the rental cost cannot be recovered. Owning a House is a better option.

Advantages of Home Buying over rental accommodations

The main benefits of living in one’s own home, rather than a rented home are:

• A sense of security and pride in home ownership.
• You will not have to face increasing rentals.
• When you buy a house with a loan, you are already aware of the EMI required to be paid over the long term. Hence, the future costs are predictable and more stable.
• There is less likelihood of interference in your life, when you live in your own home.

‘capital gain’ when it comes to real estate and what are the tax implications of long-term capital gains for a property owner?

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Capital gain refers to the profit that one earns through the sale of a capital asset, such as real estate, or even stocks or bonds. It is the difference between the selling price of the property and its purchase price. Depending on the period for which the property was held, the capital gain can be either a long-term capital gain or a short-term capital gain.

The gains arising from the sale of a property that has been held by the assessee for more than a specified period of time, is termed as long-term capital gains (LTCG). In the Union Budget 2017-18, the finance minister proposed to reduce the tenure for LTCG from three years to two years. With this, any immovable property that is transferred after April 1, 2017, will be treated as long-term, if it has been held for more than 24 months. This move is expected to be especially beneficial to property investors, who are looking for a quick exit option to switch their investments or to book profits.

Tax on Long-Term Capital Gains

Any immovable property held for more than two years, is treated as long-term and the profit on such sale is taxed at 20 per cent, plus cess and surcharge. However, a taxpayer can claim exemption from long-term capital gains tax, under certain conditions:

• Section 54 exempts LTCG tax, arising on the sale of a residential house, if the indexed capital gains are invested in the purchase or construction of another residential house, within the specified period.
• Section 54F exempts LTCG tax, arising on the sale of any asset other than a residential house, if the net sale consideration is invested for the purchase/construction of a house, within a specified time period and subject to fulfilment of certain other conditions.
• Section 54EC allows an exemption of up to Rs 50 lakhs from LTCG tax, if the indexed capital gains are invested in government-notified bonds, within six months.

With respect to investing capital gains in the purchase of a new house, if, till the date of filing one’s income tax return, the gains are not utilized to purchase or construct another house, then, one must deposit the unutilised amount in a Capital Gains Deposit Account in any public sector bank. The new house can be purchased or constructed, by withdrawing the amount from this account, within the specified time limit.

Investing in Plots the Investors and home buyers often wonder, what would be the right option for investing, plots or apartments? Most of us decide in favour of land. Land as an investment option is always popular because of its better resale value when compared to residential properties. However, investments in plots have their own merits and demerits.

The pros and cons of investing in plots

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THE CONS

Risks
Although investments in land is a simple and transparent process, there remains a risk of land being taken over by the government through compulsory acquisition. Land could involve buyers in prolonged legal battles. Buyers need to check if there are any encroachments on the property.

Finance
Investments in land demands huge capital requirement. Banks offer home loans on all apartments, irrespective of location or type. However, lands are considered a riskier asset and banks do not prefer to finance them, unless they are purchased from a authorised government development authority like HMDA or DTCP

Tax
While seeking home loans, a buyer can claim tax benefits with respect to interest payment as well as principal repayment, under Section 24 and 80C of the Income Tax Act. No such provision is offered for interest paid on money borrowed for investing in land.

Supply
Limited supply of land and increasing need has generated a huge demand for plots in the country. This has, however, not affected the rates of land like other assets such as equity and gold.

Rampally is surrounded by the localities of Thumkunta, Pocharam, Moula Ali, Mallapur, Kushaiguda, Kowkur, Ghatkesar, Dammaiguda, Cheeriyal and Sainikpuri. If you are searching for Plots contact us

RERA Licensed Real Estate Agent from Hyderabad

Rampally is a village in Medchal district in Telangana, India. It falls under Keesara mandal. It is emerging as one of the most sought out places for residential layouts and Independent houses in North-Eastern part of Hyderabad. The close proximity to Pocharam IT Park in Ghatkesar has led to sudden spruce in population in this area. Ayyappa Nagar , Rampally Daira , Rampally , Ismailkhanguda , Secunderabad are the nearby Localities to Rampally Secunderabad Ranga Reddy. Uppal Kalan , Uppalkalan , Uppal are the nearby by towns to Ghatkesar having road connectivity to Ghatkesar and Rampally, Secunderabad, Ranga Reddy. Hyderabad , Bhongir , Singapur , Sangareddy are the nearby Cities to Ghatkesar. Schools and colleges are in close vicinity from the Plot at Rampally.

Connectivity with nearby Rampally localities

The locality is well-connected to various developed areas and a number of hotels, schools, banks and hospitals via an excellent network of railways and roadways.

• The nearest railway stations include Secunderabad railway station and the Hyderabad Deccan railway station, which are located at a distance of 18.1 and 23.5 kilometres respectively, from the locality.
• The nearest airport is the Rajiv Gandhi International Airport, which is 58.9 kilometres from the locality.
• Telangana State Road Transport Corporation (TSRTC) services connect the locality to major parts of Hyderabad.
• The locality is served by the Andhra Pradesh Transport Corporation (APSRTC) network of bus services.
• A significant junction named Pedda Golconda Outer Ring Road Junction is situated at a distance of 2 kilometres from the locality.

Schools in Nagaram and other social amenities

Rampally provides its residents with all kinds of social amenities to live a happy and peaceful life.  This includes various schools and hospitals. Pudami The Neighbourhood School, Lotus National School, Kingston PG College Of Computer Application, St Mary’s Bethany Convent, Vidyalaya High School, Rushi High School and many more are the best educational institutions of Rampally.

The major health institutions in Rampally include ESI Hospital, Vamshi Talli Pillala Hospital, Sudha Hospital, Chaitanya Hospital and Tulasi Hospital ECIL.

Apart from these, it also provides recreational amenities and proximity to various banks and ATMs, including Andhra Bank, Deccan Grameena Bank, Syndicate Bank and Union Bank.