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Floor safety certification mandatory for under-construction buildings: GNIDA

The GNIDA will soon make it mandatory for developers to seek a floor-wise safety certification from IITs for under-construction buildings in Greater Noida and Extension.

The Greater Noida Industrial Development Authority will soon make it mandatory for developers to seek a floor-wise safety certification from IITs for under-construction buildings in Greater Noida and Noida Extension. The stricter construction norms are being introduced as a measure to ensure that buildings, especially highrises, can withstand earthquakes. According to GNIDA officials, the safety certifications will be based on the National Building Code of India and all builders will have to submit a report to the authority after the IIT clearance in order to continue construction.

The decision will affect over three lakh apartments in Noida Extension and Greater Noida that are in different stages of construction and completion. So far, the norm was for all builders to seek a structural safety clearance before starting construction and after completing the project to get completion certificates from GNIDA. Now, safety clearances will have to be taken for every floor.

The measures are being adopted in Noida Extension and Greater Noida as a number of high rises clutter the skyline here. The entire region falls under Seismic Zone 4, which makes it prone to earthquakes. The spate of quakes in last year that shook NCR has also put the lens on whether the quality of constructions here is enough to resist stronger earthquakes. The buyers’ associations have welcomed the news. Any initiative which is pro-safety and pro-buyer is welcome. However, such approval and clearances should have a direct impact. There is a need for supervision on the building process by the authority.

In response to the initiative, the builders’ association, Credai, said the move is welcome as long as it does not delay construction process. This seems a buyers’ friendly move from authority but we have to check that this should not hurt the proposed deadline of the projects. The industry is already going through phase of project delays and I wish this should not add the worry of developer’s body.

Source:TOI

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How circle rates impact your property transaction

Gurgaon local authority recently proposed a cut in circle rates. Ghaziabad administration too is considering a cut and has asked for a review. Here is how and why circle rates matter in property deals.

After the announcement by Gurgaon administration to reduce circle rate by 15 per cent, Ghaziabad district authority too is assessing the circle rates in their jurisdiction. A common perception is that such rate cuts will help bring down property rates and encourage more buyers and investors in this real estate market.

Real estate developer’s fraternity has appreciated this step saying that this is much needed considering the stagnation in the market.

 

Ghaziabad had seen circle rate correction by 4 to 5 per cent in last year as compared to the rates in 2014-15. Although this was applicable to residential plots only but it left an impact on whole realty market of Ghaziabad. Since 2013, the property collection rates are revised here every year from August 01.

 

According to Dimple Bhardwaj, spokesperson of Raheja Developers, “this is one of the appreciated course of action by the local body to cut the circle rate which will lead to correction in property prices. It has been noticed that in some areas of NCR circuit, circle rates are higher than the market rates of land. So this has to be justified accordingly also to boost the realty market.”

 

The same sentiment was echoed by property consultants also. “Everyone in the real estate market in Delhi NCR has been expecting some positive steps from the government to boost the market. So, in that regard, this is a positive move. We (real estate consultants) consider it a good step,” says Harish Arora of Saksham Services.

 

“This news is good for real estate investors also. For end users also it’s good news as now they have to pay less stamp duty on the registration of properties. So it’s a win-win situation for both the government (as revenue will increase if the real estate trading increase) and end users/investors who will have to pay less for property registration,” says Arora.

 

The link between circle rates and market rates

The local body authority and state government work together to decide collection rates of property within a particular area. Local body has to prepare recommendation for the same and sends it to state government for approval. Its good time for the government to bridge the gap between property rates and the actual market value at which transaction of property take place. Let us understand in brief how these two distinct charges impact the whole transaction.

 

What is circle rate?

A circle rate is a minimum cost at which property has to be sold or purchased including independent house, commercial or residential apartment, plot etc. The rates for the locality are decided by local state government revenue department or the local development authorities.

 

What is market rate?

 

Market price is value of real estate property for a transaction between seller and buyer – generally the value is decided by the existing market dynamics of demand and supply.

 

How circle rate differ from market rate?

 

Market price is the value at which transaction of property takes place between buyer and seller. The price is driven by market force which depends upon demand and supply.

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Service tax relaxation brings cheer to home buyers

The recent verdict of Delhi High Court to exempt home buyers of under construction flats may bring happiness to thousands of homes buyers as they may get a much needed tax relief.

 In a recent verdict the Delhi High Court ruled that the buyers of under construction flats may get tax relief. The HC order may bring happiness to thousands of end-users who purchased flats before July 1, 2012. However, the judgment also says that no service tax can be charged from buyers who have purchased apartments after 2012.  The court has also directed the developers to refund the collected service tax with interest rate at 6%.The Delhi High Court bench also noted that “Service tax act 1994” did not provide any method to calculate service tax component when there is property deal between buyers and builders.

 

What is the current scenario?

 

  • At present, 15% service tax is levied on an under-construction property. The logic is that the builder is offering the service of construction hence buyers need to pay tax on that claimed service.
  • Property service tax is paid to government revenue department after collection from buyers.

 

Reading the fine print–                        

  • It is difficult to determine the value of service in construction as there is no such mechanism laid out in ‘Service Tax Act 1994’.
  • The court has directed that service tax can be charged for selection of property, builder may charge for floor rise, since it is a property value addition the developer.

 

Expert Speak

Property developers are buoyed with this development. They see it like a positive step to infuse confidence in this segment. Real estate has been reeling under stagnation for almost two years. Steps like these and others like induction of RERA helps in building buyer and investor confidence sentiment in the segment.

 

Shekar Muttreja, MD, Cosmic Group, says, “the court’s order to not charge service tax for under construction flats is a move in right direction. Home buyers will have another reason to cheer as this move would lessen their burden. For those who have already paid service tax they will get amount refunded from service tax department. With the exclusion of service tax from properties under construction we are expecting to witness improved market sentiments”.

 

According to Gaurav Gupta, General Secretary, CREDAI Raj Nagar Extension, “The court’s announcement to exempt under-construction properties from service tax would help buyers as well as builders in a big way. The exemption of service tax on composite contract between builders and buyers and refund of service tax for those who have already paid it with an interest of 6% would reduce their financial burden. We as developers too do not have any issue in refunding the amount if service tax department is ready to repay this amount”.

 

 

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Noida to have new film city along the Yamuna e-way

Noida will be home to two film cities as YEIDA has planned to develop a new film city zone along the Yamuna Expressway.

Noida’s Film City in Sector 16 might soon have a competitor. If all goes according to plan, a Mumbai-based company will begin work on a new film city along the Yamuna Expressway. If that happens, Noida will be home to two film cities.

A Mumabai-based company has proposed a project to establish a film city in Sector 29 of Yamuna City along the Expressway, and asked for 310 acres of land for it. The Yamuna Authority has submitted the presentation and now it is expected to negotiate with the price and other details. Once the negotiations are done, the land will be allotted for the project.

Though officials have not yet set a specific date for the project to begin, the film city will be similar to Mumbai’s Film City. Yamuna City is a township developed by a private builder and lies 30 km from Noida, along the Yamuna Expressway. YEIDA, one of the three development authorities in Gautam Budh Nagar, has been planning the development of a film city for a few years now.

Noida Sector 16 Film City

The Sec 16A Noida Film City was established over two decades ago and houses numerous film studios, apart from several media houses. The Noida Film City has been the venue for the shoot of upcoming films like the Sridevi-starrer Mom and Akshay Kumar and Rajnikanth’s 2.0. However, despite the presence of a number of studios, the film city is more an office complex, with many media and other companies having offices there.

YEIDA also launches New Housing Scheme along Yamuna e-way

This would be right to exclaim that property prospects of Yamuna Expressway are promising now. With the several new launches the locality is buzzing with many real estate activity. In last week, Yamuna Expressway Industrial Development Authority has come up with five new lucrative offer just to recharge the real estate market along the Yamuna e-way. In its offer authority has announced five categories of land use on offer are flats in residential and plots in industrial, institutional and commercial land use.

The real estate market along the stretch of Yamuna e-way is expected to grow and property prices may rise significantly. The experts say that the future prospects of any area is driven by the commercial zone that is taking shape around.

Source: TOI

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New exit policy to help realtors, buyers

Noida, Greater Noida and Yamuna Expressway development authorities set to bring new exit policy to help developers and home buyers.

The three development authorities of NCR may soon bring new exit policy for realtors. As per new policy, builders those who have acquired land for a group housing project and not able to execute it for any such financial reason, may quit and get their deposit back, if they want to move out from the project.

Builders can surrender surplus land that is unused to the authority. This has been decided jointly in a board meetings and proposal on this is being prepared and will sent to Uttar Pradesh government for further approval.

Prashant Tiwari, Chairman, Prateek Group says, at present, real estate is recovering from the slowdown phase and there are various factors due to which developers are unable to deliver their projects. Most adverse amongst them is slump in realty sales which is cutting down the developers funds. Due to such circumstances, developers have not been able to launch the new phases of their projects too. In many cases they have defaulted land payments to authorities also. The developers are happy with this exit policy as this will help them clear their financial liabilities and allow them to complete their existing projects.

This new move has been welcomed by developers and home buyers. Exit policy will put positive shadow in real estate market, say realtors.

According to experts, new exit policy will change the sentiments of small developers and broaden their opportunities. Realtors with small capital will step ahead in the realty market and probably it will accelerate the supply of affordable homes in the market.

CheckoutNoida homes may get costlier

It was an old demand by the developers asking iteratively for exit policy since developers were hit by the slump in the property market.

The new exit policy chiefly entails that:

  • Suppose realtors bought hundred acres of land to construct a group housing project and they may have completed one or two phase of their approved projects, but current market situation is not favouring and they may not willing to take risk to launch another phase. The policy allows him to surrender the rest of the parcel of land to the authority and get back deposits.
  • For instance, realtors owe dues of Rs 3,000 crore. If the new policy is implemented, developers can get rid of unused land can use the refunded capital in completion of their existing projects.
  • Money will be refunded to the developers at land allotment rates only.
  • The authority will refund 70 per cent of the deposit.

How will this move benefit builders and home buyers?

Big relief for realtors: After the sluggish real estate market in the national capital region what comes as consolation for realtors, if they are allowed to surrender these land parcels, they will be able to use the refunded money in a more productive manner to complete the sick projects. Even they can utilise the cash on their market planning to sell inventory.

Authorities hoping to gain more income: While the unsold inventories are piling up, local development authorities were also hit as their revenue collection has slowed down and halted overall infrastructure development in the region. To increase land allotment rates in the area is actually an intentionally taken risk to accelerate revenue collection. However, new exit policy will help authorities to generate substantial revenues and able to inject life into real estate activity in general by making productive use of vacant land freed  by developers.

Home buyers benefit: In the past, there have been several cases when the buyers who have invested in housing project in NCR and possession dates have been delayed by the developer. In some cases, the builder fails to deliver the project in specified timeline due to financial stress. This has nearly affected lakhs of home buyers who booked flat in Noida. Now with the enforcement of exit policy, builder can complete the project which is nearing completion and can give possession of flats on time.

homes-may-get-costlier

Noida homes may get costlier

Land allotment rates for residential and institutional have been hiked by 15% leaving realtors unhappy.

The residential market of Noida has always been hot destination for mid-segment buyers as the city offers multiple options in the category of affordable homes in entire NCR realty arena.

However, a recent move by the Noida authority to make hike land rates of residential and institutional land use categories by 15% has created agitation in developer fraternity. This hike is not applicable on commercial land use keeping in mind that higher prices would take away investors form the market.

The decision of New Okhla Development Authority may bring cascading effect on property prices in Noida. The registry department also updates its charges after the authorities fix the prices. This will change the sentiments of buyers who have planned to buy homes, say realtors.

Moreover, the other two parallel development authorities — GNIDA and YEIDA — are not in view to increase in previous land rates, hoping the locality will take home buyers from Noida.

CheckoutYEIDA launches 5 new land use schemes, including land for housing

The new land rates are effective from April 1, 2016 on residential and institutional land categories.

Deepak Kapoor, president CREDAI, Western UP, says, “At a time when developers are struggling to cope up with slow sales, this increase in land rates has come as a big disappointment for developers. It would now be costly to buy land parcels for developers which eventually would result in costly projects for buyers as well.

Harish Arora of Saksham Services says, “Such course of action by local authority gives a setback to new home buyers and trading investors too, especially when realty market is already lingering by the absence of potential buyers. We are shocked with the decision of Noida board to pass a steep hike in rates of residential and institutional land. However, no change in commercial land allotment rate will keep interest alive of trading investors”.

Segment-wise new prices:

The land use area in Noida is divided into five categories – A, B, C, D and E for residential, commercial and industrial lands.

  • Category ‘A’ is fully developed residential clusters and the land allotment rates in this area are corrected from Rs 68,750 to Rs 81,400.
  • Land use in ‘B’ category has received the hike from previous Rs 47,920 to Rs 56, 740. Sectors like 15, 19, and 20,21,23,25 to 29 etc. falls in this category.
  • Residential sectors in class ‘C’ will also have new rates Rs 41,320 to Rs 34,900 prior.
  • Prior to new notification, the land allotment rates in category ‘D’ residential sectors were Rs 29,170 and now it is increased to Rs 34,540.
  • Category ‘E’ is newly developed residential sectors of Noida and land rates here hiked from Rs 25,000 to Rs 29,600.
  • Group housing segment has now new rates between Rs 41,940 to Rs 1, 11,000 which was between Rs 35,420 and Rs 93,750.

Property prices likely to increase

According to realty experts, this decision will put extra load on home buyers as the property prices will uproar with hike in land allotment tax. As the land cost is vital factor of an entire real estate project. Hence, homes in Noida are going to be costlier and it will have huge impact on the exiting market.

CheckoutChecklist For Investing In Pre-launch Property

The hike in land allotment rates can have adverse effect on the real estate market of Noida. The increase in prices would discourage investments in the region and would leave an extra burden on the pockets of home buyers and investors. As the land rates will now cost more, it would bring negative sentiments in the market and can dampen the investment and growth prospects in NoidaKapoor said.

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GNIDA and YEIDA to allow loans against residential property

The three development authorities of Gautam Budha Nagar has agreed on collateral mortgage permission against residential plots or flats for Greater Noida and YEIDA areas.

The three development authorities of Gautam Budha Nagar has agreed upon on collateral mortgage permission against residential plots or flats for Greater Noida and Yamuna Expressway Industrial authority. With the effect of this proposal the owners of property in both areas can obtain a loan against property. The proposal will now further be sent to Uttar Pradesh state Government for approval before it can be implemented.

The officials revealed that the loan could be for medical, educational or any other purpose including setting up an industry. Prior to this, two authorities allows mortgage permission against property only for home loans. This loan facility will be available to only those property owners who have completes all formalities of allotment and executed their lease deeds.

Feeling the heat from agitated buyers especially in the Greater Noida (west) area, who are not being able to get possession and registration of their flats, the joint board has further directed the GNIDA to adopt a lenient view for executing sub-lease deeds for group housing units. In order to ease things out for the cash-strapped builders and consequently the harassed flat owners, GNIDA Authority will start executing sub-lease deeds for flat owners, which equal the amount of money deposited by the developer.

According to officials, till now even if the builder had completed a portion of the project that was ready for delivery and possession to the flat buyers, the builder was unable to handover possession since the NOC was not forthcoming from the Noida Authority, in view of pending dues from the builder. Till now the builders were given an NOC only once they cleared their entire outstanding dues to the authority. However, from now on permission will be granted to developers on completion of part project, to issue occupancy certificates in order to provide relief to home buyers. This will enable the builders to handover possession of the completed flats to the extent of the NOC and would be a great relief to the flat buyers, who in turn will be able to register their properties.

Source: Times Of India