Modi’s vision to set India’s Housing in order
It is pretty clear that Prime Minister Narendra Modi wants the home to be affordable for the masses. The realty sector has been under hard gaze as it is clearly evident from Real Estate regulation Act (RERA) which came into the force some months ago.
Modi has tightened his grip on real estate sector. The magnet for black money, however, realty sector is not actually customer-friendly, especially for middle-class buyers. The homebuyers have been at mercy of the developers that at times delay the deliveries as well as overcharge.
The government is planning another regulation to bring will discipline the profit-seekers who actually have kept rates high in this important sector. Impractically high rates of homes might come down of the revenue department proposal gets into action. This proposal plans to ask the builders to pay the taxes on the unsold stock of the ready homes.
In regards with the order by the court which actually held ready unsold homes that are held by the developers as the stock-in-trade are liable to tax as the income from the house property even if these are not rented out, the income tax department suggested the ministry of finance that this one way of garnering more taxes.
The real estate organizations show their completed apartments as the stock in trade, as well as the income from these, are shown as the business income as well as the other businesses.
In the rising market, various developers hold to the apartments to advantage from the rate increase that will accrue some years after the completion of the project.
With the coming of new regulation, the builders will have to sell the properties soon, by proffering the discounts or maybe get into the expensive litigation.
As per Liases Foras, the inventory which is not sold includes the properties that are under-construction and completed has increased further from 734 million square feet or around 734,000 apartments at end of March to 765 million square feet or around 760000 apartments by end of June.
As numerous builders or developers don’t bring down as per the expectations of the customers but would hold the inventory, a huge number of middle-class home buyers are at risk of missing the bus or being the rates out of the market. Modi government’s approached the real estate sector which is expected to bring the relief to home buyers.
Another important move which is considered by the government is linking the property with Aadhar. This certainly will not bring transparency to the real estate sector which is the prime and last resort of black money but soften home rates. Linking Aadhar to property transactions would actually be made mandatory.
Experts believe that such a move would actually go a long way in sucking out the black money from real estate sector and help in the crackdown on Benami properties. Seeding the Aadhar to property transactions is a great idea but not going to make an announcement on that. Already, we link the Aadhar to bank accounts, etc. and can take added steps to the market property as well.
People those buy property to hoard black money jack up rates for the end-consumers. Aadhar linkage will certainly link at Benami property as well as drive-out black money from the real estate sector by making the rates of homes affordable for the end-buyers.
Also, this will help in the NRI investment in India real estate sector as this would help the real estate sector as a whole