METRO MAGIC – Delhi Metro to reach Kundli by 2022
The Haryana Mass Rapid Transport Corporation (HMRTC), chaired by chief secretary D S Dhesi, approved the project for connecting Kundli with the Delhi Metro network at its board meeting recently.
The project will involve extending the Metro line from Narela in Delhi to Kundli, covering a distance of about 4.86km, and be a part of Delhi Metro Phase IV. The estimated cost of the project is Rs 1,100 crore and will have three stations–Narela Sector 5, Kundli, and Nathupura.
The proposed extension from Narela to Kundli is being designed to handle around 3,336 passengers per direction during peak hours, with trains expected to run at an interval of 5.50 minutes.
The Metro extension till Kundli will be a great boon for the development of real estate in this region. Thousands of workers and businessmen can now shift to Sonipat, Panipat, and other towns in the neighbouring region and can commute to Delhi daily through this network.
The fixed cost at the August 2016 price is estimated to be Rs 928 crore, including the cost of land, but excluding taxes and duties. The overall capital cost for this corridor at the August 2016 price works out to Rs 1,100 crore, including the applicable taxes and duties of Rs 172 crore.
The project is to be executed along with Phase IV of the Delhi Metro network and would be completed by March 31, 2022, with the Revenue Opening Date (ROD) assumed as April 1, 2022.
The Metro extension from Narela to Kundli would be funded on a similar pattern as the extensions to Noida, Gurgaon, Faridabad, and Bahadurgarh. The Haryana government will shoulder 80% of the cost of all construction and systems while the Centre will pitch in with the rest 20% as grant, as this extension has been planned at the specific request of Huda. Moreover, land would also be provided by Huda and the government of Haryana, free from all encumbrances.
The proposed extension from Narela to Kundli will be executed along with the Rithala-Narela corridor in Delhi Metro’s Phase IV, which is awaiting the approval of the Delhi government.
The Metro extension till Kundli will be a great boon for the people of this region, too. Lakhs of workers and businessmen living in Kundli, Sonipat, Panipat, and in the neighbouring region can come to Delhi daily through this network.
Many big commercial, residential, institutional, and other businesses are sprouting in Haryana along NH-1, beginning with Kundli. In this sense, the expansion of the Metro network on this route will not only benefit Kundli and Sonipat, but the whole of Haryana.
HOUSING FOR ALL – ACTUAL SAVINGS UNDER PMAY AND THE BUDGET
If you buy a house, the central government will lend support with over Rs 2.40 lakh up front.
The Union government has given a range of subsidies on interest payment to home loan borrowers, with a household income of up to Rs 18 lakh. The subsidy amount will be paid to the housing finance companies upfront.
This policy has a dual purpose-one, drive up the sale of houses to revive the sector and, two, achieve Prime Minister Narendra Modi’s ambitious programme, “Housing for all by 2022“.
At present, subsidy is given to lowincome households, with a total annual income of Rs 6 lakh per annum. The new scheme’s outline was announced by PM Modi on the December 31 in his Address to the Nation, whose details have been finalised only now and are likely to be notified soon. The pro gramme will be covered under “Pradhan Mantri Awas Yojana“ (PMAY).
A government source said that though the scheme is to be notified now, the benefits under the scheme were already launched from January 1, 2017, itself. Thus, all those who bought houses on and after January 1, 2017, are entitled for the benefit.
Apart from this, all the schemes of subsidy will now be available on a 20year home loan, including the one for low-income group, which was earlier for 15-year home loan only.
Under these schemes, an interest subsidy at the rate of 4% for loans of up to Rs 9 lakh will be extended by the government to those whose household’s annual income is up to Rs 12 lakh. Similarly, an interest subsidy at the rate of 3% for loans of up to Rs 12 lakh will be given to those having a household income of up to Rs 18 lakh.
At present, the government is already giving a subsidy of 6.5% on a loan of up to Rs 6 lakh to those whose household income is less that Rs 6 lakh per annum.
This does not mean that the loan amount is capped. If a person with a household income of Rs 10 lakh borrows Rs 35 lakh to buy a house, he will still get the mandated 4% interest subsidy on Rs 9 lakh. Suppose that this person borrows the amount at 8.5%, he will then pay an EMI at 4.5% on Rs 9 lakh plus an EMI at 8.5% on the rest of the amount, Rs 26 lakh in this case.
Owing to the subsidies from the government, his effective EMI will be reduced by Rs 2,117, if the repayment period is 20 years. This subsidy will not be given every month to the lender. Instead, the government will pay around Rs 2,43,894 to the lender upfront, so that the EMI at the contracted rate falls by this amount.
The interest subsidy at the rate of 4% for a 20-year loan of Rs 9 lakh results in a reduction of EMI by Rs 2,117, when the home loan is taken at 8.5%. According to the scheme, there is no restriction on the loan amount that such a homebuyer with an annual household income of Rs 12 lakh can avail, except that the 4% subsidy is available on Rs 9 lakh alone.
But if the borrower’s income is more than Rs 12 lakh per annum but up to Rs 18 lakh, he can get 3% subsidy on only an amount of up to Rs 12 lakh, from his total home loan. In this also, there is no cap on loan amount or the value of the property that such a person can buy. However, the maximum benefit in this leads to a reduction in EMI by Rs 2,159, if borrowed at 8.5%, which is equivalent to reduction in the borrowed capital by Rs 2,48,810.
For a lower-income group household earning up to Rs 6 lakh per annum, the interest subsidy is 6.5% on an amount of up to Rs 6 lakh from the total loan amount, which reduces EMI by Rs 2,172, if the loan is borrowed at 8.5%. This is also equivalent to reduction in borrowed amount by Rs 2,50,240.
Even after availing this benefit under PMAY, one can avail income tax benefits on the home loan, which can go up to Rs 61,800 if a person’s income is in the 30% tax bracket and up to Rs 41,200 if the income is in 20% tax bracket, as the person is allowed to deduct the interest payment of up to Rs 2 lakh from his or her taxable income.
But if a person is buying his or her first house at a capital value of less than Rs 50 lakh by taking a loan of Rs 35 lakh or less, the benefit will increase substantially. In this case, a person having a household income in the 30% marginal tax bracket can get a maximum annual tax benefit of Rs 77,250, while those whose income is in 20% tax bracket will be able to save up to Rs 51,500 annually. In this case, too, a deduction of Rs 2.50 lakh is allowed.
National Housing Bank and HUDCO are the nodal agencies to implement the schemes. At present, the scheme for LIG is being rolled out. Till December 31, 2016, the government has given subsidy to around 18,000 housing units with the total subsidy disbursal amounting to around Rs 310 crore.
A senior NHB official said that following the revision of the scheme to include middle-income group households, the disbursal rate is likely to pick up.
Top 10 expectations of real estate sector from Budget 2017
Real estate industry has high expectation from the upcoming budget 2016-17. Stakeholders are demanding that central government gives relaxation in income tax rate, provide clarity on GST, raise House Rent Allowance (HRA) deduction and announce policies to standardize construction materials in order to uplift the real estate industry.
Take a look at some of the major expectations that stakeholders have from the upcoming Budget 2016-17:
Directly or indirectly, the real estate sector contributes to over 15% of India’s GDP. It has been asking for industry status for quite some time now. In its absence, developers are forced to borrow at high interest rates and comply with a stringent evaluation process. Unavailability of funds at a reasonable rate of interest delays the construction process and increases the final cost of homes, negatively impacting the end consumer.
Giving industry status to the entire real estate sector, instead of granting infrastructure status only to the affordable housing segment, would help in pushing the housing demand in India.
Single window clearance
For the real estate sector to really grow and execute its projects on time, various government approvals should be given in a timely manner. Developers have for long been demanding single window clearance to remove bureaucratic delays, which in turn delay delivery of homes.
Clarity on beneficiaries under PMAY
The government recently announced that interest rates of 3% would be applicable on loans of up to Rs. 12 lakh and 4% on loans of up to Rs 9 lakh, under the Pradhan Mantri Awas Yojana (PMAY). Now, two new income categories can avail higher loans with interest subsidies. The Budget should give more clarity on the actual definition of beneficiaries who can avail of these benefits.
For example – would young urban professionals hoping to buy their own apartments but not belonging to either the EWS (Economically Weaker Section) or the LIG (Low Income Group) segments be allowed similar subventions? Also, affordable housing is largely available in the fringe areas of metros and tier-II, III cities. Would certain redevelopment projects within metros meeting the affordable housing definition be granted similar benefits?
Financial protection from project delays
The deduction on interest of self-occupied houses is capped at Rs 2 lakh. For under construction residential units, however, if the construction is completed after 3 years, then the deduction is just Rs 30,000. This 3-year period starts from the end of the year in which the loan was taken. Lately, there have been many delays in the completion of many housing projects beyond the 3-year period.
This has caused hardships to property buyers. To provide them some relief, the government may consider allowing interest deduction in such cases without the cap of Rs. 30,000, and from the year in which the possession was due to the buyer as per the terms of the agreement.
I-Tsopsfor first-time home buyers
Can a first-time home buyer looking at an affordable project get additional income tax incentives for at least five years? The Budget should throw more light on this. Any efforts in this direction would help the government move closer to its objective of delivering ‘Housing for All by 2022’.
Also, given the lack of institutionalized rental housing in Indian cities, such a move could spur many fence-sitters into moving out from their rented apartments to owned homes. It could also encourage more developers to come up with products suiting these segments.
Simplified tax norms for REITs
We have not seen a single REIT listing till date because of the presence of multiple taxes. Until tax hurdles are removed for developers and asset holders, it is highly unlikely that we will see any REIT listing. The government should recognize the capacity of REITs to improve market conditions for the real estate sector and remove the policies constraining their growth. The government should look at:
• Reduced level of taxation of REIT income
• Waiver of capital gains for the developer at the time of transfer of property into REIT
• Removal of service tax on lease premises
Higher tax saving on home loan & home insurance premiums
The government should increase the tax deduction limit for housing loans, especially for buyers in metropolitan cities. The current limit of Rs 2 lakh is insignificant, given the ticket sizes in cities like Mumbai where most houses are priced at Rs 1 crore and above. Also, tax concessions on house insurance premiums could be introduced to encourage end-users to insure their homes.
Similarly, the tax exemption limit should be increased by about Rs 1 lakh and be auto-set to match inflationary trends in a financial year.
Clarity on GST
Salaried persons get house rent allowance (HRA) as a component of their total salary, and can therefore claim a deduction. This deduction can be substantial in cases where the salary and its HRA component are higher. However, self-employed persons and those who draw lump sum pays without an HRA component can only claim a maximum deduction of Rs 2,000 a month under Section 80GG. The Budget can and should address this anomaly.Digitize all land records
Digitize all land records and registration process to make them easy to do and transparent.
MIRACLE YEAR – Prime Minister Modi walks the talk on `Housing for All’
Prime Minister Narendra Modi announced a bonanza for home buyers in the economically weaker sections and lower-income groups, on the New Year Eve–in the form of subsidies in interest rate–4 percentage points on a loan of up to Rs 9 lakh, and 3 percentage points on a loan of up to Rs 12 lakh.This means, if a person takes a loan of Rs 9 lakh at 9% from a bank or NBFC, his effective rate would be 5% and his EMI would be calculated on 5% only. And, if a person borrows Rs 12 lakh at 9%, his effective rate would be 6% only. All these schemes have been launched under the Prime Minister Awas Yojana (PMAY).
The central government is already giving a subsidy to 6.5 percentage points on a home loan of up to Rs 6 lakh, under the PMAY. This gives a net benefit to the borrower, of Rs 2.21 lakh, on a loan of Rs 6 lakh to be paid back in 15 years. That means, the borrower is servicing a loan of Rs 3.79 lakh only, at the rate he borrowed the loan.
The new subsidy scheme announced by the government on home loans for the economically weaker sections and the lower-income groups will come as a tonic for demand in housing, in the affordable segment, as these benefits can be availed by a borrower with an annual income of up to Rs 6 lakh (Rs 50,000 per month).
According to a SBI report, a person with an annual income of Rs 6 lakh is eligible for a housing loan of up to Rs 24 lakh. Under this rubric, the revised PMAY scheme will be transformational for the housing segment of the real estate, as around 65% of housing loans of the 26 public sector banks are in the slab of loans under Rs 25 lakh.
As the benefit can be availed on a part of the loan as well, people with an income up to Rs 6 lakh can avail this benefit even if they borrow Rs 30 lakh, provided the bank gives them the loan on the basis of their income at Rs 6 lakh per annum. Arundhati Bhattacharya, chairman of SBI, said in a statement that low-cost housing should register growth in the medium to long term.
The net benefit of 4 percentage point subsidy on a home loan of Rs 9 lakh is equivalent to a discount of Rs 1,98,300 on the principal amount. According to the calculation, the EMI on a home loan of Rs 9 lakh for 15 years will come down to Rs 7,117–from Rs 9,128–after the subsidy; a fall by over 22%.
The discount of Rs 1,98,300 in principal means that the effective loan amount will come down from Rs 9 lakh to Rs 7,01,700.
The 3 percentage point subsidy on a home loan of Rs 12 lakh for 15 years will bring down the EMI by over 17%, to Rs 10,126, from Rs 12,171. This means, the net benefit will be Rs 2,01,550 on the principle amount.
Now, suppose, a person borrows Rs 30 lakh at 9%, he can avail the benefit of 3 percentage point subsidy on Rs 12 lakh and will service the loan at 6% and the rest of the loan amount of Rs 18 lakh at the contracted rate of 9%.
Sriram Kalyanaraman, MD of National Housing Bank, in a recent interview with The Times of India said that there is a great demand from borrowers. NHB is the nodal agency for disbursing the subsidy to borrowers through banks and NBFC, under Credit Linked Subsidy Scheme (CLSS). Thousands of crores in subsidies have already been disbursed.
S Ramratthinam, CEO of Muthoot Homefin (I) Limited, said: “The government’s decision to provide interest subvention for loans of up to Rs 12 lakh under the PMAY is expected to boost lowincome housing, primarily in peripheral areas of urban localities, across the country and also in Tier 2 and Tier 3 locations. These measures are highly positive for the affordable-housing segment and this would help realize the `Housing for All’ objective of this government.“
Sriram Mahadevan, business head of Happinest, Mahindra Lifespaces, said: “With the Prime Minister’s announcement that housing loans in urban areas of up to Rs 9 lakh and Rs 12 lakh would receive interest subsidy of 4% and 3%, respectively, Year 2017 has thus begun on a positive note for affordable housing in the country. These initiatives will serve to bring home ownership within the reach of a wider cross-section of the society through reduced rates of interest and improve affordability.“
For developers, too, the incentive implies additional demand for housing units and reduced unsold inventory.Faster sales offtake can result in shorter revenue cycles and improved project efficiencies; this, in turn, can incentivize more developers to venture into affordable housing, Mahadevan said.
Govt Gives Land For Metro On Dwarka e-Way
सोहना, मानेसर में भी स्मार्ट सिटी बनाएंगे खट्टर
चण्डीगढ़, 2 जुलाई- हरियाणा के सोहना और मानेसर में 1500 एकड़ भूमि पर स्मार्ट सिटी विकसित की जाएगी, जिसके लिए आज नई दिल्ली में मुख्यमंत्री श्री मनोहर लाल की उपस्थिति में चीन की कम्पनी चाईना फार्च्यून लैंड डैवलपमैंट कम्पनी तथा हरियाणा राज्य औद्योगिक एवं आधारभूत संरचना विकास निगम के बीच एक बड़ा समझौता (एमओयू) हुआ।
इस समझौते के दस्तावेजों पर चाईना फार्च्यून लैंड डैवलपमैंट कम्पनी के प्रेजीडैंट जैरी जायो तथा हरियाणा राज्य औद्योगिक एवं आधारभूत संरचना विकास निगम की तरफ से प्रबंध निदेशक श्री सुधीर राजपाल ने हस्ताक्षर किये। इस समझौते के तहत चाईना फार्च्यून लैंड डैवलपमैंट कम्पनी 5 बिलियन डॉलर की राशि का निवेश करेगी। यह परियोजना 1500 एकड़ भूमि पर तैयार की जाएगी और परियोजना का शुभारम्भ इस साल के अंत तक हो जाएगा।
इस अवसर पर हरियाणा के मुख्यमंत्री श्री मनोहर लाल ने कहा कि चाईना फार्च्यून लैंड डैवलपमैंट कम्पनी सोहना और मानेसर में 1500 एकड़ भूमि पर स्मार्ट सिटी की स्थापना करेगी। इस परियोजना पर कम्पनी चाईना फार्च्यून लैंड डैवलपमैंट कम्पनी तथा हरियाणा राज्य औद्योगिक विकास एवं संरचना निगम ज्वाइंट वेंचर के रूप में कार्य करेंगे। आज हुए समझौते के तहत चीन की कम्पनी द्वारा ढांचागत सुविधाओं में औद्योगिक इकाइयों, रिहायशी व वाणिज्य जैसी परियोजनाएं शामिल होंगी। ये सभी परियोजनाएं आगामी 10 वर्षों में पूरी की जाएगी। इन परियोजनाओं के पूरा होने से प्रदेश के लोगों को स्वास्थ्य, शिक्षा से सम्बन्धित विभिन्न प्रकार की स्मार्ट सेवाएं मुहैया होंगी। उन्होंने कहा कि सोहना व मानेसर की 1500 एकड़ भूमि पर बनने वाले स्मार्ट सिटी में इलेक्ट्रॉनिक ऑटो, आटो से सम्बन्धित इकाइयां स्थापित होंगी, जिससे प्रदेश के लाखों लोगों को प्रत्यक्ष व अप्रत्यक्ष रूप से रोजगार मिलेगा।
इस मौके पर चाईना फार्च्यून लैंड डैवलपमैंट कम्पनी के प्रैजीडैंट जैरी जायो ने कहा कि हरियाणा एक बढ़ती हुई अर्थव्यवस्था का राज्य है और उनका भी यही मकसद है कि हरियाणा समृद्ध होगा तो हम समृद्ध होंगे। इसी सिद्धांत को लेकर कम्पनी ने हरियाणा में पूंजी निवेश करने की रूचि दिखाई है। उन्होंने कहा कि कम्पनी द्वारा सोहना और मानेसर में 1500 एकड भूमि चिह्नित की गई है और शीघ्र ही सभी औपचारिकताएं पूरी कर इस साल के अंत तक सभी परियोजनाओं पर कार्य शुरू कर दिया जाएगा। ज्ञात है कि चाईना फार्च्यून लैंड डैवलपमैंट कम्पनी चीन की नामी कम्पनी है जिसका इन्फ्रास्ट्रक्चर डैवलपमैंट करने में प्रथम स्थान है। चीन के बीजिंग जैसे शहरों में ढांचागत सुविधाएं विकसित करने में इस कम्पनी का महत्वपूर्ण योगदान है।
इस अवसर पर मुख्यमंत्री के प्रधान सचिव श्री राजेश खुल्लर, उद्योग विभाग के प्रधान सचिव श्री देवेन्द्र सिंह, हरियाणा राज्य औद्योगिक एवं आधारभूत संरचना विकास निगम के प्रबंध निदेशक श्री सुधीर राजपाल, नई दिल्ली स्थित हरियाणा भवन के प्रधान आवास आयुक्त श्री आनंद मोहन शरण तथा अन्य अधिकारी उपस्थित थे।
No Service Tax on buying under construction flats, rules Delhi High Court
The Delhi High Court recently held that no Service Tax could be charged in respect to the contracts entered into with the builders or developers for the purchase of apartments/flats. In the case of Suresh Kumar Bansal vs the Union Of India, the bench of Justices S. Muralidhar and Vibhu Bakhru observed that the Section 65(105)(zzzh) is applicable for the purchase of units in a complex within the scope of taxable service. However, the service tax will still be applicable on preferential location charges (PLC) levied by a builder.
The Court ordered if the developer has already collected the Service Tax on such services, same should be refunded with interest at the rate of 6%.
However, the Service Tax on PLC (Preferred location charges) is still applicable.
Service Tax on sale of Apartments
Till date, Service tax is levied by the Central Government on the construction services offered by the developers to buyers. Presently, Service tax is 15.0%. Service tax is applicable on almost all services that a consumer avails, including buying an under-construction property. This is so because, in the case of an under-construction property, the developer is deemed to be the provider of construction services to the homebuyer, and hence service tax is charged on the cost of construction. It is not charged on the entire value of the property but only to the extent of the cost of construction. This means that cost of land is excluded. For the purpose of calculation, 25% of the gross value of an under-construction unit with the value less than Rs.1 crore is considered to be the cost of construction, and service tax is applied on this.
Suresh Kumar Bansal vs the Union Of India in Delhi High Court
The buyers purchased apartments in Sethi Group – Max Royal, Sector 76, Noida from M/s Sethi Buildwell Pvt. Ltd. The builder has in addition to the consideration for the flats also recovered service tax from the Petitioners, which is payable by him for services in relation to the construction of complex and on preferential location charges.
The buyers are aggrieved by the levy of service tax on services ‘in relation to the construction of complex’ as defined under Section 65 (105)(zzzh) of the Finance Act, 1994 (hereafter ‘the Act’). Buyers state that their agreement with the builder is a composite contract for the purchase of immovable property and contend that in the absence of specific provisions for ascertaining the service component of the said agreement, the levy would be beyond the legislative competence of the Parliament.
The controversy of Service Tax
The controversy involved in these petition relates to the question whether the consideration paid by flat buyers to a builder/promoter/developer for acquiring a flat in a complex, which under construction/development, could be subjected to levy of service tax. According to the Petitioners, the agreements entered into by them with the builder are for the purchase of immovable property and the Parliament does not have the legislative competence to levy service tax on such transaction. The Petitioners further claim that the Act and the rules made thereunder do not provide any machinery for computation of the value of services, if any, involved in the construction of a complex and, therefore, no such tax can be imposed.
Based on the various submissions and the orders passed by the Hon’ble Supreme Court, the court made finally observations:
In the present case, neither the Act nor the Rules framed therein provide for a machinery provision for excluding all components other than service components for ascertaining the measure of service tax. The abatement to the extent of 75% by a notification or a circular cannot substitute the lack of statutory machinery provisions to ascertain the value of services involved in a composite contract.
Insofar as the challenge to the levy of service tax on taxable services as defined under Section 65(105)(zzzzu) is concerned, we do not find any merit in the contention that there is no element of service involved in the preferential location charges levied by a builder. We are unable to accept that such charges relate solely to the location of land. Thus, preferential location charges are charged by the builder based on the preferences of its customers. They are in one sense a measure of additional value that a customer derives from acquiring a particular unit. Such charges may be attributable to the preferences of a customer in relation to the directions in which a flat is constructed; the floor on which it is located; the views from the unit; accessibility to other facilities provide in the complex etc. As stated earlier, service tax is a tax on value addition and charges for preferential location in one sense embody the value of the satisfaction derived by a customer from certain additional attributes of the property developed. Such charges cannot be traced directly to the value of any goods or value of land but are as a result of the development of the complex as a whole and the position of a particular unit in the context of the complex.
If the builder has collected any amount as service tax from the buyers for taxable service as defined in Section 65(105)(zzzh) of the Act and has deposited the same with the government authorities. Any such amount deposited shall be refunded to the buyers with interest at the rate of 6% from the date of deposit till the date of refund.
Order Copy: SURESH KUMAR BANSAL and ANUJ GOYAL vs UNION OF INDIA & ORS W.P.(C) 2235-2011 and 2971/2011
The Logical Buyer and the Buyer’s community welcome the decision of Hon’ble High Court. Homebuyers have always been burdened with various taxes. Instead of safeguarding the interests of homebuyers across the country, the governments have made them an easy source of income by levying various taxes.
The order of Hon’ble Delhi High Court if not challenged in SC by the government would be applicable to all the homebuyers. You don’t necessarily have to go to Court to get the refund if this petition succeeds.
Source:-The Logical Buyer
Real Estate Regulator Bill: 10 things you should know
The Rajya Sabha passed the Real Estate Regulator Bill, which will help regulate the sector and bring in clarity for both buyers and developers. Here are 10 things you should know about this bill, touted as a key reform measure in the vast real estate sector.
1) It establishes the State Real Estate Regulatory Authority for that particular state as the government body to be approached for redressal of grievances against any builder. This will happen once every stateratifies this Act and establishes a state authority on the lines set up in the law.
2) This law vests authority on the real estate regulator to govern both residential and commercial real estate transactions.
3) This Act obliges the developer to park 70% of the project funds in a dedicated bank account. This will ensure that developers are not able to invest in numerous new projects with the proceeds of the booking money for one project, with the proceeds of the booking money for one project, thus delaying completion and handover to consumers.
4) This law makes it mandatory for developers to post all information on issues such as project plan, layout, government approvals, land title status, sub contractors to the project, schedule for completion with the State Real Estate Regulatory Authority (RERA) and then in effect pass this information on to the consumers.
5) The current practice of selling on the basis of ambiguous super built-up area for a real estate project will come to a stop as this law makes it illegal. Carpet area has been clearly defined in the law.
6) Currently, if a project is delayed, then the developer does not suffer in any way. Now, the law ensures that any delay in project completion will make the developer liable to pay the same interest as the EMI being paid by the consumer to the bank back to the consumer.
7) The maximum jail term for a developer who violates the order of the appellate tribunal of the RERA is three years with or without a fine.
8) The buyer can contact the developer in writing within one year of taking possession to demand after sales service if any deficiency in the project is noticed.
9) The developer cannot make any changes to the plan that had been sold without the written consent of the buyer. This puts paid to a common and unpopular practice by developers to increase the cost of projects.
10) Lastly, every project measuring more than 500 square metres or more than eight apartments will have to be registered with the RERA.
What is HUDA Affordable Housing?
According to the RICS Report on Making Urban Housing Work in India, affordability in the context of urban housing means provision of ‘adequate shelter’ on a sustained basis, ensuring security of tenure within the means of the common urban household. RICS
Practice Standard Guidance Notes (GN 59 2010) states that ‘affordable housing is that provided to those whose needs are not met by the open market’.
• According to the KPMG Report on ‘Affordable Housing – A Key Growth Driver in the Real Estate Sector’, affordable housing is defined in terms of three main parameters, namely income level, size of dwelling unit and affordability. Whilst the first two parameters are independent of each other, the third is a dependent parameter that can be correlated to income and property prices (Figure 2).
• As per US Department of Housing and Urban Development, the generally accepted definition of housing affordability is ‘for a household to pay no more than 30% of its annual income on housing. Families who pay more than 30% of their income for
housing are considered cost burdened and may have difficulty affording necessities such as food, clothing, transportation and medical care’.
• According to the Task Force on Affordable Housing set up by the MHUPA in 2008, affordable housing for various segments is defined by size of the dwelling and housing affordability derived by the household income of the population (Figure 3).
• The JNNURM Mission Directorate of MHUPA has also defined affordable housing in its amended Guidelines for Affordable Housing in Partnership released in December 2011 (Figure 4).
What is HUDA affordable housing policy?
This policy is intended to encourage the planning and completion of „Group Housing Projects‟ wherein apartments of „pre-defined size‟ are made available at „pre-defined rates‟ within a „Targeted time-frame‟ as prescribed under the present policy to ensure increased supply of „Affordable Housing‟ in the urban housing market to the deserving beneficiaries.
What are planning and area parameters?
(i) Planning Parameters: The planning parameters for the projects allowed under this policy are as follows:
a. Min. and Max. density permitted: 850ppa (min) & 900ppa (max)
b. Maximum FAR allowed: 225
c. Maximum Ground Coverage allowed: 50%
d. Maximum area under Commercial Use: 4% of the Net Planned Area at 175 FAR.
e. Minimum Area under organized Open Space: 15% of the Net Planned Area
f. Occupancy Norm (for density calculations): 5 persons per flat
g. An additional component of population density, FAR and commercial area is provided beyond what is allowed in group housing colonies to ensure the viability of such projects.
(ii) Type of Apartment and Area under such Apartments:
a. The apartments of pre-defined size-range shall be allotted at a pre-defined rate to ensure provision of affordable housing under this policy.
b. The carpet area of the apartments shall range from 28sqm to 60sqm in size.
c. The term “carpet area” shall mean the net usable covered floor area bound within the walls of the apartment but excluding the area covered by the walls and any balcony which is approved free-of-FAR, but including the area forming part of kitchen, toilet, bathroom, store and built-in cupboard/ almirah/ shelf, which being usable covered area shall form part of the carpet area.
d. No separate EWS category apartments shall be provided to eliminate any cross subsidy component and thus to avoid any adverse impact on the affordability of apartments made available under this policy.
(iii) Parking Norms:
a. The parking space shall be provided at the rate of half Equivalent Car Space (ECS) for each dwelling unit.
b. Only one two-wheeler parking site shall be earmarked for each flat, which shall be allotted only to the flat-owners. The parking bay of two-wheelers shall be 0.8m x 2.5m unless otherwise specified in the zoning plan.
c. No car parking shall be allotted to any apartment owner in such projects.
d. The balance available parking space, if any, beyond the allocated two-wheeler parking sites, can be earmarked as free-visitor-car-parking space.
e. Additional parking norms and parameters, if any, can be specified in the zoning plan.
(iv) Community Sites: The coloniser shall be required to provide the following community sites in any such project, which shall form part of the common areas and facilities as defined under the Haryana Apartment Ownership Act:
a. One built-up Community Hall of not less than 2000sqft.
b. One built-up Anganwadi-cum Creche of not less than 2000 sqft area.
c. No other community sites shall be required to be provided in such project.
(v) Maintenance of colony after completion of project: A commercial component of 4% is being allowed in the project to enable the coloniser to maintain the colony free-of-cost for a period of five years from the date of grant of occupation certificate, after which the colony shall stand transferred to the “association of apartment owners” constituted under the Haryana Apartment Ownership Act 1983, for maintenance. The coloniser shall not be allowed to retain the maintenance of the colony either directly or indirectly (through any of its agencies) after the end of the said five years period. Engaging any agency for such maintenance works shall be at the sole discretion and terms and conditions finalised by the “association of apartment owners” constituted under the Apartment Ownership Act 1983.
What are allotment rates, allotment and eligibility criteria?
Allotment Rate: The allotment rate for the Apartment units approved under such projects shall be as follows:
|Sr. No.||Development plan||Maximum allotment rate on per sqft carpet area basis||Additional recovery against balcony of min 5ft clear projection|
|a||Gurgaon, Faridabad, Panchkula, Pinjore-Kalka||Rs.4,000/- per sq. ft.||Rs 500 per sqft against all balcony area in a flat adding upto and limited to 100 sqft, as permitted in the approved building plans.|
|b||Other High and Medium Potential Towns.||Rs.3,600/- per sq. ft.||Rs 500 per sqft against all balcony area in a flat adding upto and limited to 100 sqft, as permitted in the approved building plans.|
|c||Low Potential Towns||Rs.3,000/- per sq. ft.||Rs 500 per sqft against all balcony area in a flat adding upto and limited to 100 sqft, as permitted in the approved building plans.|
NOTE: ♯ : Such cantilevered balconies (unsupported on three sides) shall not be part of carpet area and shall continue to be allowed free-of-FAR.
(ii) Eligibility Criteria:
a. Any person can apply but person which includes his/her spouse or his/her dependent children who do not own any flat/plot in any HUDA developed colony/ sector or any licenced colony in any of the Urban Areas in Haryana, UT of Chandigarh and NCT Delhi shall be given first preference in allotment of flats. An applicant in a specific colony shall make only one application. Any successful applicant under this policy shall not be eligible for allotment of any other flat under this policy in any other colony. In case, he/she is successful in more than one colony, he/she will have choice of retain only one flat. All such applicants shall submit an affidavit to this effect.
b. Upto 5% of the total number of flats as approved in the building plans may be allotted by a licensee to its employees/ associates/ friends/ relatives etc. subject to the disclosure of their name/address and other identification details to the allotment committee and the allotment procedure for such flats shall also be completed along with the draw of flats for general category flats. The rates and eligibility criteria prescribed under this policy shall continue to be applicable on such preferential allotments also and the allotment procedure shall be completed along with general category flats. In case less allotments are made for such preferential category flats, the extra availability shall be merged with general category allotments.
(iii) Allotment criteria:
The draw for allotment of apartments shall be held under the supervision of a committee constituted for the purpose by following a transparent procedure as below:
a. Advertisements for booking of apartments shall be issued by the coloniser on two occasions at one week interval in „One of the leading English National daily‟ and „Two Hindi Newspapers‟ having circulation of more than ten thousand copies in the State to ensure adequate publicity of the project and should include details like allotment rate, schedule of payment, number and carpet area of apartment etc. The proforma of advertisement shall be separately approved by the DGTCP and hosted on the Department website for clarity.
b. All flats in a specific project shall be allotted in one go within four months of sanction of building plans or receipt of environmental clearance whichever is later and possession of flats shall be offered within the validity period of 4 years of such sanction/ clearance. Any person interested to apply for allotment of flat in response to such advertisement by a coloniser may apply on the prescribed application form alongwith 5% amount of the total cost of the flat. All such applicants shall be eligible for an interest at the rate of 10% per annum on the booking amount received by the developer for a period beyond 90 days from the close of booking till the date of allotment of flat or refund of booking amount as the case may be. The applicant will be required to deposit additional 20% amount of the total cost of the flat at the time of allotment of flat. The balance 75% amount will be recovered in six equated six monthly instalments spread over three-year period, with no interest falling due before the due date for payment. Any default in payment shall invite interest @15% per annum. The project-wise list of allottees shall also be hosted on the website of the Department.
c. The scrutiny of all applications received as per the parameters prescribed in the policy shall be completed by the coloniser under the overall monitoring of concerned District Town Planner (DTP). The scrutiny of applications by the joint team of coloniser and the concerned DTP shall be completed within three months from the last date of receipt of applications as indicated in the advertisement.
d. On completion of scrutiny as above, the concerned Senior Town Planner shall fix the date of draw of lots. Simultaneously the ineligible applications shall be returned within one month of completion of scrutiny by the coloniser indicating the grounds on which the applications have been held to be ineligible alongwith the 5% booking amount received from such applicants. No interest in such case shall be paid.
e. After fixation of date for draw of lots, an advertisement shall be issued by the coloniser informing the applicants about the details regarding date/time and venue of the draw of lots in the same newspaper in which the original advertisement was issued.
f. The allotment of apartments shall be done through draw of lots in the presence of a committee consisting of Deputy Commissioner or his representative (at least of the cadre of Haryana Civil Services), Senior Town Planner (Circle office), DTP of the concerned district and the representative of coloniser concerned.
g. Only such applications shall be considered for draw of lots which are complete and which fulfil the criteria laid down in this Policy. However, it is possible that some of the application forms have certain minor deficiencies, viz., missing entry on the application form, incorrect/missing line in affidavit, illegible copies of certain documents. Such applications may also be included in the draw of lots. However, in case any of such applications are declared successful in the draw of lots, applicants may be granted an opportunity of removing the shortcomings in their application in all respects within a period of 15 days, failing which their claim shall stand forfeited. The said 15 days period shall start from the date of publication of the list of successful allottees in the newspaper marking those successful applications with minor deficiencies for information and notice of such applicants for removing such deficiencies and submit the same to the concerned DTP. The list of such successful allottees shall also be maintained on the website of the Department.
h. A waiting list for a maximum of 25% of the total available number of flats available for allotment, may also be prepared during the draw of lots who can be offered the allotment in case some of the successful allottees are not able to remove the deficiencies in their application within the prescribed period of 15 days. In case of surrender of flat by any successful applicant, an amount of Rs 25,000/- may be deducted by the coloniser. Such flats may be considered by the committee for offer to those applicants falling in the waiting list. However, non-removal of deficiencies by any successful applicant shall not be considered as surrender of flat, and no such deduction of Rs 25,000 shall be applicable on such cases. If any wait listed candidate does not want to continue in the waiting list, he may seek withdrawal and the licencee shall refund the booking amount within 30 days, without imposing any penalty. The waiting list shall be maintained for a period of 2 years, after which the booking amount shall be refunded back to the waitlisted applicants, without any interest. All non-successful applicants, shall be refunded back the booking amount within 15 days of holding the draw of lots.
i. If any successful applicant fails to deposit the installments within the time period as prescribed in the allotment letter issued by the colonizer, a reminder may be issued to him for depositing the due installments within a period of 15 days from the date of issue of such notice. If the allottee still defaults in making the payment, the list of such defaulters may be published in one regional Hindi news-paper having circulation of more than ten thousand in the State for payment of due amount within 15 days from the date of publication of such notice, failing which allotment may be cancelled. In such cases also an amount of Rs 25,000/- may be deducted by the coloniser and the balance amount shall be refunded to the applicant. Such flats may be considered by the committee for offer to those applicants falling in the waiting list.
j. The colonizer shall issue advertisements on three separate occassions in case adequate number of applications are not received, after which if the situation continues to persist, the Government shall take a decision on the further continuance of such project on case-tocase basis on individual merits.
What the application fees and hidden charges?
i) Keeping into account the fact that a limited number of projects shall be allowed under this policy and the sale is to be effected at a predetermined rate, the licence fees and IDC shall stand waived off. However, scrutiny fees and conversion charges at prescribed rates shall be levied.
(ii) Similarly, in order to minimize the impact of EDC rates on the viability of such a project, the rates and schedule of EDC applicable on plotted colonies shall be levied on such projects.In order to encourage early completion of projects, in case the colonizer completes the project in 3.5 years from the date of commencement of project and applies for grant of occupation certificate in such period, the payment of last instalment of EDC shall be considered for waiver after grant of occupation certificate.
(i) As a matter of security against any possible delinquencies in completion of the project, the coloniser shall be required to furnish bank guarantee against the total realisation from the project at the rate of 15% for areas falling in the Development Plans of Gurgaon, Faridabad, Panchkula, Panchkula Extn and Pinjore-Kalka and at the rate of 10% for rest of the towns to be furnished within 90 days of the date of commencement of the project. The bank guarantee shall be proportionately released against block-wise occupation certificate obtained by the licencee. However 10% of the total bank guarantee submitted shall be retained to be released at the end of 5 years maintenance period.
(ii) No allotment of flat shall be permitted until the date of commencement of the project. However, the formalities pertaining to the allotment of flats can be initiated at an appropriate date after obtaining the licence to enable the actual allotment of flat immediately after the date of commencement of project.
(iii) Once an apartment is allotted through the procedure as specified above, the same cannot be transferred by the coloniser to any other person by documentation in its records. Such apartments shall also be prohibited for transfer/sale up to one year after getting the possession of the flat to avoid speculation and to provide housing to the genuine persons. Breach of this condition will attract penalty equivalent to 200% of the selling price of the flat. The Penalty will be deposited in the „Fund‟ administered by the Town and Country Planning Department so that the infrastructure of the State can be improved. Failure to deposit such penalty shall result in resumption of the flat and its re-allotment in consultation with the Department.
(iv) The transfer of property through execution of irrevocable General Power of Attorney (GPA) where the consideration amount has been passed to the executor or any one on his behalf, will be considered as sale of the property and same will be counted as breach of terms and conditions of the policy. Penal proceedings as per the prescribed provisions above shall be initiated.
(v) The allotment letter and sale-purchase agreement entered into with the allottees shall also include the parameters prescribed under this policy to maintain complete transparency in the matter.
(vi) The developer shall disclose in the „Application Form‟ as well as in the advertisement, the complete set of specifications to be adopted for finishing/fittings to be provided by the coloniser in the flat, viz., Flooring (Rooms, Kitchen, Toilet& Bathroom, Balcony, Common Areas, staircase etc.); Door & Window frame and panel; Kitchen Worktop & Wall finishing; Toilet & Bathroom fittings and wall finishings; Internal Electrical Wiring, fittings, electrical points etc.; Internal public health Services—pipes and fittings, sewerage and sanitary fittings; Wall finishing; Staircase and Balcony railings, etc.
What the pre defined sizes,pre defines rates,targeted time framer?
|Pre defined sizes||Pre defined rate||Possession time|
|28 sqm to 60 sqm||4000/- SF||4 Years|
Terms & Conditions :
- Payment subject to realization of cheque / demand draft.
- Stamp duty, registrations charges, legal expenses and other miscellaneous charges shall be separately borne and paid by the Applicant, as applicable at the time of registration of the sale deed.
- Government taxes and levies like service tax, VAT, Cess etc., as applicable from time to time will be extra.
- In case of any levy of EDC (including as revised from time to time) or imposition of IDC or other charges or levies that were not applicable at the time of making the application for allotment but became subsequently applicable, such EDC or IDC or other charges shall be applicable to and be paid by the allottee(s) on a pro-rata basis, the amount for which shall be calculated by the Company.
- Terms and Conditions mentioned here are merely indicative with a view to acquaint the Applicant and are not exhaustive. For detailed terms & conditions, please refer to the Application Form and the Apartment Buyer’s Agreement.
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Golden opportunity to realise your dream of owning a house in the millennium city
Under Affordable Housing Projects, private developers are offering flats priced as low as around Rs 13 lakh for 1BHK and Rs 18 lakh for 2BHK.
After witnessing a dip for certain period, Gurgaon’s real estate sector is back on track after the state government introduced Affordable Housing Projects 2013 keeping in mind the lower-middle and middle segments of the society.
Priced as low as around Rs 13 lakh for 1BHK and Rs 18 lakh for 2BHK, it is launched by the government last year under which 23 licences were awarded to the private developers for construction and selling of affordable housing units at the fixed rate of Rs 4,000 per square feet in Gurgaon and Rs 3,600 in Sohna region. The affordable housing projects are proposed in the newly carved sectors of Gurgaon and Sohna region.
In a city where an average cost of a 1,000 square feet two-bedroom apartment at a decent condominium is at least $1.6 million (Rs10,000,000), the developers invited application from people especially middle class who aspire to have their own dream house in millennium city. However, the applicants would be allotted units within 90 days from the proposed deadline of filing application, which is through a lottery system. The application forms are available at Rs1000 for all the affordable housing projects.
In order to lure the potential buyers, full page advertisements are being published in newspapers (which is the mandatory condition as per the state government) and the application deadlines for filing the application are being extended.
“For those who couldn’t fill the application within the proposed deadline, various colonizers have extended the last date of filing the application,’’ said Krishna Sharma, an employee of Gurgaon Realtech consultant.
Nitya Pradhan, a 39 years old housewife whose husband has filed an affordable housing application in her name at one of the real estate consultant office is excited about the project. “It takes a whole life savings to afford a property in the city like Gurgaon. It is one of the rare opportunities which we don’t want to miss. The rest will depend on our luck,’’ she asserted.