Look forward to receiving your views so that others can also benefit.
Regards,
Sandeep Sadh
CEO,
Mumbai Property Exchange.com
ssadh@mumbaipropertyexchange.com
Labels: Builders, Increase, Property Prices, Rates, Trend, Under Construction
]]>Out of the 52 Clearances required by a Builder Finally the auspicious figure of 51 Remain and i guess, to bring them down further is a battle of sorts as our Government still does not have a vision and what they can do to make this City better then what it is today.
Many are thinking with ULC gone, there will be supply in abundance of at least the land and with Newspaper Headlines of 17000 Acres etc. to be freed, it will be intersting to see how much really comes out in the open market for sale and how soon.
The markets may be gripped for the next few weeks with this Hot News but there is more than this will be happening in Real Life. People if they go to buy homes in builder offices today will not get any reduction, re-sale prices will not come down, besides speculation and heavy head lines and enough footage on the small screens of NDTV, CNBC etc. will be eaten up by Builders and Industry Experts.
One must understand Ground Realties before taking into consideration the impact of this decision which will be more felt in further suburbs, outside Mumbai and 2 tier and 3 tier cities. Also, a lot of land is still under forced or framed litigation which needs to come out and it will be interesting once again to see a sudden eruption of a new plot of land from the centre of the city which was long hidden.
Buyers looking to buy property today should not worry much as if you need a home today, you need it now, you cannot wait endlessly to see what transpires hereinafter.
The markets may temporarily stabilise as it was already due to post the Diwali Frenzy and the Builders have already escalated rates all across Mumbai, Thane and Navi Mumbai.
I guess, the only respite here is that the flat buyers may not have to do multiple agreements for projects which required the mandatory ULC rules applicable.
Sandeep Sadh
CEO
Mumbai Property Exchange.com
Labels: Builders, Government, Infrastructure, Mumbai, Property Prices, Suburbs, Thane, ULCA, Under Construction
]]>I invite comments on this from our viewers....Rgds Sandeep Sadh
NEW DELHI: Indians seem to be living way beyond their means. An extensive survey has found that more and more households seem to be borrowing not for creating assets like building a house or buying a car, but to meet consumption needs ranging from food, transport and medical bills to even repaying loans.
Consumers using credit facilities, probably credit cards, for purchasing fuel and renovating their houses constitute the biggest chunk of the borrowings, a soon-to-be released survey by National Council for Applied Economic Research and Max New York Life Insurance said.
The findings confirm the trend towards urban India's transformation into a consumerist society with diminished stigma associated with debt. Thus, while housing loan business may be big in terms of value but in terms of number of loans, it is still the odd renovation expenditure or a loan to buy jewellery at the time of a weddings that dominates.
Also, while banks may be pestering you with calls offering a variety of loans, many urban households don't mind tapping the much-maligned moneylender or friends and relatives to borrow for meeting routine expenses.
Though only 7.2% of urban households borrow from moneylenders, compared to nearly 21% in rural areas, the figure is significant because of the widening institutionalised credit bouquet. Then again, one-third of city borrowers who approach moneylenders do so for meeting routine expenses, the Indian Financial Protection Survey which visited 63,000 households said. In villages the number is a little lower at 25%.
For Indian households, food makes up over half the household budget, followed by transport (10%) and education (7%). Urban households spend 45% of their income on food while the figure for rural households is 55%.
Surprisingly, spending patterns in urban and rural India are more or less similar, with education being the only major point of difference.
Even the spend on durables in rural areas, in what marks good news for white goods companies, has caught up with the pattern in cities. Though 7% of the household spending is on education, only 1.5% of the families have borrowed to finance education. For this purpose, banks, with a share of 19%, are the most important source.
In rural areas, 36% of the households borrowed from friends and relatives to meet education-related expenses.
Labels: Bank Loans, Increase, Property Prices, Rates, Trend
]]>Sandeep Sadh
Labels: Increase, Infrastructure, Mu, Property Prices, Rates, Trend
]]>Tax benefits, in respect of repayment of the principal amount and interest payments, are provided under Sections 80C and 24 of the Income tax Act, 1961, respectively. For claiming a deduction of the principal amount, the loan can be taken for purchase or construction of the house property and from specified lenders, such as central or state government or any bank (including a cooperative bank).
Further, deduction for interest can be claimed not only for loans taken for purchase or construction of house property, but also for repair, renewal or reconstruction of the existing house property.
Let us illustrate. Sanjay Bhatt takes a bank loan of Rs 20lakh for construction of residential house property (to be used for self-occupation) on September 1, 2006. For the sake of simplicity, let us assume that he is required to repay this loan in monthly installments of Rs 25,000 (comprising Rs 15,000 of principal amount and Rs 10,000 of interest) over a period of 10 years. The construction of the property is to be completed on September 30, 2009.
PRINCIPAL
The borrower can claim a deduction of the principal sum and stamp duty, registration fee and other specified expenses incurred for the purpose of transfer of the house property to him. The deduction can be availed starting from the financial year in which the house property is purchased or the construction thereof is completed up to a maximum limit of Rs 1,00,000 per year.
Therefore, from financial year 2009-10 onwards, Mr Sen can claim deduction for the actual principal payment or Rs 1,00,000 per year, whichever is lower.
INTEREST
The borrower can also claim a deduction for the interest due on the housing loan, starting from the financial year in which the purchase or construction or the repair, renovation etc take place.
In case of self-occupied property, the borrower can claim interest up to Rs 1,50,000 per year on loan taken on or after April 1, 1999, for acquisition or construction of the property, provided the acquisition or construction is completed within three years from the end of the financial year in which the loan was taken. For loans taken before April 1, 1999, the deduction is Rs 30,000 per year.
In case of let out property, the borrower can claim interest on actual basis, as no maximum limit is prescribed. Further, interest incurred for the pre-acquisition or pre-construction period, can be claimed equally over a period of five financial years, starting from the year in which the property is acquired or construction is completed. However, the total interest deduction cannot exceed Rs 1,50,000 a year.
In Mr Bhat's case, deduction for the interest of Rs 1,20,000 a year can be claimed from FY10 onwards. The interest for the pre-construction period (November 1, 2006 to March 31, 2009) being Rs 2,90,000 (ie, Rs 10,000 per month x 29 months) can be claimed as a deduction in five equal instalments of Rs 58,000 per year from financial year 2009-10 onwards, subject to aggregate limit of Rs 1,50,000 a year.
HOW TO CLAIM
The above deductions can be claimed by the borrower on the basis of a certificate issued by the lending institution stating the principal amount paid and the interest amount due for that particular financial year.
OTHER ASPECTS
A few other points which a borrower should keep in mind in the context of tax benefits are as follows:
Sale of property: If the house property is sold before five years from the end of the financial year, in which possession of such property is obtained, the deduction allowable for principal amount will no longer be available and deduction allowed in earlier years for the principal sums will be considered as the borrower’s income of the financial year in which the property is sold.
Pre-payment of loan: In case of complete or partial pre-payment of loan, the above provisions would continue to apply up to the year the loan is alive. Once the loan is entirely paid, no tax benefits can be claimed in subsequent years.
Property under construction: Principal amount repaid before construction is not eligible for deduction. However, pre-construction interest can be claimed in the period after completion of construction.
Labels: Bank Loans, Capital Gains, Home Loan, Taxation
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Ø Choosing a Location – Each individual usually understands which location is most suitable for him and he has to further decide based on his family needs and of course “Budgets”, seeing today’s market conditions. It is important that you look at a location in regards to connectivity from Main roads, Highways, Railways Stations, Schools, Hospitals, Markets, Your Office and last but not the least, malls and entertainment hubs which have also carved a niche in our lives in recent years. Any property in a location which is far and wide may be a bit cheaper but with a potential of future development in the area, it can become a good investment but for present, if the property is ready possession you may have to go through some inconvenience which is worth the wait at times. Do not compromise on safety and security elements while buying a home for the family. “Connectivity” is the Buzz word in property and fortunes change with the same and understand the impact of Infrastructure Development happening in your neighbourhood.
Ø Price Analysis – In the past 2-3 years, prices in most of the locations have become double or in certain locations the prices have jumped beyond that, hence you need to understand the prevailing prices of projects in these locations and usually each location has multiple projects rating from a Top of the Line Developer to an average developer and the price difference can be as much as 30% or above. So before you set sail, please check on the internet or local papers about the prices and the proposed developments in the area. Visit the offices of these developers with your trusted and experienced real estate agents or if you are visiting directly, don’t be hesitant to ask straight questions on prices and negotiations. Most of the Builders negotiate today marginally and it is only when you are serious about the property and your cheque book is on the table things start looking a bit different. A lot of Builders today give you cost sheets which tells you the Down Payment, Total Value, Incidental Expenses, Car Parking Charges, Stamp Duty and Registration values, time frame to pay the balance amounts and details on slab payments etc. All these are pretty important for you to consider at the time of booking the property as you are committing here.
Ø Bank Loan – Bank Loans have become expensive these days but they still remain the integral portion of your funds to buy the dream home. It is essential for you to be pre-qualified and have a personal eligibility sanction letter with you., This letter will highlight that you are entitled to a loan of X amount and your monthly EMI will be Rs. X for X no. of Years. If you are equipped with this letter, you will have no problems in buying any property as you will know both the Disbursement Values and the Monthly EMI you need to pay and based on both these figures you can take a calculated decision. Getting a Sanction letter is a process of nearly more than a week, so if you are not pre-approved, I would recommend that you should contact your Bankers or Housing Finance Companies. This letter can be used as a negotiation tool with a few builders as well, as they will be happy to have a client whose half home work is done and ready.
Ø Property Papers – Usually, with renowned builders you do not face legal problems, but you need to watch out here, you cannot be swayed by a fancy looking property with a defective title or certain clearances which are of importance are missing at the time of purchase. You would require to look at a document called a “CC – Commencement Certificate”. This permission is given by the BMC to the Builders to construct the proposed building. There are many more documents like Title Deeds, Conveyance of the land in favour of the Builders, Title Certificate from a Lawyer, but a lot of Builders may not be open to show you these papers directly at the time of enquiry, however, they will show you these papers if you require, if you are buying the property. But then if you cannot understand them, you will have to hire a professional lawyer to review them for you, which means both time and money. The easiest way out is to go for a home loan and a lot of Banks and there DSA (Direct Selling Agents) have tie ups with the Builder Offices to give Home Loans and hence it is in your interest to take up a Home Loan. If you do not want to take 80% of the property value, you can just take a lower amount and be more secure and thus have a third party interest created here. This way at least that you will be doubly sure that your property papers are in order even though your builder did not give you many documents or you do not understand this much the Bank would by default have done the homework.
Ø Construction and Planning – It may be of help that at the time of buying a home and especially if it is an under construction property, see and feel the quality of the walls, brickwork, finishing, tiling, plumbing and light fittings. This might give you an idea of shape of things to come. Study the plan and the layout of the property well and see the carpet area. In Mumbai, the wind usually comes from South West and West and any westerly flat will give you more light and breeze. However, ignore this if you are getting a better view in another direction and if you are not fussy about Vastu and the entry and exit directions. Watch out for the buildings around, ideally go to Google Earth and pinpoint the location and see an aerial view of the property which will give you a sense of surroundings more and envisage the view from your short listed property. See the Sample Flat and ask questions as to what comes with the apartment and what does not.
Ø Price Analysis – In the past 2-3 years, prices in most of the locations have become double or in certain locations the prices have jumped beyond that, hence you need to understand the prevailing prices of projects in these locations and usually each location has multiple projects rating from a Top of the Line Developer to an average developer and the price difference can be as much as 30% or above. So before you set sail, please check on the internet or local papers about the prices and the proposed developments in the area. Visit the offices of these developers with your trusted and experienced real estate agents or if you are visiting directly, don’t be hesitant to ask straight questions on prices and negotiations. Most of the Builders negotiate today marginally and it is only when you are serious about the property and your cheque book is on the table things start looking a bit different. A lot of Builders today give you cost sheets which tells you the Down Payment, Total Value, Incidental Expenses, Car Parking Charges, Stamp Duty and Registration values, time frame to pay the balance amounts and details on slab payments etc. All these are pretty important for you to consider at the time of booking the property as you are committing here.
Ø Bank Loan – Bank Loans have become expensive these days but they still remain the integral portion of your funds to buy the dream home. It is essential for you to be pre-qualified and have a personal eligibility sanction letter with you., This letter will highlight that you are entitled to a loan of X amount and your monthly EMI will be Rs. X for X no. of Years. If you are equipped with this letter, you will have no problems in buying any property as you will know both the Disbursement Values and the Monthly EMI you need to pay and based on both these figures you can take a calculated decision. Getting a Sanction letter is a process of nearly more than a week, so if you are not pre-approved, I would recommend that you should contact your Bankers or Housing Finance Companies. This letter can be used as a negotiation tool with a few builders as well, as they will be happy to have a client whose half home work is done and ready.
Ø Property Papers – Usually, with renowned builders you do not face legal problems, but you need to watch out here, you cannot be swayed by a fancy looking property with a defective title or certain clearances which are of importance are missing at the time of purchase. You would require to look at a document called a “CC – Commencement Certificate”. This permission is given by the BMC to the Builders to construct the proposed building. There are many more documents like Title Deeds, Conveyance of the land in favour of the Builders, Title Certificate from a Lawyer, but a lot of Builders may not be open to show you these papers directly at the time of enquiry, however, they will show you these papers if you require, if you are buying the property. But then if you cannot understand them, you will have to hire a professional lawyer to review them for you, which means both time and money. The easiest way out is to go for a home loan and a lot of Banks and there DSA (Direct Selling Agents) have tie ups with the Builder Offices to give Home Loans and hence it is in your interest to take up a Home Loan. If you do not want to take 80% of the property value, you can just take a lower amount and be more secure and thus have a third party interest created here. This way at least that you will be doubly sure that your property papers are in order even though your builder did not give you many documents or you do not understand this much the Bank would by default have done the homework.
Ø Construction and Planning – It may be of help that at the time of buying a home and especially if it is an under construction property, see and feel the quality of the walls, brickwork, finishing, tiling, plumbing and light fittings. This might give you an idea of shape of things to come. Study the plan and the layout of the property well and see the carpet area. In Mumbai, the wind usually comes from South West and West and any westerly flat will give you more light and breeze. However, ignore this if you are getting a better view in another direction and if you are not fussy about Vastu and the entry and exit directions. Watch out for the buildings around, ideally go to Google Earth and pinpoint the location and see an aerial view of the property which will give you a sense of surroundings more and envisage the view from your short listed property. See the Sample Flat and ask questions as to what comes with the apartment and what does not.
I am sure, keeping in mind these few parameters; you will successfully be able to locate your dream home. Best of Luck!!!
Sandeep Sadh
Mumbai Property Exchange.com
Labels: Bank Loans, First Home Buying Guide, Rates, Under Construction
]]>Sandeep Sadh
Labels: Increase, Investment, Property Prices, Stock Market
]]>http://www.mumbaipropertyexchange.com/bi_news.asp?news=618
Labels: IT, Mumbai, Property Prices, Pune
]]>Do you know how has this become possible for a vast number of young Indians to own their dream homes? This was made possible because of lower interest rates and most importantly tax sops.
Why are tax sops so important?
Over the last few years, the major tax sop available to the employees was in the form of a standard deduction, which is now withdrawn. There are virtually no tax sops available to the employees, who are having significant taxable income and tax liability.
The investment opportunities for the purpose of tax planning are also limited with a cap up to Rs 1 lakh only. Hence, housing loans have become an attractive proposition to save taxes, apart from other equally important aspect like fulfilling the dream of owning a house.
What are the tax sops available through housing loans?
The first and the foremost tax sop is the interest amount that you pay on housing loans. The interest on housing loans in the initial years is the major component of the EMI you pay. The interest may exceed the rental income from house property, resulting in loss from house property.
In the case of self occupied residential houses, the entire interest is the loss from such house property. This loss can be set off against income from other heads such as salaries, business or profession.
The next important tax sop is the installment paid on housing loans. The installments are allowed as a deduction from the gross total income on par with other tax saving investments u/s 80C of the Income Tax Act.
What kind of housing loans are eligible for tax sops?
Housing loan can be taken for the purpose of acquiring or constructing a property. Housing loan taken for the purpose of repair, renewal or reconstruction of the house property is also eligible for tax sops.
What kind of house properties is considered for deduction of interest?
All kinds of house properties are considered for allowing the deduction of interest on loans. The gross annual value from house property is considered for the purpose of allowing deduction of interest on loans.
How is gross annual value from house property determined?
If the house property is let out, the fair rental value of such house property is considered as gross annual value.
Tips for the first time home loan borrower?]]>
We had agreed for redevelopment as all the nine buildings in our colony were constructed in 1965-67. But we got into trouble with RNA Builders (AA) when they failed to keep the promises made in the development agreement. As per the agreement, the builder had offered us 355 square feet carpet area in a eight-storey building. But now the builder wants to construct 12-storey buildings. In the redevelopment plan, there was a park but now there is no mention of any park.
We had agreed to an eightstorey building as the monthly maintenance would have worked out to below Rs 1,000. In a 12-storey building, we will have to pay atleast Rs 1,500 a month for maintenance. People in the building cannot afford such high rates. Left with no option, the residents have now moved court. The court has asked both parties to get an architect. We are still looking out for one.
Sunder Nagar Cooperative Society Union Ltd comprising members of all nine buildings was formed in August 2004 to look into the welfare of residents. But the union members are now working in connivance with the builders. The redevelopment agreement was not even registered. This we found out through the Right To Information (RTI) Act. It was in February this year that we got the redevelopment agreement registered.
Building numbers 2, 4 and 7 have already been broken down by the builder and foundation work is underway. We at building number 8 have told the builder to take us out of the redevelopment project so that we can repair it ourselves. Redevelopment of old buildings is good, but residents sometimes get conned by the builders.
In our case, most of the residents are not well educated so they did not know what they were getting into.]]>
Real Estate Gurgao]]>