Win-Win Situation for Home Buyers, Builders in 2016: Realtors

HYDERABAD: The year 2016 is expected to see a ‘win-win’ situation for both home buyers and builders in Hyderabad, opine realtors and real estate associations.

As real estate scenario in the city picked up momentum this year, realtors expect that further progression will occur in 2016, thus leading to rise in home sales and creating a buzzing market.

“There has been a revival of realty sector this year with both home sales and launches rising. While realty sector got back from brink this year, we expect it to regain its vibrancy next year. We are expecting a growth of about 20 percent in 2016,” said S Ram Reddy, president of Confederation of Real Estate Developers Association of India (CREDAI), Hyderabad.

For the sector troubled with various reasons for the past half decade, a 20 percent growth expectation is a positive sign. But what makes real estate insiders come up with such a promising forecast?

Already there is shortage of office space in Hyderabad now and more multinational companies are setting up their shops here.

As a result more jobs will be created, more people from other areas will come to Hyderabad, leading to rise in home sales.

Already there has been good activity in office space and we hope the same will be replicated in terms of residential segment, opined P Dasharath Reddy, president of Telangana Real Estate Developers Association (TREDA).

Over the past year reputed companies of international fame including Google, ICICI bank, Amazon, Wipro, among others have scaled their operations in Hyderabad, thus creating enormous demand for office space.

It is a natural consequence that demand for office space automatically leads to demand for homes. Besides government’s eagerness to cater to these companies by adopting ‘ease of doing business’ approach is expected to further help the cause of Hyderabad realty.

Therefore real estate developer bodies are forecasting a tremendous rise in home sales and planning accordingly.

“We are sure of rise in home sales in the coming year. However, instead of going for new launches immediately, we are urging our members to first clear existing inventory if any. We are also urging builders not to increase prices and are taking steps to ensure that prices remain stable for the home buyers,” stated Ram Reddy 

 

According to estimates of realty sector bodies, while there is shortage of office space in Hyderabad, the quantity of unsold inventory is also very less when compared to other cities.

With the prices in Hyderabad being cheaper when compared to several ‘Tier 2’ cities, industry experts believe that 2016 will see buzzing activity in Hyderabad in near future.

Transfer of Property to Relatives

Special care should be taken by a person while transferring property to his relatives from the point of income tax. These aspects are discussed in this tip. The sections referred to are of the Income Tax Act, 1961.

If a person transfers only income from a property and not the property itself, then he continues to be assessable to income tax for the income from such property, despite the transfer, whether revocable or irrevocable. This is as per Section 60. Hence any person interested in a bonafide transfer of property to a relative should transfer it so that, not only the income of the property but the property itself is transferred to the transferee.

It is provided by Section 61, that if there is a revocable transfer of assets, then all income arising to any person would be chargeable to income tax as the income of the transferor and be liable to be included in his total income. However, even in respect of a revocable transfer of property, there is an exemption, viz. Where any income arises to the transferee by virtue of a transfer by way of a trust, which is not revocable during the lifetime of the beneficiary or in the case of any other type of transfer, such as by way of gift, etc., where it is not revocable during the lifetime of the transferee. However, one essential condition to be fulfilled in such a case (u/s 62), is that the transferor should not derive any direct or indirect benefit from such income in either case. It should be noted that, as and when the power to revoke the transfer arises, all income by virtue of such transfer would be chargeable as the income of the transferor and would be included in his income. The expression “transfer” includes any settlement, trust, covenant, agreement or arrangement. The expression “relative” for the purpose of the Income Tax Act, Section 2(41), in relation to an individual, means the husband, wife, brother or sister or any lineal ascendant or descendant of that individual, like father, son, etc.

Normally, the income of any property irrevocably transferred by the transferor to the transferee, should be assessed in the hands of the transferee only. But there are certain exceptions provided in Section 64(1) for the clubbing of income, where the transfer is made to certain close relatives without any adequate consideration. For example, where the transfer is without any adequate consideration, made by way of gift, then the transferor should not make any transfer of a property to his spouse and daughter-in-law, either directly or indirectly. Thus, if a property is gifted to any of the aforesaid persons by an individual, then the income from the property transferred, would continue to be includable in the total income of the transferor as per Section 64(1). It may be noted here, that a person can now make gifts of immovable property to one or more persons without any upper limit. But care must be taken to avoid the clubbing provisions as mentioned earlier. However, there is a tax planning device by which the clubbing of the income of an asset transferred to a close relative can be avoided. Thus, a married lady should not receive any gift from her husband, father-in-law and mother-in-law. If, however, gifts are received by a lady just before marriage, as pre-nuptial gift of property, it will not be liable to be included, as held in Philip Thomas vs CIT 49 ITR (SC) 97 by the Supreme Court, where such pre-nuptial gifts are made to an unmarried lady only.

Under the Hindu Law, a co-partner can impress his self-acquired property with the character of a joint Hindu property by making a declaration to that effect. However, Section 64(2) provides, that from January 1, 1970, if any person transfers his self-acquired property to his Hindu Undivided Family (HUF), then the income from such transferred property would still be included in his own individual assessment. Hence, this should be avoided. However, a transfer can still be made to a separate branch of the HUF, i.e. of the married son, grandson or brother, etc., without attracting Section 64(2). In this manner, a separate income tax file of the separate branch of the HUF of the married son or the married brother, etc. could be created by an individual through a special gift of property.

Sometimes, properties are transferred for the benefit of a future relative, like the would –be wife of a son or would-be husband of a daughter, etc. Such a trust, for the benefit of an unborn or future relative is valid under the Transfer of Property Act. It has also been held by Courts in India, that such trusts for unborn persons are also valid. However, it is provided under Section 164(1), that where such a transfer is made, the income from such a transfer generally made to close relatives, unborn, indeterminate or unknown at the time of transfer, are liable to tax at the maximum rate of tax. But an exception is provided under clause (1) of first proviso to Section 164(1) whereby, if such a trust is the only trust made for the benefit of the unknown person and the beneficiaries do not have any other taxable income, then the income of such a trust is assessable at the normal slab rates applicable to an Association of Persons, that is, like an individual. This is also confirmed by the CBDT circular No. 577, dated September 4, 1990.

A discretionary trust can be created through the provisions of a ‘Will’ in such a manner, that it is the only trust so declared by the Will, so that it becomes assessable as a separate taxable entity, liable to tax at the slab rates applicable to an AOP or an individual and not at the maximum rate of tax. Such a trust could provide for property to be given to the wife, children,

Taxation : Transfer of Property to Relativesgrandchildren, future grandchildren, great grandchildren, etc., of the testator, i.e. the person making the Will.

While making a transfer of immovable property to relatives in general and other taxpayers in particular, a person would derive immense benefit by observing the aforesaid principles of Income Tax Law.

Commercial Real Estate

కమర్షియల్స్ హౌసింగ్
2015 సమయంలో భారతదేశం యొక్క ఆఫీస్ స్పేస్ శోషణ 35 మిలియన్ చదరపు అడుగుల వద్ద నిలిచింది - దేశం యొక్క చరిత్రలో రెండవ-అత్యధిక సంఖ్య 2011 తరువాత 2011 లో ఆఫీస్ స్పేస్ కోసం డిమాండ్ ప్రపంచ ఆర్థిక సంక్షోభం తర్వాత తక్కువ అద్దెలు యొక్క ప్రయోజనాన్ని ఆక్రమించే నుండి వచ్చింది. ఈ సమయంలో, అయితే, అది వారి పెరుగుదల ప్రణాళికలు అమలు కార్పొరేట్లు ఫలితమే.
బాణలిలో భారతదేశం ఖాళీ ఇప్పటికీ 16% వద్ద నిలుస్తుంది అయితే, వాస్తవిక ఖాళీ నిజానికి చుట్టూ 8-9% ఉంటుంది - మొత్తం ఖాళీగా సరఫరా ఎల్లప్పుడూ కార్పొరేట్ ఆక్రమించే కోసం సంబంధిత కాదు. వాటిని చాలా వర్గాలలో విక్రయించి స్వాభావిక ప్రతికూలతలను మరియు కనెక్టివిటీ సమస్యలు స్థలాలలో లేదా ఉన్నాయి, లేదా ఇటీవలి కాపురస్తుడు నిష్క్రమిస్తుంది నుండి వైదొలగాడు చేశారు మరియు ఇకపై గ్రేడ్ ఎ అవసరాలు మ్యాచ్ గ్రేడ్ ఎ భవనాలు పరిగణలోకి లేదు ఎందుకంటే ఈ ఉంది.
ఇటువంటి పూనే, బెంగుళూర్, హైదరాబాద్ మరియు చెన్నై వంటి నగరాల్లో కేవలం 5-10% ఒక ఖాళీ రేటు, పెరుగుతున్న డిమాండుకు తాజా సరఫరాను అవసరాన్ని ప్రాంప్ట్ కలిగి. భూమి మరియు నిర్మాణ వ్యయం పెరుగుతున్న మాత్రం, అద్దెలు డెవలపర్లు గురించి 20% IRR పొందవచ్చు ఇక్కడ ఒక పాయింట్ చేరుకున్నారు లేదు, ఎందుకంటే డెవలపర్లు వాణిజ్య ప్రాజెక్టులు నుండి దూరంగా shying చేశారు. కనీసం మంచి మార్కెట్లలో - అద్దెలు వేగంగా అధిరోహించిన అయితే, డెవలపర్లు నిర్మిస్తోంది ప్రారంభమౌతుంది.
రెంట్స్ పేస్ వేగంగా టైర్-నగరాలలో ద్వితీయ వ్యాపార జిల్లాలుగా (SBDs) మరియు కొన్ని పరిధీయ వ్యాపార జిల్లాలుగా (PBDs) లో స్థాపించబడిన కేంద్ర వ్యాపార జిల్లాలు (CBDs) లో కంటే 2015 లో భారత నగరాల్లో పెరిగింది. 2015 లో వివిధ నగరాల్లో మరింత లీజింగ్ చర్యను సూక్ష్మ మార్కెట్లు తక్కువగా యిష్టపడే ప్రాంతాల్లో అధిక ఖాళీ రేటు చూస్తారు, 2016 లో చర్య చూడండి కొనసాగుతుంది. సరఫరా ఎండిపోతుంది మరియు ఖాళీ మరింత పడిపోతుంది రాగానే ఆక్రమించే అలాగే, ఈ స్థానాల్లో ఖాళీలు చేపట్టడానికి ప్రారంభమౌతుంది.
2015 లో, ఆఫీస్ స్పేస్ డిమాండ్ ప్రధానంగా ఐటి / ITES, కామర్స్, మొదలు పెట్టడంతో మరియు పెద్ద కన్సల్టింగ్ సంస్థలు నడిపారు. అయితే, ఈ కూడా నిర్మించారు టు దావా (BTS డిమాండ్ చూస్తారు 2016 మరియు 2017 తదుపరి సంవత్సరంలో ఏం చేయాలి - ఎఫ్ఎంసిజి, బిఎఫ్ఎస్ఐ (ఫ్రంట్ ఆఫీస్) వంటి అనేక ఇతర రంగాలలో ప్లేయర్స్, తయారీ, టెలికాం, ఫార్మా మార్కెట్ లోకి రాలేదు ) లక్షణాలు, పెద్ద ఐటి ఆక్రమించే ముఖ్యంగా నుండి. 2015 లో శోషణ 2011 వరకు పోలి ఉంటుంది, ఇది కొత్త మరియు పాత భవనాలు అంతటా పంపిణీ చేయబడుతుంది; గతంలో, అది ఎక్కువగా కొత్తగా పూర్తయిన భవనాలు ఉంది.
డిమాండ్ ఆక్రమించే సానుకూల బయాస్ వెలువడ్డాయి, 2016 యొక్క అత్యంత నిలకడగా ఉండిపోతుంది. వాణిజ్య ప్రదేశాలు తక్కువ సరఫరా మరియు డిమాండ్ కారణంగా, కార్పొరేట్ ఆక్రమించే వారి విస్తరణ ప్రణాళికలు సంస్థ కొనసాగుతుంది. 2016 కిరాయి ఖాళీలు కొనసాగుతున్న డిమాండ్ తెచ్చే, నాణ్యత సరఫరా తక్కువగా ఉంటుంది. ఈ అన్మెట్ డిమాండ్ గ్రేడ్-బి కార్యాలయ సముదాయాలను అధిక occupancy ప్రతిబింబించేలా ఉంటుందని అర్థం.
ఎఫ్డీఐ డెవలపర్లు ప్రొఫైల్, అలాగే యాజమాన్యం నమూనాలను రియల్ ఎస్టేట్ రంగం పుంజుకోవడం తరువాత, మారుతున్న ప్రారంభమౌతుంది. ఈ భారత డెవలపర్లు యాజమాన్యం అవసరాలు ఒక డ్రాప్ మరియు PE నిధులు మరియు MNC డెవలపర్లు యాజమాన్యం పెంపుకు దారి తీస్తుంది.

Government of Andhra Pradesh

Realtors begin business in Telangana as govt plans more districts

Telangana government has decided to carve out new districts as the existing 10 districts in the state which have a population of 35 lakh each. The ideal population of each district should be about 19 lakh.

Chief Minister K Chandrasekhar Rao, who, during the election campaign, promised that more districts would be created, has appointed a committee to make recommendations in this regard.

One of the advantages of having smaller districts is better and more efficient administration which ensures that all the government programmes and schemes reach out to every citizen.

However, even before the government is to finalise the new districts, the ministers and MLAs of the ruling Telangana Rashtra Samithi (TRS) are busy announcing possible new district headquarters. This is incentive enough for the realtors across the state and reports suggest that the land prices in Medak, Siddipet, Sangareddy, Vikarabad, Jagital, Jangoan, Mancherial, Nagarkurnool and many others have shot up.

The land which cost a few lakhs per acre has now crossed Rs 1 crore mark with the realtors taking up layout development by purchasing agriculture and waste lands. There are no major restrictions in village panchayats over conversion of land from agriculture to residential unlike under the Greater Hyderabad Municipal Corporation and Hyderabad Municipal Development Authority limits, which is proving to be a boon to real estate business.

Not surprisingly, the maximum realty boom is in Medak, the home district of the CM which is represented by his nephew and prominent TRS leader T. Harish Rao. On a few occasions, the CM had disclosed his plan to trifurcate the district as Medak, Sanga Reddy and Siddipet and there was also a hint that Medak district will have Medak town as its headquarters A 500 sq. yard plot in Autonagar in Medak was recently sold for Rs 1.22 crores, a price that many would find hard to believe. Accorded to reports, a 300 sq. yard plot in Ajampura area in Medak town was recently sold for a little over Rs 1 crore, with each sq. yard selling for Rs 35,000, which is almost on par with land rates in Hyderabad.

Land prices are shooting up in other towns which are also likely to become district headquarters with realtors making a beeline to panchayat offices to secure permissions for layouts to develop plots to sell them at an opportune time and price.

Future of Real Estate in Hyderabad and Telangana Region after the formation of new Telangana State

With the passing of Andhra Pradesh Reorganization bill on 18th Feb 2014, Telangana is all set to become the 29th state in the country.  It was a forgone conclusion that the new state will be formed, after the Congress Working Committee resolved in July 2013, to proceed with the division of the state.

To get political mileage and votes, it was essential for the Congress to push through the bill before the upcoming General Election.   With it’s political future in tatters in Seemandhra, it’s only hope was to get votes in Telangana on the strength of the perception that it is solely responsible for making the dream of the people of Telangana, come true, notwithstanding the years of agitation carried out by the TRS.

eal Estate Market Outlook

Price movement in the Real Estate market is very much similar to that in stock market. Just like the stock market discounts the impact of various matters affecting a company, well in advance of the AGM, the Real Estate market too discounts such impacts much earlier. It does not wait for the D day, to show where it stands.

Considering the historic trend we can expect steady increase from current price level and the year 2014 should end with around 10% increase, with respect to 2013.

The prices of land and plots also will appreciate during the year.

Once the Telangana state presents its budget, everyone in Telangana including Hyderabad will forget about Andhra, that being a different state!  The prices of real estate in Hyderabad will zoom up to match with those in Bangalore & Chennai.

The dream period of  low prices of properties in Hyderabad is almost over!      A new chapter will open soon, which will be bad for  buyers, since they have to pay much more that they were used to.


T State: KCR sees boom in real estate prices

Hyderabad, March 20 (Hyderabad Deccan News): Telangana Rashtra Samithi president K Chandrasekhar Rao on Sunday sought to dispel any apprehensions that the real estate prices would crash in and around Hyderabad after Telangana state is created.
a€oeOn the contrary, the real estate would see a boom with prices skyrocketing,a€ KCR stated.
Speaking at a function to welcome members of the Communist Party of India (Marxist) in the TRS fold, KCR said that Hyderabad would be recognised as a a€˜happeninga€™ city on the international map. He said that with the influence of leaders from Seemandhra regions coming to an end after the formation of Telangana, investors would not hesitate to come to the city and the newly carved state would see dramatic development.
Reminding that the erstwhile Nizama€™s Dominion was the richest in the world, the TRS chief said that the Seemandhra rulers had over the years exploited the region and made money for themselves.
Promising the people of the region that they would be greatly benefitted, the TRS chief reminded that taxes paid by them to the Nizams had made the region the wealthiest in the world. The same situation can be replicated after Telangana is formed, he stated.
Claiming that the Telangana region was neglected a€˜totallya€™ after the formation of Andhra Pradesh on November 1, 1956, KCR said that the sustained exploitation had resulted in Mahabubnagar district alone losing about Rs one lakh crore in revenues.

The TRS chief also pointed out that former prime minister Jawaharlal Nehru had assured the Telangana people that they can take a€˜divorcea€™ from Andhra Pradesh as and when they chose to. He said that the time has come to end the