Immovable properties can now be transferred to blood relatives without any stamp duty.

All the immovable properties such as; land, house or flat can now be transferred to blood relatives or children’s without any stamp duty on registration. It is expected that this will be the major relief for millions of families who are living in Maharashtra, as now onwards they don’t have to pay 5% of the ready reckoner rate of the property as stamp duty.

Revenue minister Eknath Khadse, make the announcement by saying that, an affidavit on a Rs 100 stamp paper would be sufficient. He later changed his statement by stating that now government no longer deals in Rs 100 stamp paper for property matters, so you need to pay Rs. 500. While in other decisions he announced in the House on Wednesday, that those who own 500sq ft or smaller homes than this, now they do not have to pay the increased property tax and now government will allow them to twice the transfer of development rights to a landowner in lieu of land surrendered for a public amenity.

For the reply on a discussion on the budgetary allocation for urban development department, Chief Minister Devendra Fadnavis stated that the government is framing a new policy, as TDR will be indexed to the ready reckoner rate to, it will prevent them to earn a windfall from the use of TDR of one area in another. The main aim of decision is to increase the TDR as it was taken as the new Land Acquisition Act has increased compensation, whereas; the RR rate of the area where it is being utilized will apply, the more he added.

Khadse state that the decision to waive stamp duty on immoveable property being passed to heirs will cost the exchequer Rs 350 crore annually, as a construction amenity TDR or incentive TDR will be offered to a land-owner in addition to the regular TDR if he develops an amenity and hands it over to the local body. For land and other property, the ready reckoner rate has gone up considerably even if the owner does not sell them at that rate in the market.

For this we have received a large number of complaints from every part. They have been demanding to know that why should they need to pay a huge amount to government while transferring a property to their own blood relatives or children’s. Hence, Government of Maharashtra has decided to do away with the stamp duty,” he said.

Short of property tax collection

It is expected that one of the civic body, Nashik Municipal Corporation (NMC) may fall short of property tax target by 32 per cent in current financial year due to poor response of tax defaulters. Recently, NMC has already issued warrants and notices to the tax defaulters and is planning to confiscate movable and immovable properties from next month.

As per records, civic body had set a target of Rs 110 crore for property tax collection in current financial year. It is recorded that till March 15 in the current fiscal, Nashik Municipal Corporation (NMC) collected Rs 67.65 crore against Rs 65.50 crore during the corresponding period in the last financial year 2013-14. The NMC’s property tax revenue is expected to touch Rs 75 crore by the end of March 31, however while speaking with media channel of the of the official stated that “In current year our property tax collection has increased by 4 per cent to Rs 67.65 crore by March 15 as compared to the revenue during the same period last year. But still we can achieve only 68 per cent of our tax collection target for this financial year as only 15 days are left for the end of the fiscal.”

Property tax collection statics:

For the duration of 2013-2014, the Nashik Municipal Corporation (NMC) had set a property tax collection target of Rs 105.68 crore out of which it collected Rs 71.74 crore and it had collected Rs 62.73 crore during 2012-13. When it comes to different divisions, so there are total 3.80 lakh properties across six divisions of the civic body – 73,108 properties in Nashik East, 40,482 properties in Satpur, 66,205 properties in Nashik Road, 35,529 in Nashik West and 86,871 properties in Cidco divisions.

One of the official of NMC states that “We have taken lawful action against defaulters as we have issued notices and warrants to defaulters to pay their dues by March 31. We will start confiscating movable and immovable properties from April.” According to reports, NMC has issued warrants to defaulters of 2,144 property owners in past two months by giving them an ultimatum of 21 days to pay their dues. Till now 1,000 defaulters have paid full and partial payment amounting to Rs 2 crore, as earlier we were issued a final notice to 30,000 property tax defaulters giving them a deadline of 15 days to pay taxes from the date of issuance of notices.

Small properties will be excluded from new tax system

In a positive move to bring relief to around 8 lakh households in the city, BMC has decided to exclude structures below 500 sq ft from the capital value based property tax system once again. They will now continue to pay property tax based on the old system of ready reackoner rates.

This fresh proposal was tabled before the civic general body meeting by leader of the house Trishna Vishwasrao (Shiv Sena) as the made a suggestion that structures under 500 sq ft should be excluded from the capital value based property tax system as many of these were Maharashtrian households. According to new property tax proposal the BMC had decided to charge properties below 500 sq ft as per the new system, at the standing committee meeting on Thursday. This BMC proposal passed unanimously in the civic general body meeting however, now proposal will be sent to the state government for its final nod. If BMC proposal will get the nod from state government, so it will continue for five years.

As per the Civic officials, with new changes in property tax system BMC would lose additional revenues of Rs 55 crore by excluding below 500 sq ft structures from the system, as civic body was earning Rs 148 crore from these structures under the old ready reckoner system.

As per the Congress corporator Pravin Chheda, “It was the proposal of earlier Congress government which had given exemption to people to live in structures of 500 sq ft from the capital value based property tax system. So we demanded adding this to the new proposal.” As we all know that with effect from April 1, 2010, the BMC was adopted capital value based property tax system, and according to it the tax was about calculated on the basis of capital value of the property. And after that state government had decided to exempt structures below 500 sq ft from it for the five-year period of 2010-15.

Extra FSI can hit the Redevelopment work

Recently, the proposal of Maharashtra government to put extra charge on builders more for the extra 0.33 floor space index (FSI) given for housing projects is likely to hit redevelopment work in Mumbai‘s suburbs. The Maharashtra government has increased the ready reckoner rates by an average 15% every year since 2008 and now government is now considering linking the premium to be paid by real estate developers for the 0.33 extra FSI to ready reckoner rates of 2015 as against current base of 2008 rates.

Effect of an extra FSI:

If this proposal will be accepted, so according to real estate experts, so real estate developers may not find smaller redevelopment projects in Maharashtra viable because of the financial outgo, as the base rate for calculation of premium will increase by almost 100 per cent. This move will push up the costs for home buyers in Mumbai’s suburbs. If central government is serious about project “Housing for All” or to make homes affordable than they need to take the extra measures as most of the announced aim to boost the government’s revenue, but these, including the latest one, will impact home buyers in terms of prices and lower areas offered to existing owners in redevelopment projects.”

In some of the localities and zones, ready reckoner rates have been revised upward by more than 30 per cent to 40 per cent on yearly basis. For the year 2015, revision in rates is popular in suburbs such as Malad, Chembur, Goregaon, Borivali, Ghatkopar and Vikhroli have been increased by 30 per cent to 40 percent. It is the same for plush residential localities such as Worli and areas near Bandra-Kurla Complex. In a sluggish real estate market where prices are weakening, a rise in cost for real estate developers is bound to hit their margins. This is expected to see low number of real estate developers coming forward for smaller redevelopment affordable residential as well as commercial projects in the suburbs.

As per the Nayan Bheda, CMD of Neptune Group, “All the equations in real estate market will change as costing itself will double with this proposal. Redevelopment projects in suburbs like Borivali, Kandivali, Mulund, Bhandup, Kanjurmarg and Dahisar will be hit severely as the cost will move up without much room for recovering it through any price hike”.  Once the proposal is notified, real estate developers are likely to renegotiate on the old redevelopment project agreements as construction is yet to start for them, because most of the real estate builders will be interested in reducing the compensatory benefits, including extra space for tenants.

In 2001, the state government of Maharashtra had decided to grant 0.33 additional FSI to real estate projects in the suburbs and extended suburbs of Greater Mumbai and central Mumbai by sanctioning an amendment to the Development Control Regulations for Greater Mumbai, 1991. As per the Vvikas Aroraa, Director, Marketing & sales, Runwal Group, “The costing is growing up and it will have two possible ramifications. Either home-buyer will have to pay more, which looks unlikely given the current market scenario, or developers’ margins will suffer whereas; other industries in real estate market is assessed on its net realization and profitability , and based on that redevelopment projects in suburbs may not see many takers”.

It is expected that this will make an impact as additional space to be shared with existing tenants. it is expected that this move will help to low the price of housing on the back of augmented supply in the suburbs. The premium accrued to the state government and the Municipal Corporation of Greater Mumbai from this additional 0.33 FSI was to be used on upgrade the city’s infrastructure. The additional FSI could be availed of on payment of premium.

Property prices in Mumbai

According to few reports, property prices will remain high in certain market conditions, but they will not increase any more. The value of under construction property which is unsold in real estate inventory in Mumbai can be anything as its R 53,400 crore for a clutch of listed firms and it presents that consumer confidence isn’t exactly soaring. What can be worse with an additional R36,800 crore of launches in the area of 20.4 million sq ft, which is more than half of south central part of the city and it can put the prices of real estate industry under pressure.

According to Niranjan Hiranandani, co-founder of Hiranandani Developers, in real estate market pricing strategy is now crucial since only relatively affordable projects are able to find takers whereas; high end properties in the central and southern parts of the city aren’t seeing any specific interest. Ghulam Zia Executive Director of  Knight Frank India, stated that first-time home buyers continued to sit on the fence however in recent budget there are no incentives for home buyers the market will get revitalized only once the RBI (Reserve Bank of India) begins to cut interest rates.

Analysis of Kotak Institutional Equities (KIE):

According to analysis of Kotak Institutional Equities (KIE) the numbers are clearly indicating that says land buying has dropped and prices are not going so up as only there are four or five developers have the capacity to buy land worth more than $200 million. The analysis showed that Oberoi Realty, Peninsula Land, Sunteck Realty, Godrej Properties, HDIL, DB Realty and Indiabulls real estate are among those property developers who are sitting on high inventories and major part of those inventories belongs from Lower Parel, Worli, south and central pockets of Mumbai and Prabhadevi.

Ambar Maheshwari, CEO of Indiabulls Group also believes that there is a glut at the premium and high ends of the real estate market. The more he added that a recovery is unlikely in areas like Lower Parel and Prabhadevi unless developers build smaller apartments that result in some kind of rationalization in prices. In present Oberoi Realty is targeting on the sales of unsold inventory and they are expecting to sale it in next 12 months, but KIE expects the company will only be able to sell R8,500 crore worth of residences in the next 30 months. As per the data issued by the Director General of Mumbai, in the first 11 months of 2014, property registrations fell 2.4 per cent.

As per few reports developers are planning to offer discount after definitive interest from buyers and channel checks suggest that large number of units are being sold in the 20:80 schemes which will be without a bank debt burden to and trip abroad for designing apartments however discounts are becoming more evident as real estate developers are also offering absolute discounts to investors and as well as end buyers now. These measures are clearly failing to impress and attract new buyers. In certain real estate market, in certain markets developers are selling 20-30 units in a month while in others they could be selling in 2 to 6 a month. Amit Bhagat, who is CEO & MD, ASK Property, stated that the demand was tepid in the luxury space so any developer who was leveraged might be under pressure.

Thane Municipal Corporation (TMC)

Nearly after one month Thane Municipal Corporation (TMC) issued a notice to Concord developers, which is one of the real estate developer, whereas; this notice was under the Maharashtra Regional and Town Planning (MRTP) Act, Suraj Parmar, who is chairman of the firm accused the TMC for adopting dilly-dallying tactics to give permissions for finished projects.

Suraj Parmar is also the president of the Maharashtra Chambers of Housing Industry, Thane unit, stated that before a year, our real estate firm had applied for OC (Occupancy Certificate) for the project of Cosmos Horizon at Pokhran Road, but instead of giving the reasons for holding the permission, TMC (Thane Municipal Corporation) issued Maharashtra Regional and Town Planning (MRTP) notice and due to that I had paid fine to the TMC. The developer blames that few authorities of TMC that they are harassing real estate player without any reason.

However, civic officials of TMC refuted the charges by stating that the MRTP notice was issued according to the provision of rules.” TMC had initiated the action against Concord developers as the developer, in one of his projects; they had allegedly handed over possession to flat owners despite without having the mandatory OC.

Meanwhile, on last Thursday, Vikrant Chavan, Congress group leader in the TMC wrote a letter to TMC chief and requested that TMC should take stern action against erring developers in Thane. “It is a serious matter that the head of MCHI, Thane is not complying with the norms” whereas; in reply Parmar clarified that “few people with vested interests are trying to malign the image of our firm”.

CREDAI showcased 500 projects in Real estate Exhibition at Nashik

In December, 2014, the real estate expo- Shelter 2014 was organized by the Confederation of Real Estate Developers Association of India (CREDAI) at Nashik. It has showcased around 500 residential projects with close to around 5,000 apartments. Municipal commissioner, Praveen Gedam and City Mayor, Ashok Murtadak have inaugurated the four-day exhibition at Dongre Hostel Ground along the Gangapur Road area.

Naresh Karda, the secretary of CREDAI, Nashik, stated that, “The response in the real estate exhibition was excellent and more than 100 real estate builders or developers from across the city have participated in the exhibition. The exhibition has showcased more than 500 residential projects where each projects were having the flats ranging from five to 100 flats or more. The more he added that, “Our main aim was to bring the different projects of city at one platform to facilitate and help buyers. This exhibition has saved the time and it has provided various options for properties at every location. It has helped the buyers or end users or investors to know property prices in all over the city and country.

It was the seventh edition of Shelter 2014, and one of the largest real estate exhibition in north Maharashtra as it have a total of 328 stalls. Different properties such as; flats, row houses, twin bungalows, farm houses and other properties were showcased at the expo. Apart from real estate builders, financial institutions and banks have also participated at the expo to help the consumers in home loaning process.

Government of Gujarat is expecting new airport in an ancient port of Dholera in the state to take on Dubai as one of the most admiring global hub. It is well known fact that Rs 1,000 crore projects has been actively backed by the Modi government and has been envisaged when Modi was CM of Gujarat, said by General Manager, Dholera International Airport, a state-run company.

Dholera is located in Gujarat and it is more than 100 kilometers from the state capital of Ahmedabad, which is almost similar distance from one of the other key city Vadodara. As a town Dholera covers more than 920 square kilometers area, but its Wikipedia page claims it will be developed into a megacity by 2025, which will be six times more than the size of Shanghai, which is the largest city by population in the world. The city Shanghai is spread on an area of 6.340.5 square meters however Dholera’s Wikipedia page doesn’t clarify how it will reach a several multiples of Shanghai’s proportions.

Chavda stated that the Dholera airport will be an alternate to Ahmedabad which will be saturated in the next five years. Now when it comes that why it will better hub than Dubai, so he stated that a Heathrow-Dholera-Singapore flight will entail a distance than is 322 kilometers lesser than a Heathrow-Dubai-Singapore airport. A total of 1,426 hectares area has been selected for the airport site, which can have at-least two runways and the length for these runway can be 000 meters and 2,900 meters, according to its brochure. The brochure ironically sports a picture of one of the terminals at the Dubai airport, lined on one side with Emirates’ planes, which means it still, aiming to beat Dubai as a hub is ambitious.

According to the news of Gulf Airport, London’s Heathrow is one of the busiest airports in the world as it were handled more than 70.48 million passengers in 2014. Airport has four of the multi-level terminals, one which has been built at a cost of $8 billion or approximately Rs 45,000 crore, and three concourse connections between them. It is handling more than 140 airlines connecting to 270 destinations and able to contribute more than $26.7 billion to Dubai’s economy or 27% of its GDP. Currently, Dubai is planning to build a $32 billion second airport with five runways.

Recently, Devendra Fadnavis, Chief Minister of Maharashtra assured the industrialists for quick and speedy completion of key infrastructure projects in Mumbai and its suburbs and he allowed the Mumbai’s civic body to float municipal bonds for the first time ever. In a conference, to transform Mumbai, Devendra Fadnavis, stated that it is expected that an ambitious 35-km long coastal road linking the city’s northern and southern extremities will be completed in next two years whereas; the work on the 22.5 km Mumbai trans Harbour link, which will link the Sewri in the island city to the mainland, will start by the end of 2015 and by the time the new airport is ready, which is 2019. CM Fadnavis, the more added that I know it is impossible, however projects much bigger than coastal road have been completed before two years. So let’s try to do it.”

Most of the Mumbai’s infrastructural projects have been delayed due to poor planning and over cost that can cause frustration and anger between the city’s harassed office goers and as well as harassed commuters. it is well known fact that a 4.7 km bridge linking Bandra to Worli took more than 10 years to build whereas; a flyover between Santa Cruz and Chembur took more than 11 years and they cost more than Rs 450 crore, which is pretty high. But CM was sounding positively as he stated that state government was willing to willing to stick their neck out to set an example. It is expected that environmental clearances for coastal road and other projects will be given by the end of monsoon followed by bids for road construction.

Arun Jaitley, Union Finance Minister stated in the conference that through a video link and by giving his support for developing Mumbai as a financial centre. This conference was held to brainstorm the ideas for the development of Mumbai as the world class financial capital of country, so that it can represent the host of industrialists, Jayant Sinha, who is the Union Minister of State for Finance, Fadnavis, other cabinet colleagues and state bureaucrats. In the conference, CM Fadnavis also allowed to Brihamumbai Municipal Corporation to float municipal bonds and it was for the first time when Commissioner Sitaram Kunte complained that they need such flexibility.

Municipal bonds will allow the civil bodies to get the fund from the market to fund the development work for infrastructure projects without relying on the state largesse or tax increases. BMC, which is the richest municipal body in Asia has a budget of Rs 33,514 crore, and it is more than then the market of Punjab National Bank,, which is the fifth largest PSU bank in terms of assets. Giving an instance of how his government has been taking quick decisions, the CM stated that in past two months our state had given sanction to more than 25 development plans that were in the line.

India is one of the fastest growing countries and its internet legion is bigger than the Indonesia’s 250 million population. In India internet users are growing with the annual rate of 20 per cent and all they have lured to property portal investment in the form of likes Japanese telecoms-to-media firm SoftBank Corp. Before few days Google Inc’s Google Capital unit invested a huge amount of money in the online site known as; Commonfloor.com. In present investors are looking for long terms capital for start-ups such as; Housing.com and Proptiger have also make the Indian real estate market more attractive for foreign investors in comparison of China, where local money dominates, stated by one of the investor, who was speaking on condition of anonymity.

Why online portals real estate portals are better than traditional real estate market?

In real estate market traditional home buyers work with local brokers, but in a whole country property market already estimated by worth $121 billion in 2013, according to KPMG. There are some property portals who are offering online ability to compare house prices of thousands of kilometers property away without leaving home. According to, Indian businessman Navin Bhartia, “Internet habits make him a dream customer for billionaire foreign media moguls like Rupert Murdoch”. PM Modi has paved the way to attract more and more foreign investment in construction and land based acquisition deals. PM has already sought to make an impact on India’s still largely unregulated property market by making the listing of real estate investment trusts easier.

Recent investments in online real estate portals:

A person of 45-year-old from Kolkata love to buy home online, sometimes even without visiting them, in last four years he has bought five properties worth of 40 million rupees ($641,900) from online property portal Proptiger.com, which is owned by Murdoch’s News Corp. Foreign investors such as; Murdoch have already invest more than $200 million into online property portals, which help people like Bhartia to buy homes. Spurring the interest is PM Modi’s vow to provide a house to every Indian family by 2022 under “Housing for ALL” schemes as the country’s growing army of Internet users embraces e-commerce. As per Mukul Singhal, a principal at India-China fund SAIF Partners, “Growth and scale of businesses like Flipkart are a proxy that consumers in India are comfortable doing transactions on the Internet”. Recently, SAIF Partners have invested $10 million in Proptiger and News Corp has invested a $30 million stake.

Disadvantages of traditional real estate market:

Indian real estate market is too messy and there are a lot of information arbitrage and asymmetry whereas; there is no credible pricing data and analysis is available, which makes it clear that why there is more need of  technology-based solutions, as per the statement of SAIF Partners principal Singhal. As per one of the customer, “A single broker has there some limited contacts and he could have personal reasons for pushing a property, whereas; in online mode you get very good and holistic views about each and every property”.

Future growth of online real estate portals:

As per recent reports of Venture Intelligence, It’s clear that investment in property portals jumped five-fold to $193 million last year. This research firm also expects India’s housing market to grow to $158 billion by 2020. Some websites, who charge a huge amount of money as subscription fees or a percentage of the sales price, are still accountable for home sales in India. For investors like News Corp, though, the Internet logic is inescapable. Apart from boosting the housing sales which have flagged as India’s growing economy in recent years, real estate developers are tying up with portals to push transactions online with special promotions.

According to Raju Narisetti, VP of of strategy at News Corp, “India’s digital demographic is a key factor in looking at this space”. On eof the real estate developer Tata Housing is the part of  $100 billion Tata group, in November 2014 they have sold homes worth more than 500 million rupees through a partnership with Housing.com, now days even buyers could see the 3D models of the units and token payment as well as whole amount and rest of the process can be done through online mode.