Stamp Duty for property transfer

Following representations received by the prime minister’s office (PMO) from both domestic and foreign private equity players in the past two months, Finance Minister Arun Jaitley is expected to consider the issues of scrapping stamp duty on transfer of properties by private individuals and firms to real estate investment trusts (Reits) and making dividend distribution tax (DDT) ‘pass through’ for Reits and investors in the trusts. Tax levies, including DDT and stamp duty issues, were flagged by top investment bankers and chief executives of companies like JP Morgan & Blackstone.

The real estate industry, equity investors and international trusts have represented to the government for granting “pass through status” for dividend payments by Reits. In effect, rental income from assets with the trusts would not be liable for tax as and when these assets or units are returned to the investors.

The demand for exemption from payment stamp duty and DDT was put forward after the government recently scrapped long-term capital gains tax on transfer of Reits units by their sponsors or investors. An exemption on payment of minimum alternate tax (MAT) when investors transfer shares to the Reit or on sale of Reits units was also granted by the Government recently.

Pending tax issues have been dissuading equity investors and real estate companies from making it big in real estate investment trusts (Reits) and infrastructure investment trusts (InvITs), rating agency CARE said in a note. In his last budget, finance minister Jaitley had given hope to real estate companies looking to list their rent-yielding real estate assets through Reits. Reports from various analysts suggest that the potential for Reits listing in India was about $ 20 billion since in May, the Union cabinet allowed foreign investors to take exposure in Reits to bring in capital and reduce the debt liability of domestic real estate companies.

As per estimates made by real estate firm Raheja Group, the top seven cities of India have more than 400 million square feet of operational office space; of which, over 150 million sq feet would be ready for Reits listing by April.

The largest realty developer, DLF has announced plans to start two Reits, with one exclusively for commercial office space. The company plans to monetize about 30 million sq feet office and retail space by the end of this financial year.

“The government may not wait till presentation of Budget in February next year, instead, it may shortly notify the exemption on payment of stamp duty on transfer of properties to Reits,” confirmed a PMO official. “Exempting Reits completely from payment of DDT might need further discussion,” he added.

Infrastructure development Mumbai

In past few years, Mumbai and other metro cities have emerged as the most preferred destination for property investment. After the budget of 2014 the ball of real estate sector is spinning in positive direction because new FDI norms, implementation of REITs and allocation of new funds for infrastructure development. Recently, Indian government has made it clear that there solo objective is to provide the affordable housing units and due to that they are implementing the new policies, which will be helpful to boost the economic growth. Property in Thane and Property in Mumbai is the one of the most preferred destination of investors and high end users because Thane and Mumbai is the most commercial areas and we all know here investment means more than 40 per cent ROI. It’s not easy for common man to own a Property in Thane and Property in Mumbai due to high budget, but now real estate developers are planning and constructing the new affordable housing units for middle class and all this is possible due to reduced size of apartments.

According to real estate experts, there are some areas in Mumbai, which will see a positive momentum and can play a vital role in the real estate market of Mumbai. Most of the Property in Thane and Property in Mumbai are comes in high budget, so just clear the pending inventories, developers are now ready to negotiate on the price and providing some great offers, so that they can attract the pool of investors and end users and after getting the money they will be able to invest in the new real estate projects. Property in Thane and Property in Mumbai are consequently growing and expanding with new commercial and industrial opportunities. In Thane and central Mumbai buyers have a option to purchase the 1BHK, 2BHK, 3BHK, 4BHK and luxury apartments in the price range of 25 lakhs to 2 crores, here apartments size vary from 1,000 sq ft to 3,500 sq ft. Mumbai is famous in all over the world for their super-luxury projects and due to that this city is attracting the Indians as well as NRI’s for investment.

Property in Thane and Property in Mumbai why are the hot-spot? Because of high returns and luxury apartments? The answer is both, realty market in Mumbai is attracting the investors and end-users of premium segment as well. But due to high cost it’s not a cup of tea for everyone to won a Property in Thane and Property in Mumbai. Thane and Mumbai fetch the high rates of appreciation due to metro connectivity, well developed road network, fast-paced development in infrastructure and availability of other basic amenities such as; colleges, schools, super market, shopping malls, banks, ATMs, hospitals and other places. In present even some people are ready to take the loan just for making the investment in these reasons because they know that this investment will bring the good returns in future.