Here’s how GST will impact the real estate sector in India

Goods and Service Tax (GST) was one of the longest awaited tax reforms in the country. The GST bill, which got unanimous approval of both the houses of parliament, was finally passed in the Rajya Sabha during the first week of August 2016.

While three states have already ratified the bill, the other states will be following the trend quite soon, and by April 2017, the GST is expected to roll out completely across the country. When implemented, this new bill will replace various taxes like Value-Added Tax, Excise Duty Tax, Service Tax, etc. by a single tax – the GST.

It is expected that the GST is going to be beneficial for homebuyers as well as for the real estate developers. To know more on how GST will impact the real estate sector, read on!

  1. GST unifies the various taxes into one:

One of the biggest challenges that the real estate sector faces is the management of the multiple indirect tax levies. With the GST Bill in place, apart from the stamp duty, every other tax that’s related to goods and services will be eliminated, and the real estate developers need to pay just one tax. Thus, the tax compliance process will be more streamlined and simplified going forward.

  1. Compliance and input costs will diminish:

In India, there are more than 17 indirect taxes when it comes to the real estate sector. When GST comes into practice, these taxes, which even include the compliance and input costs, will diminish entirely. It remains to be seen what the rate of GST will be, based on which increase or decrease in nett cost can be determined.

  1. Overall price of construction materials will reduce:

Right now, the real estate developers are paying taxes for each material that they procure. Therefore, the overall cost of the construction materials is quite high. Since GST will eliminate the heavy taxed levied on each and every goods or services related to construction, the cost of building materials will reduce. Thus, we can expect that there will be more reduction in input cost and the final price of real estate properties.

  1. Government’s revenue will increase:

Since the taxing policy in the real estate sector will be equalised with the help of GST tax, tax compliance among real estate developers is bound to be simpler and easier to track. In other terms, GST regulates the tax structure across India. It is also anticipated that GST will bring a substantial boost to the economy. The economic boost will have a positive effect on the real estate sector because if the economy does well, the demand for real estate will also increase.

  1. Transfer of goods across states will be easier now:

As we know, the GST bill will eliminate multiple taxes and replace it with a single tax. Since there will be no need for the real estate developers to pay additional tax during the transfer of construction materials, they can procure construction goods from other states without spending a lot on the taxes.

In simple terms, centralised warehouses can now supply goods to builders across the country at a nominal pricing without additional taxes.

To yield the best benefits out of this new bill for their sector, real estate developers must prepare themselves in all possible ways. Also, there are frequent meets at the GST council to discuss the uniform tax rates that would be levied on various kinds of goods and services.

While the new GST bill currently seems to be highly beneficial to the real estate sector and, in turn, to the homebuyers, one must wait until the final GST rates are out to decide on how magnificent these benefits can be.

Since the government is expecting to implement the GST bill by April 2017, we might be able to know about the overall benefits and the positive impact of GST on the economy as well as on the real estate sector by then.

Start Ups disrupting the Real Estate Industry in India

Technology and the internet has changed the way most of us do business and has made our life more comfortable than ever. Thanks to this, almost everything is available at a click of a button including choosing a home. Start-ups are emerging in the reality space looking to make the home buying experience simpler, quicker and more interactive. Here is a look at start-ups that are disrupting the real estate industry in India.

Square Yards

A real estate start-up focusing on NRI investment; Square Yards is an aggregator offering an integrated menu of property and asset portfolio from reputed builders in India. Founded by investment banker and IIM-Lucknow alumnus Tanuj Shori and Kanika Gupta, a wealth manager, Square Yards claims to have sold 350 homes in 19 hours of its launch. The portal aggregates over 6000 projects from 500 real estate developers and distributes around 27000 different configurations of homes. The company also has a presence in seven countries including India, Hong Kong, UAE, Qatar, Singapore, UK and Australia.  

A product developed by Square Yards, Square Connect is a mobile app made for real estate brokers and gives them access to bestselling and highest commission paying projects in the world. It also lets agents track payments, give news and updates, loan and EMI calculator, etc. to make a broker’s life better.

Square Plums

Square Plums is India’s leading chain of “Branded” rental homes for singles with presence in 5 cities and managing hundreds of properties. Square Plums aims to make it easy for singles to rent fully furnished homes in prime locations. All Square Plums homes are curated, designed and furnished keeping in mind the unique requirements of singles. For house owners, it offers the benefit of letting out a fully furnished house, with up to 50% higher rentals, without having to spend on furnishing the house.

Purple Yo

Incorporated in January 2015, PurpleYo is essentially a big data and analytics platform for the real-estate sector, providing information to entities that have a commercial real-estate requirement. Helping customers find and shortlist properties, the platform is not doing any transactions as of now. Rather, on request it connects the users directly to the developers on their platform. Being absolutely free, the platform has no brokers on their website in a bid to empower users with more information. On B2B side of the business, it acts as a marketing tool for other real-estate developers, offering a competitor performance dashboard, their pricing, and comparative analysis of properties, market analytics and e-mail campaign services. Almost 30,000 brokers and commercial real estate executives use PurpleYo every month to find office spaces.

Sadanika Solutions

A Bangalore-based start-up dedicated to building smarter technology for real estate, Sadanika Solutions has two products – homebuy360 and homefind360. Homebuy360 is India’s first online application that provides login facilities to buyers. It connects builders, buyers and brokers through a single online platform. Homefind360 is a platform that gives essential information to property finders that would help buyers discover the right home.

Nestaway

An app that helps find a better rental solution, Nestaway help you find, book & move-in to a rental home of choice across Indian cities. They turn houses to fully furnished apartments and provide them to verified tenants. The app also provides assistance in moving in; fixing repairs; paying your rent, etc. The company was started by Jitendra Jagadev, Smruti Parida, Amarendra Sahu, and Deepak Dhar has been funded by Flipkart and Tiger Global.

Ghar360

Are you looking to design and visualise your dream home before buying it? Then Ghar360 is the ideal platform for you. Founded by Ajesh Joy and Sanju Thomas, Ghar360 is a cloud-based 3D reality platform that not only enables users to design their dream home but also focuses on providing IT solutions for the architecture and interior design industry. They also have tie-ups with vendors who sell home products.

Radiance Home Interior Solutions

Radiance Realty offers end to end interior solutions to home buyers. It provides homeowners with the options needed to transform a House into a Home. This one of a kind offering provides a wide range of customised Furniture and home decors supported by technical expertise and experience professionals that delivery quality craftsmanship within the required budget. They work closely with the owners, every step of the way to suite the taste and character of the owner.

BroEx

BroEx is a unqie portal and app bringing together all real estate brokers under one platform. It allows real estate developers to share their property listings & requirements with brokers in the city. Developers and Brokers can search each other depending on the requirement. It has a Auto Matching feature allowing developers to list their inventories and get notified for matching requirements.

CoHo

CoHo aims to provide a better living experience to millennials in India. The company is pioneering the concept of Co-Living Spaces in India. Along with housing, the company also provides end-to-end home services like housekeeping, repairs, maintenance, high-speed internet and other utilities.

Documents You Need to Check before Purchasing Residential Property

Buying residential property, for investment or otherwise, is probably one of the most important decisions you will ever make in your life. So, it is necessary to ensure that the property you are buying is worth your money. In order to do so, there are a number of checks and verifications to help you make the right decision. As part of these, the following documents will help you steer clear of an unwise investment. Not only must you ensure that the documents are present and will be transferred to you upon purchase, but also go through them with a fine toothed comb to ensure there is nothing untoward about the purchase.

Building Approval Plan
Every construction compulsorily needs the approval of the municipality or the Panchayat, the property falls under. Any construction done without the approval of the concerned authority would be considered illegal. When you examine the building approval plan, you should also look for the signature of a registered architect.

Conversion Certificate
Nowadays, most of the valuable real estate properties are being developed in suburban areas around major cities. Now most of this land would have originally been used for agricultural purpose, before the city grew in size. So, when any such agricultural land is used for real estate development, the land must be converted from being agricultural to non-agricultural. This conversion is then authorised by a certificate. The absence of the certificate might create legal complications in the future. So, you must check the original copy of the conversion certificate before you buy property in a suburb that borders the main city.

Sale Deed
The sale deed is the primary document which defines the legal standing of the property. The sale deed mentions the transfer of ownership of the property to the current owner. While going through the sale deed, you must look for the properly registered title of the property and should also ensure that all the terms and conditions of the agreement mentioned in the deed are fulfilled.

Current tax return receipt
In the case of purchasing a pre-owned home, an important document which must be checked before you finalise your decision are the tax return documents. The tax return process is a simple one, yet some property owners do not bother to do so, putting subsequent buyers in a tax related quagmire.

Occupancy /Completion Certificate:                                                                                                                                                                   The occupancy certificate is provided by the civic authorities which signifies that the real estate development fulfils all the civic criteria required for a property to get the right to be occupied by residents. You need to check the document to ensure the property you buy is legally ready for possession.