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05 - 10 - 2020
CREDAI Bengal Daily News Update | 05.10.20
WEST BENGAL NEWS
Kolkata civic body's property tax-waive offer kicks off with Rs 1
crore collection
Besides filling specified forms for the waiver, which will be available at the assessment
collection department at the borough level, those interested can pay online through the
KMC portal or civic app.
Two days after Kolkata Municipal Corporation (KMC) launched the interest waiver scheme
on property tax on October 1, the civic body on Saturday mopped up over Rs 1.1 crore from four major defaulters who made the payments.
One of the four applicants on Saturday handed a cheque of Rs 50 lakh to KMC board of administrators chairman Firhad Hakim. Another defaulter paid Rs 22 lakh in demand draft .
Besides filling specified forms for the waiver, which will be available at the assessment collection department at the borough level, those interested can pay online through the KMC portal or civic
app. Those who will apply physically, specified format will have to be submitted at treasury counters, e-Kolkata citizen service centres or at the unit offices of KMC assessment collection
department.
According to the scheme, 100% interest and penalty on outstanding property tax will be waived
if dues are cleared within February 28, next year. But if a property owner fails to apply within the
date, he/she will be entitled to 60% interest and 99% penalty on outstanding amount. This facility
will continue till May 31, 2021.
The civic body will also offer instalment facility to applicants. However, for those who will apply
for instalments will need to clear the entire dues within the scheme deadline of May 31, 2021.
According to the rules, an applicant who wants to avail of the scheme, will need to visit the KMC
assessment collection department offices to receive the demand notice. The applicant can then
pay the outstanding amount and get the benefits. Hakim said the scheme was planned to offer
relief to defaulters, who were so far not paying because of the huge rate of interest and penalty
levied on the actual amount due to non-payment of taxes on time.
“We may lose some revenue because of the cent percent waiver of interest but at the same time,
we will bring more property owners within the tax net. This way, our revenue will get
augmented,” Hakim said. A KMC revenue official said the civic body would get tough on a
Newspaper/Online ET Realty ( online )
Date October 04, 2020
Link
https://realty.economictimes.indiatimes.com/news/regulatory/kolkata-
civic-bodys-property-tax-waive-offer-kicks-off-with-rs-1-crore-
collection/78472841
section of major defaulters, who would still not take advantage of the current waiver scheme and
cough up the dues.
________________________________________________________________
Tenants make beeline out of New Town, flat-owners feel the
pandemic pinch
The pandemic has triggered an exodus from New Town, the fledgling township to Kolkata’s east, as young professionals, expats and students have returned home, leaving behind vacant
apartments and horrified landlords.
Several sprawling complexes — which were largely occupied by people from other states working in the IT companies in Sector V and New Town — lie half-deserted as tenants have
returned to their hometowns, with many of them either laid off or instructed to work from home for the rest of this year and the beginning of 2021. Even professional institutes have shifted to
online classes, making it unnecessary for students to stay in New Town.
While there is no survey or data available on the extent of the impact of the pandemic on real estate yet, conversations with resident welfare associations do not paint a very encouraging picture.
Shukhobrishti in Action Area III, with over 1,500 ready apartments, has always been a preferred choice for those wanting to rent an apartment in New Town, due to availability and affordability.
Newspaper/Online The Times of India ( online )
Date October 05, 2020
It also spawned an ecosystem of its own, with bus and toto routes connecting the township with
several IT clusters in New Town and Sector V.
“Of all the apartments in the township on rent to young professionals from the IT sector and students, almost 50% are empty, as many of them have left for their hometowns in Odisha, Bihar, Jharkhand and the northeast,” said Mainak Kanrar, joint secretary of the association. “Many
students who usually rent apartments in a group, have also left.” The scene is similar at other housing complexes like NBCC Vibgyor, DLF Heights, Rameshwara Waterview, where several
tenants have left.
Over the last few years, New Town has emerged as a favoured destination for young professiona ls and students who work in IT companies in the township or study in one of the several professiona l institutes. Decent infrastructure, sprawling malls, an under-construction Metro network and green
neighbourhoods have also attracted several families.
COVID-EXIT? A large number of New Town’s residents have left for home
‘Exodus of tenants deals a blow to local economy’
The current situation of lesser demand — and the consequent sudden supply surge — has driven down rental costs across the city and forced landlords to offer generous concessions, such as rent
reduction and sharing of maintenance costs. Iman Gazi, a property broker in New Town-Rajarhat, said the inventory of apartments would most likely increase in the next few months as several
tenants, struggling financially, have decided not to renew their rent agreements.
“Earlier, the rent for a 2-BHK apartment in the heart of the township was anything between Rs 14,000 and Rs 16,000. Today, the landlords are willing to accept 20% to 25% lower rent, but are
finding no takers,” said Gazi.
This exodus has also started showing impact on local economy. Vendors outside IT offices and residential complexes mostly sit idle and totos and buses on these routes don’t have enough passengers. Local bars, retail stores and even malls have reported depressing sales. “It has also
dealt a blow to local economy, with so many people leaving. Many people who worked as domestic helps, other service providers, local eateries, malls and public transport are bound to
feel the impact,” said Samir Gupta, joint convener of New Town Residents’ Welfare Forum.
_____________________________________________________________________________________________________________________
OTHER NEWS
Is it the best time to buy a house?
Falling property prices
According to RBI, even before the pandemic house prices in India had declined nearly 1% during
the January-March period from the previous quarter. A Reuters poll has predicted average house
prices to shrink 6.0% this year and 3.0% next year. In a worst-case scenario, prices nationally
were expected to decline by 10.0% and 7.0%, this year and next.
Newspaper/Online The Times of India ( online )
Date October 02, 2020
Link
https://economictimes.indiatimes.com/industry/services/property-/-
cstruction/is-it-the-best-time-to-buy-a-house/falling-property-
prices/slideshow/78446531.cms
Low-interest rates
Home loans are available at delectably low rates of 6.7% upwards. Country's largest lender, SBI
has even scrapped the processing fee on the home loan. Given the current gloomy economic
scenario due to the ongoing Covid pandemic, it might be safe to assume that the low-interest rate
regime might be there to stay for a long time to come.
Builder freebies
As per reports, new housing projects are either unsold or delayed due to the coronavirus
pandemic. With the festive season coming, builders may be looking towards to clear their
inventories. During the festive season, builders often announce freebies such as cash discounts,
modular kitchens, furniture, air conditioners, club membership, god coins, iPhones etc to lure
buyers and if you are good at negotiations, you might even get a very good deal.
But...
However, before you sign the dotted lines and book your own home, you must ask yourself some
pertinent questions. First of all, you have to consider the huge down payment that you are required
to pay to book the flat. In uncertain times like these, you must also ask whether you have a stable
job or enough cash for emergencies.
Renting may be better
Renting is a much better option in these uncertain times as you can save the downpayment money
for worst-case scenarios. Also, even with the low-interest rate, your EMI would be much higher
than your rent. And if you can save the extra amount after paying the rent in SIPs, you could save
a hefty amount and can use that money to book the house of your choice when things would
improve for better.
_____________________________________________________________________________
Visakhapatnam civic body collects over Rs 151.6 crore property tax
by September
The corporation had set itself a target of Rs 380 crore in property tax, against last year’s
collectible demand of Rs 350 crore. The ongoing pandemic has severely affected the civic
body’s revenue in the 2019-20 fiscal.
Despite the Covid-19 outbreak, the Greater Visakhapatnam Municipal Corporation (GVMC) has
been able to over Rs 151.6 crore in property tax, including vacant land tax, by the end of the April-September cycle this financial year. In fact, this represents a marginal increase over Rs 150.7 crore in tax collection in the corresponding period in 2019-20.
Revenue ward numbers 4, 6, 8, 16, 20 21, 39, 40, 43, 44, 50 and 66 saw an increase of at least
10% in tax collection compared to the corresponding period during the last fiscal. The corporation had set itself a target of Rs 380 crore in property tax, against last year’s collectible demand of Rs 350 crore. The ongoing pandemic has severely affected the civic body’s revenue in the 2019-20
fiscal. Due to poor collections in March, the GVMC could collect only Rs 236 crore against its target of Rs 350 crore.
The GVMC usually collects between Rs 80 to Rs 100 crore in March – the end of the financ ia l year. This year, collection drastically fell to Rs 10 crore in March. Tax collection for 2019-20
were far behind the Rs 300 crore collection for the 2018-19 financial year. In view of the Covid-19 outbreak, the GVMC extended the 5% early bird rebate till the end of June, which otherwise
would have ended in April.
Speaking about tax inflows this fiscal, GVMC deputy commissioner (revenue), MVD Phani Ram
said the civic body created awareness among the public about taxes through autorickshaw
advertising. “They were also educated on the interest which would be levied if the public fail to
clear their half-yearly dues within the stipulated time,” said Phani Ram.
This year, the GVMC tops other urban local bodies (ULBs) in the state in terms of tax collection.
While a majority of ULBs have registered a downward trend in collections, the GVMC is one the
few to see an improvement in collections over last year.
However, the civic body has been struggling to collect arrears from various government and
private organisations for several years now. Failure to clear dues on time has escalated the arrears
Newspaper/Online ET Realty ( online )
Date October 03, 2020
Link
https://realty.economictimes.indiatimes.com/news/regulatory/visakhap
atnam-civic-body-collects-over-rs-151-6-crore-property-tax-by-
september/78457396
of these organisations to tens of crores over the years. Interestingly, tax arrears of some of these
institutions date back to two decades.
________________________________________________________________
Reduced levies for one year will help boost construction activity in
Mumbai: Builders
Building construction in Mumbai is costliest in India with developers paying 22 kinds of
premiums and charges that constitute at least a third of the project sale price, according to
the state-appointed Deepak Parekh committee report for the sector.
Building construction in Mumbai is costliest in India with developers paying 22 kinds of
premiums and charges that constitute at least a third of the project sale price, according to the state-appointed Deepak Parekh committee report for the sector.
But there could soon be some relief for city builders. Last week, civic chief Iqbal Chahal wrote to the state urban development department, suggesting that all premiums, levies and cess charges
by BMC be reduced by 50% for one year or up to December 31, 2021. “All political parties in BMC are on board,” he told TOI.
According to the Deepak Parekh committee report, in Bengaluru, developers have to pay 10 kinds of premiums and charges, in Delhi five, and in Hyderabad three.
Newspaper/Online ET Realty ( online )
Date October 03, 2020
Link
https://realty.economictimes.indiatimes.com/news/industry/reduced-
levies-for-one-year-will-help-boost-construction-activity-in-mumbai-
builders/78485564
It is learnt that based on the committee’s recommendations, the state government is likely to
reduce by 50% the hefty premiums and charges paid by builders for a period of one year. The proposal is likely to come up for discussion in the state cabinet meeting on Thursday.
This reduction, said developers, will help boost construction activity as many building projects became financially unviable for them because of the high premiums.
A builder developing a plot on Pali Hill in Bandra said that while the land cost is Rs 30 crore, he had to pay premiums and cesses amounting to a mind-boggling Rs 60 crore. Another developer
who wanted to construct an office building in Chembur found that the premiums he would have to pay the BMC totalled Rs 6 crore when the plot value itself was Rs 5 crore.
The Parekh committee report said, “The premium and charges collected in Mumbai is
significantly higher than other comparable cities. The number of heads increases based on the type of project and land holding. Thus, for Mumbai, the hefty premium translates into
significantly higher costs, resulting in deep inefficiencies and increased working capital requirements in a market where lenders are risk averse and reluctant to fund developers.’ ’
“When compared to the land value in each city (on the basis of the stamp duty ready reckoner
values), the multiple of premium payments to value of land in Mumbai ranges from 1.96x land
value for residential developments in the suburbs to 4.23x land value for commercia l
developments in Mumbai City,’’ it added.
Suggesting reduction and rationalisation of charges, the committee said that premium for
staircases, lift well and lobbies, amongst several others be reduced by 50% under the
Development Control and Promotion Regulations (DCPR) which is payable to the municipa l
corporation/state government.
“These premiums/charges should be paid at the time of granting the occupation certifica te,
without any interest being levied. In respect of any on-going project where part instalment of the
premium has been paid, these projects too should be eligible for reduced charges,’’ the report
recommended. “If a developer gets approval of say, a 10-storey building, but has constructed only
two storeys, he will be charged only for those two floors.’’
In the last financial year, the BMC collected Rs 2,500 crore through various premiums on
construction.
________________________________________________________________
BMC chief warns of fall in revenue if builders' charges slashed by
half
It is important to submit that if this reduction is accepted by the government, this will
adversely impact the revenue of the BMC,” Chahal said. “The reduction factor of 50% for
all premiums/charges levied will be made on receipt of directions from the state
government,” Chahal has said in his letter.
A 50 per cent reduction in premiums and charges paid by developers to the BMC as
recommended by the Deepak Parekh committee will adversely impact the civic body’s revenues, Municipal Commissioner Iqbal Chahal has told the state government, while giving BMC’s
‘concurrence’ to the proposed reduction. Chahal’s letter to Bhushan Gagrani, Principal Secretary, Urban Development (UD) department
‘concurring’ to reduce premiums and charges for builders by 50% comes amid stiff opposition from the ruling Shiv Sena and opposition parties.
In his letter dated October 1, Chahal has said premiums and charges will be reduced by 50 per cent if there are directions from the state government. “The BMC gives concurrence for reduction
in all premiums/charges/levies/cess/premium for staircases, lift well and lobbies, open space deficiency by 50% under the Development Control and Promotion Regulations (DCPR) 2034,
which is payable to the BMC as well as to the state government, the Maharashtra State Road Development Corporation (MSRDC), Dharavi Redevelopment Project (DRP) for a period of one year upto December 31, 2021.
However, it is important to submit that if this reduction is accepted by the government, this will
adversely impact the revenue of the BMC,” Chahal said. “The reduction factor of 50% for all premiums/charges levied will be made on receipt of directions from the state government, ” Chahal has said in his letter.
With the state government abolishing octroi, which was the BMC’s biggest source of revenue,
premiums from builders is currently one of the biggest revenue sources for the BMC after the remuneration it gets from the state government for Goods and Services Tax (GST) collection.
In July, the state government had sought the BMC’s views on whether it is feasible to reduce 50 per cent of premiums that the BMC collects from developers and collect the remaining half only
when the projects are completed and builders apply for an Occupation Certificate (OC), in lines with a recommendation by the Parekh committee set up for boosting the real estate sector.
The Parekh panel has recommended that there must be a 50 per cent cut in different premiums taken by the BMC such as for enhanced FSI, TDR, second staircase, additional issues like open
space deficiencies. The committee has recommended that it should be slashed by half across the
Newspaper/Online ET Realty ( online )
Date October 05, 2020
Link https://realty.economictimes.indiatimes.com/news/industry/bmc-chief-
warns-of-fall-in-revenue-if-builders-charges-slashed-by-half/78485704
board for all these premiums and not only for the city but for the entire state.
Shiv Sena leader and civic Standing Committee Chairperson Yashwant Jadhav sought
clarification from the BMC on the implications if the waiver on premiums is given and the
revenue hit that the BMC will have to take for it.
Jadhav has suggested that the waiver must only be given to builders who make affordable homes
and are working in Slum Rehabilitation Authority (SRA) and Mhada redevelopment projects. “It
is important to understand which project shall benefit from this. If a said project is a premium
project where flats are sold anywhere above Rs 3 crore, then the builder must not get any benefit.
It could be considered to make these benefits applicable to developers constructing only 1- and
2-BHK flats. This scheme should be available to builders who are developing affordable housing
like in the SRA and Mhada redevelopment projects.
It is important to strictly ensure that these benefits provided to builders ultimately translate to
benefit for the end user,” Jadhav had said in his letter to Chahal. Jadhav said that if the cut was
implemented, then if builders construct buildings and don’t apply for an OC, or if there is a
violation in construction, then the BMC would face loss of revenue.
Samajwadi Party (SP) MLA and corporator Rais Shaikh too had said that the reduction in
premiums will hit the BMC’s revenues which is already facing a cash crunch. “There are many
cases where builders are under litigation due to non deliverance of the projects in spite of having
received payment from buyers. So all these things will have to be discussed in detail. A blanket
reduction in premiums will not be fair,” Shaikh said. The BJP too has opposed the
recommendations made by the committee.
BJP corporator Prabhakar Shinde has also written to Chahal raising questions on the BMC’s loss
of revenue.
________________________________________________________________
Goa housing board invites bids from agencies to conduct e-auctions
To select an implementation agency to conduct the e-auctions, Goa Electronic Limited
(GEL), on behalf of GHB, is seeking a request for proposal (RFP) from parties in two bid
formats comprising technical and financial bids.
Moving forward with its plans to conduct e-auctions and allotment of plots and tenements, Goa Housing Board (GHB) has invited bidders to execute this initiative.
To select an implementation agency to conduct the e-auctions, Goa Electronic Limited (GEL), on behalf of GHB, is seeking a request for proposal (RFP) from parties in two bid formats comprising
technical and financial bids.
GHB has nominated GEL to bring in IT intervention in its operations. GEL will be the monitor ing agency for the entire project period of five years. “The e-auction will be equivalent to an offline auction, only much better and efficient,” states the tender document .
GHB’s objective is develop affordable real estate projects for people of the state.There are two
primary approaches by which flats get alloted to applicants - lottery system and auctioning. The
decision of whether to opt for lottery, auctioning or a combination of both is up to the board’s
discretion, states the tender document.
“The selected bidder shall provide a complete secured end-to-end e-auction solution adhering to
all acts, rules and regulations of GHB. The board will release an advertisement in newspapers
displaying the schedule for the e-auction along with other relevant details. Simultaneously, GHB
will also create a corresponding schedule for the e-auction in the portal. It will map which units
will be put up for auction from the inventory of assets, auction timings for each unit, base prices,
etc,” mentions the tender document.
GHB will have an entire list of inventory (shops, flats, row houses, etc) in their existing Goaonline
portal. The e-auctioning portal should import or create the entire inventory from GHBs existing
application for every auction in real time and also have the provision to create the inventory in
the system itself.
“The e-auction portal should have a provision to set the date and time in the system as per the
created schedule, and subsequently conduct the live e-auction at that set date and time,” states the
document.
________________________________________________________________
Newspaper/Online ET Realty ( online )
Date October 04, 2020
Link
https://realty.economictimes.indiatimes.com/news/industry/goa-
housing-board-invites-bids-from-agencies-to-conduct-e-
auctions/78472675
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