Real estate to get real: How Modi is setting India's Housing in order
100acres.in: It is clear that Prime Minister Narendra Modi wants homes to be more affordable for the masses. The real estate sector has been under his hard gaze as is evident from the Real Estate Regulation Act (RERA) which came into force a few months ago.
Modi is tightening his grip on the real estate sector. A magnet for black money, real estate sector is, however, not exactly consumer-friendly, especially for the middle-class buyers. Homebuyers have been at the mercy of builders that often delay deliveries and overcharge.
One more regulation the government is planning to bring will discipline the profit-seekers who have kept the prices high in this essential sector. Unrealistically high home prices might come down if a revenue department proposal gets implemented. It plans to asks builders to pay taxes on their unsold stock of ready houses.
On the basis of a court order, which held that ready unsold flats held by builders as stock-in-trade are liable to be taxed as "income from house property" even if they are not rented out, the income tax department last week suggested the finance ministry that this was one way of garnering more taxes.
Real estate companies show their finished apartments as stock-in-trade and income from these are shown as business income, as in most other businesses. In a rising market, several developers hold apartments to benefit from the price appreciation that will accrue a few years after the project is complete … read more http://100acres.in/news/news_event
With the new regulation, builders will have to either sell these properties soon, perhaps by offering discounts, or get into expensive litigation.
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