Big Opportunity For NRIs To Make Money By Investing In The Indian Realty Market

November 2018

We examine the depreciation of the Indian rupee against the US dollar and the present interest rate cycle, to ascertain whether this is a good time for NRIs to put their money in Indian real estate

The significant fall in the value of the Indian rupee in the last six months, may be a cause for considerable concern, especially for the realty sector in India. A weak rupee against the US dollar, makes it difficult for developers in the sector to import essential construction machinery and increases other input costs. Moreover, at its last monetary policy meet, on October 5, 2018, the Reserve Bank of India (RBI) had refrained from hiking key rates but indicated that it may have to take a tough stance soon. So, interest rates are expected to remain in the upward trajectory. However, amidst the negative sentiments in the realty sector, opportunities are cropping for non-resident Indian (NRI) investors.

“A depreciating rupee creates an ideal environment to invest in Indian real estate, as the cost of acquisition of property will now be lesser for NRIs. The Indian market currently offers a range of world-class developments that appeal to the lifestyle and tastes of NRIs,” says Gaurav Sawhney, president – sales and marketing, India, Piramal Realty. Experts point out that the Indian economy is among the best-performing emerging markets.

India’s competitive advantage in services, along with government investment in infrastructure, will continue to generate domestic demand and create opportunities for real estate investment across asset classes – from residential and commercial to logistics and hospitality.

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Indian real estate market on a recovery path

Housing sales have started showing signs of recovery in most markets and office vacancy levels are at record lows, indicating that this is probably one of the best opportunities to invest in India’s real estate market. “With the Real Estate (Regulation and Development) Act (RERA) in place, the government has addressed the sector’s biggest concerns – transparency and protection of investors. Most investors are aware of the stress in the sector and the developers’ need for cash flows. Savvy investors have also been keeping track of the institutionalisation of commercial space in the country, reflecting the confidence in occupier demand and long-term growth,” explains Aashish Agarwal, senior director (head, consulting) at Colliers International India.

Stable economic and political outlook, make Indian realty attractive to NRIs

Rohit Poddar, managing director, Poddar Housing and Development Ltd, adds that “India is the largest democracy, with the largest English-speaking population. The economy is growing at over seven per cent and hence, is a significant contributor to the world aggregate GDP growth figures. India is neither aligned with the US or NATO or China and given India’s inherent attractiveness and stability as a market, it makes immense sense for the NRI community to not only trade with India but also actively invest in the Indian markets.”

Key investment indicators for NRIs looking to invest in Indian properties

• Depreciation of the Indian rupee against the dollar: NRIs can get Indian properties, by spending less money in terms of dollars.


• High GDP growth: High GDP growth numbers come from the underlying economic growth across several sectors, thereby, translating into opportunities for investors to make superior returns.


• Relatively stable Indian economy, in comparison to other emerging nations: in India is vibrant and flourishing. India is least impacted by the ongoing trade war between the US and China.


• Favourable regulatory support: The government has instituted major regulatory reforms, such as RERA, the Goods and Services Tax (GST), etc., which are expected to lead to robust long-term economic growth.

Experts add that while the rupee has weakened, NRIs should remember that it is not a volatile currency and is well regulated, by a strong central bank. India has adequate forex reserves and the government has also been keeping the fiscal deficit under control. While real estate markets may demonstrate volatility, due to the forthcoming elections, given the current pricing levels in most markets, property prices are unlikely to fall any further.

Also read: 10 tips to ease your property purchase process

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Source: housing.com

Stamp duty and tax on gift deed of property

November 2018

While a gift of house property does not involve monetary consideration, it needs to be registered and taxes should be paid in certain cases

Gifting is an act, through which a person voluntarily transfers certain rights in an asset to another person, without any consideration. Gifting of a house property, has certain income tax and stamp duty implications.

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Legal requirements for gift of property

As per the Transfer of Property Act, the transfer of a house property under a gift, has to be effected by a registered instrument/document, signed by or on behalf of the person gifting the property and should also be attested by at least two witnesses. The registrar shall ensure that proper stamp duty has been affixed on the gift deed/document when it is presented for registration. The amount of stamp duty and registration charges payable, with respect to a gift deed, are generally the same as in the case of a regular sale. However, if the gift deed is executed between some specified close relatives, some states provide concessions in stamp duty. For example, Maharashtra has a cap on stamp duty payable on gift of a residential or agricultural property to one’s spouse, children, grandchildren or wife of a son who has died, at Rs 200, irrespective of the value of the property.

Income tax implications on gift of property

According to income tax laws, the value of all the gifts received by a person during a year is fully exempt, as long as the total of such gifts does not exceed Rs 50,000 in a year. If the value of all the gifts taken together exceeds Rs 50,000, then, the aggregate of the gifts received become taxable without any threshold exemption. However, income tax laws also give a favourable treatment, to gifts between two close relatives. Consequently, the gift of any asset (whether movable or immovable) made to certain specified relatives, is fully exempt from tax in the hand of the recipient, without any upper limit. The list of close relatives includes parents, spouse, siblings, siblings of the spouse, lineal ascendants and descendants of the person and his/her spouse. The list also includes spouse of the abovementioned persons.

If the house property is received as a gift from a relative, the first incidence of tax will arise, when you sell the property. The cost for the purpose of income tax, shall be the taken as the cost that was paid for the property by any of the previous owners. The profits shall be treated as short-term or long-term, depending on whether the aggregate of your holding period as well as that of the previous owner who had actually paid for it, is more than 36 months or not.

If the holding period as computed above is less than 36 months, the profit accrued on the sale of such property, shall be treated as short-term and will be added to your regular income and taxed at the applicable slab rate. However, if the holding period is more than 36 months, you will get the benefit of indexation on the cost of the property, as well as the option to claim exemption from payment of 20% long-term capital gains tax, by investing in a residential house or in capital gains bonds of Rural Electrification Corporation (REC) or National Highway Authority of India (NHAI).

Also read: The home buyers’ guide to choosing the right amenities

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Source: housing.com

When old is gold: Add a vintage touch to your home décor

November 2018

When it comes to home décor, a vintage look is always in style. We look at some simple ways, in which home owners can recreate an old-world charm in modern homes

A ‘vintage décor’ can be defined as an interior design theme that incorporates elements of the past and in particular, the best elements of a particular time. Prachi Chavarkar, co-founder of ArchiLab Designs, explains that a vintage design can be associated with a region (for example, Rajasthan, Maharashtra or Kerala) or even architecture belonging to a particular era, like Indo-Saracenic (or Indo-Gothic or Mughal-Gothic). “In terms of a global look, it can also be British, French or colonial design. Some may also call a local historical look as ethnic but it is a part of vintage décor,” adds Chavarkar.

Credits : pixabay.com

Elements of vintage décor

Home owners can remodel their homes based on a vintage theme, by either recreating the style or bringing in old décor elements, such as distressed furniture, a grandfather clock, ceramic tableware or even a sword hanging on the wall, into the design.

“Wall plaster treatment that mimics Greek architecture or red oxide flooring, for example, could instantly give the space an old-world charm. An old metal trunk, placed right at the center of the living area, can add an element of nostalgia and serve as a functional coffee table. Old bamboo rocking chairs, incandescent or industrial lighting, wooden fans, bohemian carpets, are all simple examples of this,” states Sameer AM, founder and CEO, Bonito Designs. Floral soft furnishings or wallpaper, add a vibrant colour to any room. “For fabrics, opt for jute, cotton and recycled fibres with muted floral patterns, to add a soothing feel. These are ideal for a vintage look,”

Antiques and souvenirs as décor accessories

People often collect old antiques or souvenirs, from the various places they travel to. A home owner may also have inherited many artifacts and antiques. “It is a nice concept to showcase antiques in your space. However, these items should be displayed with a lot of thought and care. When you display numerous pieces from different locations, historical periods, types and materials, one has to be mindful about the order of display. Depending upon the size, scale, material and type, they should be properly framed or placed. Ideally, these should have a showcase or a background/surrounding that complements the items displayed,” Chavarkar suggests.

Colour scheme for a vintage home décor

Vintage-looking furniture, made from old reclaimed wood or wood that looks colour-washed and weathered, are in vogue. Winged chairs or a royal armchair, can be used as accent pieces. The flooring, from designer cement tiles, wooden floor, carpets and area rugs, should have colour schemes that enhance the vintage décor. While designing the home, decide the colour scheme or materials for the vintage theme, based on the size and volume of space and the amount of natural light that is available.

Sonali Puri, a home maker from Delhi, who designed her house on a vintage theme, shares that “I have silver and brass artifacts, which are family heirlooms. I have also been collecting antique curious like jharokha frames, textiles and lithographs for a long time. In my living room, I have framed and put up an old textile tapestry with rich embroidery, as a backdrop. A silver-plated divan that belongs to my grandmother and silver frames, with family photos in black and white, add to the vintage look. I have tried to maintain a balance between the modern and antique. For example, the dining table, which I picked up from Chor Bazaar in Mumbai, has a pedestal of the teakwood and a glass top.”

Dos and don’ts for remodeling a house to add a vintage look

• Ideally, the colours in a vintage-themed home, should be shades of blue, pink and peach.
• Wallpapers with floral patterns, are ideal for this theme.
• For furniture, opt for old designs, like a carved four-poster bed, an ornate dresser or a maharajah chair.
• One can have a mix of themes but it should be handled carefully. Mix old pieces with modern design elements, to create a perfect amalgamation.
• Understand all the details of the era, so that there is no messy mismatch. Do not overdo the theme as the home may end up looking like a shop that sells vintage items.
• Gold and silver accents and accessories of matte or shiny finish, can add some sparkle. So, opt for interesting lamps, frames, knobs and door handles.

Also read: Vastu tips for positive energy at home

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Source: housing.com

5 reasons why this festive season is the right time to buy property

November 2018

If you have been protracting your decision to buy a house then this festive season is the right time to loosen your purse strings. Although the festive season is considered an auspicious time to buy new things, including real estate, here’s a list of five reasons why prospective home buyers should buy a property now.

Credits : Freepik.com

Unsold inventory

Post the real estate slowdown, most developers had been waiting for the re-emergence of positivity back into the market. Buyers’ renewed enthusiasm in the real estate has brought cheers for developers who are now trying to liquidate their existing inventory and recover costs. To make the most of this development, builders are offering a number of discounts and freebies to attract end-users.

Low property prices

Your focus when it comes to building equity at a faster pace should be on the two factors that dictate your total ownership:

Property prices have decreased in the last couple of years. Although prices have remained stagnant for a while now, this is the ideal time to indulge in a hard bargain with the seller to extract the best deal for yourself.

Discounts and freebies galore

Developers are trying to encash the market sentiment and attract buyers by offering them freebies to make the deal look attractive. Munish Mishra, Sales Head, Wave City, says, “There is no better time than the festive season to avail attractive offers. We have tied-up with LG to offer various products such as AC, refrigerator, LED TV, washing machine, oven, etc. to our customers.” But a word of caution, don’t fall for the freebies instantly. Judicially analyse the freebies and try to monetise them as well. You may ask your builder to give you the value of the freebies as discount on the property and if the offered price is reasonable then go ahead and accept the offer. If festive offers from developers include important amenities such as free car parking, then go for them but make sure to bargain hard on the final property price.

Lower home loan rates

Lowering of repo rate by the Reserve Bank of India has led to a decline in the home loan interest rates. In September 2017, banks were providing home loans at an interest rate of 8.35% which is attracting home buyers. Renu S Karnad, Managing Director, HDFC, says “low interest rates help buyers in reducing their borrowed costs. Interest rate is one of the important factors that a home buyer looks at while buying a home. Lower interest rates not only helps in reducing the borrowing costs but also improves their loan eligibility.” She further added, “CLSS under PMAY for interest subsidy of 6.5% for EWS and LIG categories and the extension of the scheme for MIG category (interest subsidy of 4% on Rs 9 lakh loan and 3% on Rs 12 lakh loan) by another 15 months till March 2019 is in itself much more than a festive offer.”

RERA-compliant projects

A RERA-compliant project means that the developer can’t take you for a ride anymore. Policies like RERA and GST have instilled a sense of compliance in developers and thus, they are most likely to fulfil their promises now. Sanjay Shenoy, Joint Managing Director, Legacy Global Projects, also expects such policies to bring cheer to the market. He says, “We expect a marked upswing as buyers are now more confident that their interests are being taken care of, with a strong policy in place.” Adding that there are attractive options for buyers this festive season, he explains, “There is a plethora of attractive options for a home buyer today. Differed payment schemes, EMI free investment options and other flexible payment options which reduce the cash flow burden of clients continue to be a big hit.”

Also read: Own a Home? 4 Ways to Build Equity Faster

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Source: timesofindia.indiatimes.com

Own a Home? 4 Ways to Build Equity Faster

October 2018

A home is one of the biggest purchases you’ll ever make. And while it’s much more than just an investment, there’s no denying the importance of maximizing ownership in your property. Your home equity can be used for everything from future remodels and improvements to retirement, so the more you have of it, the better. Fail to plan ahead though and you could miss an opportunity to build the biggest stake possible. So how can you build equity faster? Let’s cover the basics.

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What is home equity?

Home equity is the current value of your home minus the amount that you owe on it. Ideally, you want your home equity to be as large as possible.

Wealth in your home is a long-term goal, and not something that will happen right away. Unless you paid off your entire home in cash before moving in (and let’s be realistic—most of us aren’t doing that), then it’s going to take you awhile to get that number into the positive. Gains in your individual ownership happen as you pay off more of your mortgage and if/when the market value of your home increases. And fortunately, you can take active steps to make both of these things happen sooner than they might otherwise.

How to build equity faster

Your focus when it comes to building equity at a faster pace should be on the two factors that dictate your total ownership:

- How much of your mortgage you’ve paid off
- How much the value of your home has increased

If you can speed up the process on both of these, you can speed up the rate at which you build equity. Here are four ways to do it.

1. Make a larger down payment

You can’t go back in time and change how much you put down for your home, but if you’re reading up on how to build equity faster before closing on a property, this is definitely something that you will want to consider. The standard down payment on a house is 20%, though many people put down more or less than that. If you have the cash and you’re looking to increase your equity as quickly as possible, it’s worth it to write a bigger check up front. Not only will you lower your interest and monthly payments, but you’ll also be that much closer to owning a positive stake in your home.

2. Purchase a lower priced home

Here’s another one to consider before you even start looking. A highly-priced home will net you more equity in the long term, but it will take a long time. With a lower-priced home, you’ll be able to offer a bigger down payment and possibly shorten the term of your mortgage as well. Banks are profit-driven, and the amount of money they tell you that you can spend on a house isn’t necessarily what’s smart to spend. Think of your own budget and financial goals, and choose a home that will allow you to pay more and pay faster.

3. Prioritize paying off your mortgage faster

What’s standing in between you and full ownership of your home? Your mortgage. Every month that you pay money toward your mortgage you’re contributing to both the principal and interest on your home. The principal goes toward your home equity, the interest toward your lender. The goal then is to pay toward your principal as much as you can, in turn paying more toward your own net worth. While the thought of putting even more toward your mortgage every month than you already are may not seem all that appealing, the pay off is surely worth it. Try incorporating one or more of the following tips for paying off your mortgage faster and see if it works with your resources and budget.

- Round up every month. A little bit can go a long way. If your mortgage payment is $1,225 a month, for example, give $1,300 instead. An extra $75 (or $50, or $25) may not seem like much in terms of your home’s total cost, but it will go straight to principal and your home equity.

- Opt for a shorter mortgage term. When it comes to mortgage terms, a 30-year fixed loan is the go-to. But if you’re okay with taking on a larger monthly payment, you can choose a shorter term mortgage and build equity much faster. If you originally went with a 30-year loan but now have the means to reduce it, look into refinancing to a shorter term.

- Funnel gifts, bonuses, and your tax refund into your mortgage. Think of your home equity like a savings account and consider that anything extra you put into it is essentially being saved for later use. By that logic, it makes sense to dedicate all or a portion of any extra money you make during a year to your mortgage. Different lenders have different rules about extra payments, so talk to your lender and find out what the terms are, and be sure to verify with them that the extra amount will be allotted toward principal, and not interest or interest-plus-principal.

- Make an extra payment each quarter. Set aside money every month toward an extra mortgage payment and once a quarter apply it to your principal. You’ll save a ton of money in interest and could shave years off your 30-year mortgage. Again though, first be sure to find out what your lender’s rules are about extra payments.

4. Improve your home to increase its value

There are a lot of factors at play in terms of how your home’s value appreciates, including the economic growth of your neighborhood, supply and demand, and proximity to certain amenities. And while you don’t have much control over those, you can affect your home’s market value in a positive way by keeping your home well maintained and putting in certain improvements.

Some improvements net more returns than others, so be sure to focus on those instead of wasting money on things that won’t necessarily add value to your property. Remodeling offers Cost vs. Value data for home improvement projects that is searchable by your own city or region so that you can see exactly what’s getting the biggest bang for its buck in your area. You may be surprised to learn that a mid-range bathroom addition will pay off more than an upscale bathroom addition, or that there’s a lot of value to be gained by improving the accessibility of your home.

In addition to home improvement projects, you should also be taking care to maintain your home in the best shape possible. Regular maintenance activities like cleaning out gutters, replacing filters, and making small repairs as they come up will all help your home hold its value so you’re not losing equity through decreased market worth.

The big takeaway

There’s a lot to be gained from making a concerted effort to build equity in your home faster. Putting in more money now might seem difficult to imagine, but it’s almost certainly going to be worth it in terms of your future financial health.

To figure out what’s right and doable for you when it comes to building equity, crunch the numbers either on your own or with the help of a trusted financial advisor. See what it will take to knock a couple years off your mortgage or to chip away at your principal more than you already are each month. And if it’s not financially feasible right now to increase your rate of equity building, don’t worry—while it’s better to start early, starting late is better than not starting at all.

Also read: Vastu tips for positive energy at home

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Source: moving.com