Maharashtra to hand over forest land for Navi Mumbai Airport

The ambitious Navi Mumbai Airport project has inched another step closer to reality, with Maharashtra issuing a government resolution to hand over 250.0635 hectares of forest land in Raigad district to CIDCO, for the airport’s development

 

The Maharashtra government has decided to hand over 250.0635 hectares of forest land in Raigad district to the City and Industrial Development Corporation (CIDCO), for the development of the Navi Mumbai International Airport (NMIA).

Of the total forest area, 108.607 hectares is under mangroves, while 141.4565 hectares is reserve forest land. The revenue and forest department, on July 11, 2017, issued a government resolution in this regard.

NMIA is touted to be one of the most ambitious projects undertaken by the state government, which is set to change the economy around Mumbai. The new international airport will have better facilities and higher capacity to handle passenger, as well as cargo traffic.

The airport and its allied facilities require 2,268 hectares of land, out of which 1,160 hectares would be utilised for aeronautical purposes.

It is to be developed through a public-private partnership, by way of setting up a special purpose vehicle (SPV). In the SPV, CIDCO and its nominees would have 26 per cent stake.

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Maharashtra reduces registration, permit time for ease of doing business

A year after the landmark concept of ease of doing business was introduced at the World Bank’s instance, the Devendra Fadnavis-led government has drastically shortened the period for property and sales tax registration, electricity connection and construction permits to start a business.

A battery of top bureaucrats led by the chief secretary made a PowerPoint presentation before the World Bank team in the presence of the chief minister on steps the state has taken to end procedural wrangles and red tape in key sectors.

"Last year, our performance was not up to the mark. As a result, our ranking was very low. Now, we have brought in changes and cut registration time drastically. In addition, we have submitted physical data before the World Bank team for verification. Now, we are better placed in terms of performance," a senior bureaucrat told TOI.

The bureaucrat said the state submitted data on 21 power connections in Mumbai with 100 kva to 150 kva load. The average time taken for providing the connections was nine days and only two documents were required—identify and occupancy proofs. All applications were to be submitted online.

For registration under the Shops & Establishments Act, the bureaucrat said the procedures have been reduced to one from two and the total time reduced to half a day from four to eight days earlier. The entire process is online, including payment. All physical touch points have been eliminated, including inspection before issue of certificates. "We received 65,535 applications, of which 60,584 have been approved and 4,951 are rejected. All completed applications were approved within a single working day," he said.

Procedures for construction permits have been reduced to eight from 42 and total time taken for all approvals during the construction cycle to less than 60 days from 164. "We have introduced a single-window clearance system, including for building plan and plinth approval, completion and occupancy certificates, and a common application form. There is no need to apply or follow up with various departments for NOCs or approvals."

Elaborating on the impact of reforms, the bureaucrat said between June 1, 2016, and May 31, 2017, the BMC received 3,157 plans, of which 1,923 were approved, 834 rejected, 251 amended and 148 are under process. "The average time taken for approval during the past one year was 17.6 days. In the past six months, 48 building plans were approved within seven days," he said.

On registration of properties in Mumbai, the bureaucrat said the number of procedures has been reduced to six from seven. Total time taken for all procedures to register a property has been reduced to 22.5 days from 45.5. Records of rights and title deeds are available online. Cost associated with registering property has been reduced to Rs 30,405 from Rs 51,800. Besides, dispute resolution must be completed within four months.

The period for registration of value-added tax has been reduced to one day from 10 and the cost to Rs 500 from Rs 525. Professional tax registration must be done the same day from two days earlier, since the procedure has been merged with VAT. "Reforms undertaken by the Fadnavis government will go a long way in improving the state’s ranking," said the bureaucrat.

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Second homes, your first choice?

Does buying a second home seem like an ambitious idea? Fret not, as we tell you how you could make the most of a weekend home. Read on...

Buying a home in a city such as Mumbai can prove to be a herculean task. Imagine you shelling out more money to buy one more home? Wouldn't it give you sleepless nights? We tell you why it's not such a bad idea. The concept of second homes has been gaining immense popularity among Mumbaikars seeking a peaceful abode, away from the noisy city life, to relax and unwind them.

"Different people have different reasons for buying a second home. While some may buy one to spend vacations with family, others may simply buy it to reap investment benefits in the future. One may not be able to always travel too far away from one's workplace for a vacation, due to time constraints. In such scenarios, a home close to your workplace or original place of residence turns up well as a probable solution. In case of investors too, it is quite simple to understand their reasons for investing in a second home. While some investors are simply looking for avenues to tie up their money, others are looking for investments, which will fetch them high and steady returns and it is no hidden fact that the real estate sector has been, for the last two decades, the best bet when it comes to good investments," feels Vi jay B Pawar, Founder and Director, Mirador Dwellers Pvt Ltd.

Why second homes?

Experts believe that Mumbai's real estate segment has witnessed a spree of changes in the last two decades. Mumbai, unfortunately hasn't turned out the way it was envisioned to, when the city was being planned decades ago.

Due to this, even though people own homes in the city, they are still on the lookout for second homes for a relaxing getaway away from the hustle and bustle. Anuj Puri, Founder, Anarock Property Consultants points out, "The primary objective for most Mumbaikars is to secure a self-owned home, which is in itself, a massive financial undertaking. For those fortunate enough to be able to afford a second home after this objective is fulfiled, it can be seen as a major income-generating asset, a source of financial security and if the second home is a weekend getaway, a significant lifestyle enhancement."

Location hunt:

A family looking for a short vacation or a young couple looking to blow off some steam after a hectic week at work, find their solace within the confines of their second home. There also exist those people who like to see a handsome ROI on every single penny that they invest anywhere and for such people, real estate investment is always seemingly lucrative and inviting. These people have started to move away from investing in open land and are slowly moving towards buying ready-to move-in homes or plots, which allow them to build a second home of their choice and their convenience.

"As there is a lack of greenery in cities, buyers opt for Matheran, Mahableshwar as potential second home options. Closer to the city, you also have places such as Lonavala, Murud, Karjat, Dahanu and others, which can act as weekend spots. People who prefer beaches over the mountains have Kashid, Goa as options," suggests Rushabh Vora, co-founder and director, SILA. Experts suggest that for rental income and capital appreciation purposes, areas in Navi Mumbai, Thane and Panvel are suitable. Locations like Kanjur marg and Mulund also work well.

For weekend homes, the obvious choices include Lonavala and Khandala, Alibaug, Igatpuri and the greener outskirts of Pune. Goa is also suitable for those who are not averse to long road trips or flying.

"In the holiday home segment, we have recognised two types of buyers one that loves the dense greenery of mountains and hills and the other that loves the vast expanses of the riv er and fields. For the mountain and hill lovers, the ideal location could be the Nilgiris and the de sign of the home can be designed keeping the colonial Britain in mind, whereas, for those who are interested in waterfront homes, the design should be adaptable to the given environment and meet the local needs and lifestyle of the residents," opines Nibhrant Shah, founder and CEO, ISPRAVA.

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Now, no property tax on flats under 500 sq ft in Mumbai

Soon, homes in the city of up to 500 square feet will be exempt from property tax and those sized between 501 sq ft and 700 sq ft will get 60% discount on the tax. Shiv Sena has fulfilled its electoral promise by clearing the proposal at the BMC's general body meeting on July 6.

The proposal will be sent to the municipal commissioner to analyze the financial implications of the move and to find out how many homes will benefit in the city. The commissioner will then send the proposal back to the civic house for discussion. Once the house approves the commissioner’s recommendations, it will be sent to the state government for its final approval.

While activists said they are happy with the move, they added that the city’s old inhabitants—quite literally, "grandparents have occupied premises more than 50 years ago"—should be given similar exemptions for bigger houses, as they are forced to pay property tax according to its present market value.

Housing activist Chandrashekhar Prabhu said, "It is a welcome move. But why are they differentiating between residents of smaller houses and those who have lived in bigger spaces for generations? For instance, my family bought an over 800 sq ft flat 70 years ago for a few thousands and we have been living here ever since. Today, the civic body charges us property tax according to the flat’s market value. This is completely wrong. I do not make that much to pay the tax. It is a ploy to throw out the city's original inhabitants."

It was Shiv Sena leader Yashwant Jadhav who moved the proposal in the BMC house on July 6. Surprisingly, the proposal got cleared without debate.

Jadhav said, "The state government will have to clear the proposal because it will not lose anything. The BMC will lose revenue while providing relief to citizens, and we are prepared for it. It was one of our poll promises, which we fulfilled."

The BJP, though, said it was the first party to demand the waiver and wanted to add more benefits for slum dwellers, but in vain.

Most of the houses in the city are 1BHK or mostly up to 500 sq ft carpet area.

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How will GST impact the cost of homes

Here is how home prices in various segments of the property market will be affected by the GST

 Under the Goods and Services Tax (GST), the effective tax on under-construction projects has gone up to 12 per cent, which is an increase of 6.5 per cent.

 The actual GST rate is 18 per cent on realty, but allows one-third of the tax to be deducted from the land value, from the total cost charged by the developer. While the GST gives an option of getting full input set-off credit, this is not applicable on ready-to-move-in flats and as a result, developers will have to bear the burden of the higher tax or pass on the same to the end-consumers or increase the overall prices, to match the new tax burden, say developers. However, new flats will cost less, giving some breather to the developers of upcoming projects.

“While developers might still get some benefits for projects that are in the nascent stages, they will have to bear the tax burden for ready-to-move-in projects, since they are kept out of the GST’s ambit,” House of Hiranandani’s chairman and managing director, Surendra Hiranandani said. Under the GST regime, tax on under construction projects would be 12 per cent, an increase of 6.5 per cent for buyers, points out Rohit Gera, managing director of Gera Developments. “There is an option of getting full input set-off credit on all input side if GST is paid by them, but this is not applicable on ready-to-move-in properties. As a result, developers will either have to bear the burden of the tax, since it cannot be passed on to the end consumers, or the rates of apartments that are ready-to-occupy will increase to the extent of the taxes,” Gera said.

Vinod S Menon, CEO of Bengaluru-based mid-market developer Citrus Ventures, says “Everybody talks about the positives that GST brings in. However, the devil lies in the details and no one seems to have any clarity on that.” Although the one-third deduction makes the effective rate 12 per cent, with current effective VAT plus service tax rate being nine per cent, there is still a three per cent incremental charge.

“Since no retrospective claim of credits is possible, this will be a bone of contention between customers and developers, as to who will bear this, he said. Coupled with the new RERA regulator, GST will increase paperwork and thus, the overall cost, Menon said.

However, Knight Frank India chairman Shishir Baijal, feels that akin to the note-ban, the GST would trigger some momentary disturbances but augur well for the industry in the long term. “The intention of the GST, is to bring in efficiency in the entire tax system and its implementation will see some teething issues. Eventually, it will pave the way for an extremely efficient tax system for the country,” he said. Echoing similar views, SILA founder and MD Sahil Vora, said there will be pain and forced consolidation in the sector, but in the long-run everybody will benefit.

Anarock Property Consultants’ chairman, Anuj Puri said, the affordable housing sector will not be impacted by GST, as there will be no tax under GST for affordable housing schemes. RICS south Asia managing director Sachin Sandhir adds, “The affordable housing sector is happy, as there is no tax on it. Since almost 70 per cent of the market caters to the middle to high income segment, the GST could shift the focus of smaller developers towards the high volume, low to medium income segment.”

According to Ram Chandnani, managing director, advisory and transactions services, India, CBRE, the GST will also attract international residential investment, as it has been seen globally that a unified tax structure has been one of the many catalysts for increased investments. “Additionally, sectors ancillary to real estate, will see improved supply chain efficiency with the removal of various federal tax barriers and the creation of a common market, thereby, accelerating the delivery of goods,” he noted.

India Ratings maintained a negative outlook for the real estate sector for FY18, on expectations of a continued slump in the sale of residential units. This will lead to continued negative cash flows since FY14 and a further increase in already high debt levels, resulting in a weakening of the sector’s credit profile.

Rohit Jain, a partner at law firm Economic Laws Practice, maintains that greater clarity is needed on the transitional provisions under GST, whether it pertains to credit of inventory, credit on unsold stock or the tax implications where part payments are made under the pre-GST and part under the new taxation system.

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Now, govt plans 10 smart railway stations

NEW DELHI: Ten railway stations in Delhi, Uttar Pradesh, Andhra Pradesh, Goa, Rajasthan and Kerala will be redeveloped as smart stations in a few years.

These stations -Tirupati, Sarai Rohilla (in Delhi), Nellore, Puducherry, Madgaon, Lucknow, Gomtinagar, Kota, Thane (New) and Ernakulam - will get iconic structures with modern state-of-the-art facilities, passenger lounges and congestion-free non-conflicting entry and exit to station premises. These will also have commercial space to set up business centre, offices, studio apartments and hotels.

In order to fast-track the process, Rail Land Development Authority (RLDA) and National Building Construction Corporation (NBCC) signed an MoU on Friday in the presence of railway minister Suresh Prabhu and urban development minister M Venkaiah Naidu. The railways has embarked on an ambitious project to redevelop 403 stations with the participation of private players, public sector entities and foreign agencies.

NBCC chief Anoop Kumar Mittal said the 10 stations will be developed on public-private partnership (PPP) model and self-sustaining finance model through commercial exploitation of vacant railway land. He added the commercial use of built-up space and air space over tracks shall be leased out for a period of 40-60 years.

RLDDA and NBCC will set up a special purpose vehicle to execute the project.

Prabhu said, "We have chosen PPP model and are roping in varied agencies to execute the project namely Railways' own PSUs, other Central government PSUs, foreign countries through government-to-government cooperation and state governments."

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Maharashtra CM approves cluster redevelopment in Thane city

 MUMBAI: Nearly three weeks after the Bombay high court cleared the decks for cluster redevelopment in Mumbai suburbs, Thane and Navi Mumbai, chief minister Devendra Fadnavis approved the regulation for the reconstruction in Thane city by implementing the urban renewal scheme.

“This will pave way for redevelopment of old, dilapidated & unauthorised buildings in planned manner & in large public interest,” Fadnavis tweeted on Thursday.

In Thane, cluster redevelopment projects will get an FSI of 4, depending on the width of the road next to the project. To ensure the policy does not further crowd the region, the minimum size of a cluster will have to be 10,000sqm, said an official. Builders will also have to develop public amenities on 25% of the plot, leave 15% for open spaces and implement development plan reservations.

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