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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