Real Estate Solutions

Real Estate Solutions Simplifying Real Estate June 2015

Welcome to the June edition of Real Estate Solutions! What's Inside... Guest Post Realty Tweet Project in Focus Hot property picks Deals that stole the show in April Snippets from May Some special moments from our 4th Anniversary celebrations! With the temperatures soaring above a 45 degrees and summer vacations in schools, it was but natural to see all the amdavadis head for vacations to locations with better weather to beat the heat. So, while most of the month of May was more or less relaxed, the office concentrated on foccused selling and achieved the desired results by the end of the month. The 23rd of May marked the completion of RE/MAX Realty Solutions 4 years of being in the Real Estate business. The team celebrated this momentous occasion with a party in the office which also saw the Broker Owners from other RE/MAX offices in Ahmedabad grace the occasion. A heartfelt thank you to all of our esteemed clients for standing with us for the last 4 years and for being a big reason for our success, we would also like to send out a thank you to RE/MAX India, RE/MAX Gujarat and the RE/MAX network as a whole for their support and consant encouragement and last but not the least, we would like to express heartfelt gratitude to our agents who are the heart and soul of our business, who are today more like family than collegaues. Our June edition has some great insights on taxation in Real Estate, Real Estate updates, some great investment opportunities available with us in addition to some updates on what has been happening at RE/MAX Realty Solutions. Hope you find it a good read! Cheers to a super productive month for one and all! 2

Guest Post Tax planning in Real Estate investments A penny saved is a penny earned. Nothing can be truer than this when it comes to smart investing through better tax planning. Many investors look only at the gross returns while evaluating the merit of a financial investment. Irrespective of class or income, Indians are fond of buying gold and real estate. Purchasing and selling the metal is a straightforward game but a property, through its lifecycle (buying, owning and selling), can be taxing. If played right, you can reduce the tax outgo. Capital gains Implications on sale of Real Estate Property Mr. Vartik R. Choksi (M.Com., ACA, CPA) According to section 2(42A) of Income tax Act, 1961, Short-term capital asset" means a capital asset held by an assessee for not more than thirty-six months immediately preceding the date of its transfer. Resultantly, if the property sold within 36 months from the date of purchase than it would be liable for short term capital gain. Short term capital gains on sale of property shall be taxed as per normal tax rate. According to Section 2(29A) of Income tax Act, 1961, Long-term capital asset" means a capital asset which is not a short-term capital asset.thus, if the property kept for more than 36 months then profit earned on such sale would be liable for long term capital gain. According to Section 112 of Income tax Act, tax liability on Long term capital gains would be attracted at the rate of 20% plus applicable Surcharge plus Education and Secondary and Higher education cess. Incentives available in Income tax provisions while buying a house Interest on Borrowed Capital (Section 24(b)) Where the property has been acquired or constructed with borrowed capital on or after 1.4.1999, the deduction can be availed on account of interest to the extent of Rs. 200000/- annually. In case of property being self-occupied & its Gross Annual Value is considered Nil, for this purpose the acquisition or construction of the property should be completed within 3 years from the end of the financial year in which the capital was borrowed. In case the property for which the Home loan has been taken is not self occupied or whose Annual value is not claimed to be Nil, section 24(a) grants standard deduction of 30% of Net annual value. Moreover the taxpayer can claim tax deduction of the whole interest amount. Principal repayment of Loan The deduction of principal repaid is allowed under section 80C of Income tax Act, 1961. Earlier, the deduction was restricted upto Rs. 1,00,000 but with the introduction of Finance Act 2014 the same is increased to Rs. 1,50,000. The deduction U/s 80C is available on payment basis irrespective 3

Guest Post Tax planning in Real Estate investments of the year for which the payment is made.additionally, stamp duty, registration fee and other expenses for the purpose of transfer of such house property to the assessee is also allowed as deduction under Section 80C. However, tax benefit of home loan under this section is allowed only after construction is complete and completion certificate has been awarded. No deduction would be allowed under this section for repayment of principal for those years during which the property was under construction. But, if the property in respect of which deduction so claimed is transferred within a period of five years the aggregate amount of the deductions of income so allowed shall stand to be withdrawn. Key areas to consider while buying the property Stamp duty and registration charges Stamp duty and registration charges vary from state to state. Stamp duty charges and Registration fees in most of the states is given in the terms of percentage of the total value of transaction. But, many states in India provide concession to females with respect to payment of stamp duty. For example the stamp duty rate for male in Delhi is 5% whereas for female the same is 3%. Female investors in Gujarat save 1% registration fees. Thus, while purchasing the property it is beneficial to purchase the same in name of female if the stamp duty act of the respective state provides benefit to the females. Burden of Loan interest For self-occupied property section 24(b) of Income tax Act, 1961 allows interest expense to be claimed as deduction to the extent Rs. 200,000. However, in case the liability of interest exceeds Rs. 200,000 it is advisable to take the loan in Joint name so that the exemption limit of Rs. 200,000 is availed to more than one person and hence the limit of Rs. 200,0000 can be increased with the increase in number of persons. Execution of registered deed at prevailing Jantry rates as to avoid litigation A sale deed, also referred to as conveyance deed, is the main document in a transaction of sale and purchase of property. A sale deed acts as the main legal document that evidences the sale and transfer of ownership of property in favour of the buyer from the seller. It also acts as the main document for further sale by the buyer as it establishes his proof of ownership of the property. Thus, to avoid litigation at later stage it is better to execute the registered deed as prevailing market rates. 4

Realty Something to look forward to - With RBI cutting the repo rate further by 25 basis points, the number of rate cuts this calendar year goes to 3 which should see the banks passing on the benefit in their lending rates; a relief that buyers looking at home loans can look forward to. One can already see the benefits of these cuts being passed on to the buyers by a few banks. Hope for the best - Housing sales have started showing signs of improvement but full recovery is expected only in the next financial year with the real traction in demand starting this festive season as per apex body CREDAI. Read more at: http://economictimes.indiatimes.com/articleshow/47532288.cms?utm_source=contentofinterest&utm_ medium=text&utm_campaign=cppst http://realty.economictimes.indiatimes.com/news/residential/home-prices-to-see-20-hike-by-fy17- credai/47536290 For the very first time The Gujarat government is all set to announce a redevelopment policy so as to build affordable housing in place of old colonies. Apart from direct benefits to the home owners whose homes become a part of such redevelopments, the government will look at optimizing the use of such available land by making use of change in FSI norms and building multistoried buildings in turn providing more affordable housing. Read more at : http://www.gharabari.com/news-india-gujarat-govt-to-adopt-%27redevelopment-policy%27-foraffordable-housing-in-state-16244 Taxing unsold stocks is on the books now : In a move to stop the hoarding of unsold inventory by developers, the Income tax department has decided to start levying taxes on the Annual Letting Value (ALV) for unsold stock lying with Real Estate developers/ builders. The unsold stock has so far been exempted from income tax under the stock-in-trade" category. This move majorly aims at reducing the artificial scarcity doing the rounds through hoarding of flats, however how this gets implemented is still to be seen! Read more at : http://www.gharabari.com/news-india-fresh-tax-on-unsold-flats-to-force-developers-to-releaseinventory-16258 5 5

Project in Focus H1 One of the projects that our team is focusing on is H1, a residential project with just 9 apartments that you wouldn't want to miss. With 3 apartments already sold and 6 just remaining, this is a project that should definitely be on your checklist to check out! Our top performing agent, Tejas Shah has been doing focused marketing for this project and he would love to share more details with you! 6

Project in Focus 31 IVY - 3 & 4 BHK High End Apartments & Pent Houses, Opp Grand Bhagwati, Off S G Road, Bodakdev A project with only 18 High End Apartments and Pent Houses with only 2 units on each floor, this project is fully equipped with amenities like swimming pool, gymnasium, kids play area, Common Garden, sit outs, security systems, visitors parking. Key features : 3 BHK Apartment with Servants Quarters of 2646 Sq ft and 2 Allotted Car Parking. 4 BHK Apartment with Servant Quarters of 3365 Sq ft and 3 Allotted Car Parking. The internal specifications of 31 IVY are of the best quality with Italian Marble in Living Room, Dining Space and Common areas, Wooden Flooring in Master Bedrooms and Balcony, Air Conditioners of Daikin in all Bedrooms and Living Room and Dining Room. Possession in Jan 2016 For Fit outs, Just 7 To 8 Months From Now. 7

Hot Property Picks! For sale Investor floor for sale in Earth Arise, S.G.highway, Ahmedabad, India Total area is 9860 sq.ft. The architects and builders state that it is in sync with directives passed by the U N Development programme and the USGBC Board. More Details Click: http://www.remax.in/505023024-17. Manthan For Rent 1st floor show room on rent in Binori Ambit, S G Highway, Ahmedabad, India. Amenities like Lift/Elevator, Parking, Security System. More Details Click: http://www.remax.in/505023018-44. Hirav Shah For sale 5bhk Bungalow for sale in Balaji Green Valley Located on Ambapur Road, Near Narmada Canal, Adalaj, S.G Highway, Ahmedabad Amenities like Club House, Private Swimming Pool, Lift/ Elevator, Yoga & Meditation Centre, Snooker Area, Green Garden landscaped area, High - End Security Systems, 100% Landscape Developed by Builder More Details Click: http://www.remax.in/505023015-172. Rahul Jain 8

For sale 1100 Sq Ft Office for sale in Shapath 5, S. G. Highway Best Commercial Landmarks on S G Highway, Opp. Karnavati Club Centrally AC office and Foyer spaces with allotted Parking More Details Click: http://www.remax.in/505023025-1 Sheel Shah For rent 4Bhk high end, fully furnished bungalow for Rent Located near Thaltej-Shilaj Road Plot size is 664 sq yards and construction is 472 sq yards It is a furnished Villa with swimming pool, garden parking etc. More Details Click: http://www.remax.in/505023017-93 Tejas Shah For sale 4bhk flat on sale in Westend Park, Bodakdev, Ahmedabad, India. It is a 275 sq yds flat on a higher floor in a high rise building. It gives a beautiful view of R2 zone in Bodakdev. More Details Click: http://www.remax.in/505023023-160. Vikram Chandnani For sale 4959 Sq Ft high-end apartment for sale in 15 The Address Located at Ambli Bopal Road, Ahmedabad, India Size Of the apartment is 4959 Sq Ft (Super Built Up) More Details Click: http://www.remax.in/505023016-235. Parshva Vakharia 9

Deals of the month Customer Delight knows no boundaries One of the biggest strengths of RE/MAX is the fact that being the World s #1 Real Estate Company gives us an edge when it comes to being reliable and trustworthy. This is the reason why that when Indians residing outside of India think of investing/buying/selling in India, they prefer to deal with RE/MAX agents. Tejas Shah In one such case, one of our top performing agents Tejas Shah serviced an NRI couple, Mr. Hasmukhbhai Patel & Ajita Joglekar and his attention to details and his thorough professionalism was the reason for him receiving a thumping testimonial by the esteemed clients. We would like to send out a thank you to the couple for their kind words of appreciation and would like to congratulate Tejas for this lovely endorsement.

Focused selling yields results Our project in focus last month was Heritage Opus and one of our newest Agents Sheel Shah put in all his energy and effort to do focused selling of this project. He ended the month of May by selling two apartments in the project. Doing us proud by showing such amazing levels of dedication, we would like to congratulate Sheel for this achievement. With just 3 apartments plus 2 pent houses left in the project, we wish Sheel and the rest of the team all the best in selling the rest of the inventory. Sheel Shah 11 11

Congratulations to our top performers of the month of May Tejas Shah Top performer for the highest volume achieved Recipient of the best customer testimonial in May Sheel Shah Top performer for the highest value achieved Implementing the philosophy of The more you Learn, The more you earn The team at RE/MAX would like to send out a big thank you to RE/MAX Gujarat for arranging a wonderful training session for all the Agents! The monthly team meeting saw projects and monthly goals being reviewed and discussed, the meet also had the developers of the 31ivy project discuss the project in detail with the team. The meet ended with the top performers of May being recognized and rewarded! 12

Some special moments from our 4th Anniversary celebrations! Celebrating 4 years of servicing clients in Real Estate; Thankful for a Glorious 4 & looking forward to more! 13 13

WE Are Expanding Our Team! 14

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