Vastu tips for choosing a new apartment

If you are about to buy a new home or an apartment, there are several Vastu aspects of the property that you must check. Here’s a quick guide

The Indian architectural science of Vastu Shastra has been a basis for identifying and developing the best living spaces. Vastu-compliant plots and homes, help the inhabitants to live their lives with more happiness, wealth, health and prosperity. This ancient practice has gained popularity in the real estate space, for identifying the best places, plots and structures for residential, as well as commercial purposes.

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Vastu compliant entrance

While evaluating the design plan or layout of a plot or a construction (flat or apartment), the first consideration should always be for a good entrance. The entrance holds the key to ushering in positivity and happiness for the entire family.

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Each living space has 32 possible locations that can function as an entrance of a building. Each of these 32 locations has their own significance and affects our lives accordingly. For instance, an entrance in the southeast zone, the Vastu zone of cash, results in delayed payments. A southwest entrance is among the least Vastu-compliant entrances and families living in such homes can face monetary and relationship issues to a great extent.

On the contrary, if you have an entrance in the north, you can expect great success in monetary and business matters, as well as opportunities in your career. If your chosen property or apartment does not have a Vastu-compliant entrance, you can still buy the property and apply certain simple Vastu remedies.

 

Vastu compliant room direction

The correct location for a room ensures that you benefit the most from that room. Each room has a positive or negative effect, on the lives of inhabitants of the house, depending on the zone in which it is located.

For instance, a living room in the east zone is ideal for developing and strengthening social connections. On the other hand, a bedroom between the east and southeast should be avoided as per Vastu. Sleeping in these zones results in increased anxiety and disagreements with one’s spouse.

One should avoid building a toilet between the north and the northeast zones in the house. It can severely affect the immunity and health of the members of the family living in the house. For kitchens, the southeast is an ideal zone. One should avoid having a kitchen in the northeast and southwest zones.

 

Panchtattava or the analysis of the five elements

A living space is divided into 16 zones or directions in space. Each zone has a corresponding main element that affects different aspects of our life. For example, the north zone has water as the main element. The main attributes of this zone are wealth, growth, career, monetary gains, etc. Consequently, any imbalance in this zone has a direct impact on the career, business and monetary health of the inhabitants.

Similarly, fire is the main element of the south zone. The main attributes of the south zone are sleep and relaxation.

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While purchasing a home, one needs to check the location of different rooms and internal elements that make up the home. These include kitchen, toilets, balcony, slopes, open areas, water tanks, gardens, service lanes, water storage of neighbors, rainwater drainage, the building’s height, shafts, etc. It is important to verify that each of the 5 elements or Panchtattava, is present in its respective zone – water in the north, the air in the east, fire in the south, earth in the southwest and space in the west.

 

Modern Vastu and space programming

What if you have already purchased a property or paid the booking amount? In such cases, you can use the fourth check of Vastu – space programming. With modern Vastu applications and techniques, you do not need to deconstruct or demolish your property. Through simple and effective Vastu techniques and remedies, you can balance the elements in a particular zone. The use of colors, shapes, lights, metals and symbols, are highly effective in this regard.

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Does Nomination ease inheritance process?

While nominations can be given for shares, bank deposits, mutual fund investments, bank lockers, the rules and implications for immovable properties are different. Here’s how they operate.

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The reply to a question raised in the Indian parliament revealed that deposits worth Rs 5,124.98 crores were lying unclaimed for 10 years or more, with scheduled banks. This is a huge amount, considering the fact that banking facilities are generally availed of by educated people. These unclaimed deposits could have been significantly lower if the depositor had appointed a nominee for his bank account/deposit. Here’s a look at what nomination is and its effect on succession.

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What is nomination?

The nomination is a process, whereby; a person authorizes someone to receive the assets on his/her behalf, after death. It comes into operation, after the death of the owner. The specified asset is transferred in the name of the nominee.

 

Rights of nominees and legal heirs

There is a general perception, that the nominee becomes the owner of the asset, once it is transferred in his name or is handed over to him. However, the rule is subject to a few exceptions, that the nominee becomes a trustee to hold the property on behalf of the legal heir.

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Under the Insurance Act, an insurance company is discharged of its liability, once it pays the amount of claim to the nominee. It is the responsibility of the nominee, to hand over the claim amount to the legal heir/s. The judiciary has made this amply clear. The Supreme Court, in the case of Sarbati Devi, which was decided in 1983, held that the nominee is a trustee of the property and is liable to hand it over to the legal heirs. This applies to deposits in bank accounts, as well.

Those who reside in cities, often have their residential properties in cooperative housing societies. The cooperative society laws that are applicable in each state govern such properties. According to Section 30 of the Maharashtra Cooperatives Societies Act, for instance, the society is legally allowed to transfer the property in the name of the nominee, in case the owner has submitted the nomination form to the society, in respect of that property. However, such a nominee, who is registered as the owner of the property in the records of the housing society, represents the legal heir/s It is only the legal heir/s, who have the beneficial ownership rights of the flat, ruled the Bombay High Court, in the celebrated case of Ramdas Shivram Sattur in 2009, which dragged on for 25 years.

In the case of provident fund dues and shares in companies, the law provides that the nominee becomes the legal and beneficial owner of such property. Therefore, in the case of shares in a Demat account, the nominee shall become its absolute owner, as decided by the Bombay High Court in the case of Saraswat Bank Limited.

What should you do?

Homeowners should make nominations for all their assets, wherever such a facility is available. As the nominee/s are also the legal heir/s in most of the cases, the making of such nominations, will help the transfer of the asset to the legal heir/s. Even in other cases, it will ensure that that the property does not remain unclaimed or become subject to litigation. While making a nomination for shares and provident fund dues, one needs to remember that the nominee will become the owner of these assets.

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Impacts GST will have on Real Estate

With the GST Bill being passed in the Lok Sabha on March 29, 2017, it seems certain that it will meet its July 1, 2017, deadline for implementation. We analyze how the latest version of the Bill will impact the real estate sector.

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With 4 crucial bills on GST being passed in the Lok Sabha on March 29, 2017, it’s now a certainty that the GST would be implemented from July 1, 2017. The GST is being touted as the game-changer as it would replace several taxes, cesses and surcharges at one go. The realty market is expecting to benefit from the GST rollout, in a major way. Incidentally, the real estate sector will come under the GST ambit within one year of its rollout.

Experts explain that, with the passage of India’s biggest tax reform in decades, we will become a unified market, with one tax for all goods and Services. Once implemented, GST will significantly ease the ambiguity around our taxation system, promote ease of doing business, encourage more Foreign Direct Investment and stimulate overall growth of the economy.

 

Positive impact on the taxes

Experts believe that in the present tax system, there are a lot of different taxes that one has to pay, like the VAT or the local body taxes. GST will subsume all these taxes into it. Instead of paying various taxes, at various states and cities, we would soon have just one tax, that is going to benefit us. So, in this process, a lot of labor will be saved, along with large sums of money. Also, we look at taxes to be in line with the standard of the absorption of the industry. We as an industry, who have been suffering from the excess of taxes, which in sum, amounts to 40%; if all that can be reduced then it’s a big advantage to all of us.

 Ambiguity on how will GST impact real estate industry

According to experts, there still exists some ambiguity about to the overall impact of the GST on real estate, as per the recent announcements based on the legislations introduced for approval in the Lok Sabha March 29, 2017.

While questioning the new setup, experts say, that he overall impact is still to be assessed and a few questions come to mind. As the government promotes a cashless economy that encourages the purchase of properties using institutional/bank finance, how then does the GST on EMIs for the under-construction impact the homebuyer? Furthermore, with REITs slated to bring the much-required additional liquidity into the real estate sector, how does the GST on leasing/renting within a REIT impact the overall ROI for investors.

Will homes cost more for homebuyers post GST?

The latest version of the GST bill states that the leasing of a building, in part or whole which includes a residential and commercial building, would be considered as service rendered as per the GST bill. At present, service tax is only levied on the commercial and industrial units that are rented out but the residential unit is exempt from such taxes. Service tax and VAT will be replaced by the Central GST and State GST whereas, stamp duty will remain unchanged as it is out of the purview of GST. Two aspects that will define the impact of GST on the sector, is the rate and abatement for land value in total agreement value of residential and under- construction homes,

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Experts believe that lowering costs on account of input credit allowance could lower prices, if developers are willing to pass on the benefits to the end-users, resulting in a saving of up to 20% for the home buyer. Overall, with the implementation of the GST, the consumers may need to bear slightly higher taxes but they could still pay lower prices for the property if the developers pass the benefits of input credits, to their customers.

GST’s impact on the realty sector

  • Under-construction homes to attract GST.
  • Leasing and renting of land and building would invite GST.
  • GST to be levied on EMI of under-construction property.
  • Tenancy and leasing would be considered as rendering the service under the GST bill.
  • Real estate to come under the GST ambit within one year of the roll-out, which means stamp duties will continue to be levied till then.

 

10 Best Air Filtering Plants for your house, NASA approves them!

Summers are fast approaching. The heat in the atmosphere is gradually increasing and accordingly, the need for keeping environs of the house cool has increased. Hereunder, find some plants, which shall not only keep your house cool but will assist in inner environs pure.

Using space station technology to ensure the safety of your home may be easier than you thought. The National Aeronautics and Space Administration conducted the NASA Clean Air Study to demonstrate the effectiveness of particular plants to purify the air.

As homes become more insulated and efficient, they also make it easier to trap indoor air pollutants. Chemicals like benzene, formaldehyde, and ammonia can come from household items and pollute your home’s atmosphere without any visual warning.

Neglecting the quality of the air you breathe on a daily basis could result in serious consequences. Illness, allergies, asthma and frequent headaches are just a few of many inconveniences that come from airborne particles floating around your home. Air pollution is also one of the reasons the can affect your digestive system.

There’s no need to dish out hundreds of dollars on expensive appliances when you’ve got Mother Nature. According to NASA, there are plenty of plants that soak up harmful particles in the air and release fresh oxygen – all while adding a decorative touch.

Where does it all come from?
One of the scariest things about indoor air pollution is the seemingly harmless nature of its many sources. Listed below are some of the most common ways a home can become polluted.

• Glues and Adhesives
• Carpets (especially new carpets)
• Chemicals in household cleaners (instead of using poisonous household cleaners you can make your own natural household cleaners)
• Foam insulation materials
• Paint
• Pressed-wood products (plywood, particleboard, and medium-density fiberboard)
If plants are good enough for the pioneers of space travel than they must be doing something right. They also might spark a new found hobby of gardening as well!. The plants listed below are 10 of the most effective air filters Mother Nature has to offer.

1. English Ivy (Hedera Helix)

The English Ivy is ideal for pots because its invasive nature allows it to spread easily. The research found it to be particularly useful in eliminating airborne fecal-matter particles. The plant is also great for a family with smokers in it. Its ability to soak up carcinogens from second-hand smoke helps to purify small areas. It’s also versatile when it comes to growing conditions and doesn’t require much maintenance.

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2. Golden Pothos (Epipremnum Aureum)
NASA considered this plant one of the most effective choices for eliminating formaldehyde. People that have struggled to keep plants alive can rejoice – this one is incredibly hard to kill. It doubles as an effective eliminator of carbon monoxide as well. The vines grow fairly quickly and look great suspended from elevated areas.

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3. Boston Fern (Nephrolepis Exalta Bostoniensis)
This lush plant functions really well as a natural air humidifier. While it’s busy adding humidity to the environment it also does a great job eliminating formaldehyde. Its large feathered ferns span as large as 5 feet and allow just a single plant to have a noticeable impact.

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4. Dracaena (Dracaena Deremensis)
The long striped leaves of this plant can easily thrive indoors with only small amounts of sunlight and moderate watering. It’s an excellent way to eliminate trichloroethylene that comes from solvents and varnishes. A single plant can grow over ten feet tall, but pruning will keep it short if you prefer.

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5. Bamboo Palm (Chamaedorea seifrizii)
The Bamboo Palm can easily fit into smaller areas with indirect lighting. NASA found it to be one of the best air filters for benzene and trichloroethylene and a great humidifier. This palm is a bit smaller than others and easy to grow in shady areas. It releases a good deal of moisture into the air and is considerably resistant to insect infestation.

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6. Dragon Tree (Dracaena Marginata)
This plant is a widely popular option for office spaces and homes for its attractive look and effective purifying power. It pulls xylene – a chemical released from car exhaust, paints, and cigarettes – from the air with little need for maintenance. It can also be potted together and trained to grow into a braid for visual appeal and added purification.

Dracaena-marginata-Bicolor--Costa-Farms-Houseplant 7. Peace Lily (Spathiphyllum)

The Peace Lily is one of the most visually appealing plants on the list with its unique white flowers. It boasts one of the highest transpiration rates on the list as well. Use it to remove trichloroethylene, benzene, acetone, and alcohols from the air. Just be cautious of the plant’s high toxicity and keep it out of reach of children and pets.

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8. Lady Palm (Rhapis Excelsa)
The Lady Palm requires a lot of watering during the spring and summer but makes up for it with its heavy resistance to insects. The lush leaves of this palm grow thick and with rich color without much effort. It’s said to be a versatile and effective filter for multiple indoor pollutants.

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9. Spider Plant (Chlorophytum Comosum)
The Spider Plant requires natural light but shouldn’t be exposed directly to the sun. It thrives in moist environments with bi-weekly watering and grows at impressive speeds. Owners prefer to place these plants near the fireplace and kitchen where carbon monoxide may build.

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10. Snake Plant (Sansevieria Trifasciata)
The Snake Plant is unique in that it sucks in carbon dioxide and releases oxygen during the night. Many people chose to keep it in their bedroom or carpeted living room. It’s simple to take care of and prevents the formaldehyde that leaks from your carpet and wood furniture from sticking around the air.

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If you have pets then you should be aware that most indoor plants aren’t safe for pet consumption. If you plan on growing plants in or outside of your home you should be aware of their toxicity. You can consult with your vet and see how it may affect your dog, cat, or any other animal that may consume it.

Detoxifying your home is an integral part of the detox concept. This includes not only detoxifying your body but detoxifying your mind and the closest environments as well.

 

Which are the Vastu compliant colors for your house?

The colors in a home have a significant influence on its inhabitants. Hereunder is experts’ advice on selecting the right colors for the various rooms in your house

It is a proven fact that colors have a significant psychological effect on people. A home is a place where a person spends a major part of one’s life. As specific colors stimulate distinctive emotions in the people, it is important to have an appropriate balance of colors in one’s home, to feel fresh and live a healthy life.

 

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Colors for your home, as per direction

The colors have to be decided, based on the direction and the date of birth of the homeowner.

“While each direction has a specific color, at times, it may still not suit the owner. Therefore, homeowners should adhere to the general guidelines for colors as per Vastu Shastra, which entails the following key points:

  • Northeast – Light blue.
  • East – White or light blue.
  • Southeast – As this direction is associated with fire, orange, pink and silver colors can be used to enhance the energy.
  • North – Green, Pistachio green.
  • Northwest – This area is related to air. So, white, light gray and cream are the best colors.
  • West – It is the place of ‘Varun’ (i.e., water). So, the best colors are blue or white.
  • Southwest – Peach, mud color, biscuit color or light brown.
  • South – Red and yellow.
  • Homeowners must take extra precautions while choosing colors like black, red and pink, as these colors do not suit every person.

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Color guidelines, as per your home section

Experts point out that each section of your home requires colors as per its energy requirement, size, and direction. The color requirement of your home section should be as per its usage. People living in a home should keep the following points in mind while coloring the rooms:

Master bedroom: Ideally, the master bedroom should be in a southwest direction and hence, should be painted with blue color.

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Guest room/ drawing room: Northwest is the best place for the guest room/ drawing room and hence, a guest room in this direction should be painted with white color.

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Kids’ room: North-west is the best place for rooms for children who are grown up and go out for study purposes. As the northwest direction is governed by the moon, hence, children’s rooms in this direction should be painted with white color.

Kitchen: The southeast zone is ideal for kitchens and hence, the walls of the kitchen should be painted with orange or red color.

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Bathroom: North-west is the best place for bathroom and hence, the bathroom should be painted with white color.

Hall: Ideally, the hall should be in the northeast or northwest direction and hence, should be painted yellow or white.

Home exterior color: The exterior color of the house should be based on its owners. Colors, such as yellowish-white or off-white or light mauve or orange, can suit to people of all Zodiac signs.

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Colors that you should avoid in your home

Experts suggest that light shades are always good. Dark shades like red, brown, gray and black may not suit everyone, as they represent some of the fiery planets likes Rahu, Shani, Mars and Sun. Red, deep yellow and black should be avoided. Generally, theses colors have high intensity and it may disturb the energy pattern inside your house.

 

Should Indian real estate focus on women homebuyers, as a crucial TG?

Although women form a significant number of property buyers and influence the purchase decision, marketing campaigns revolving around them, remain rare. This Women’s Day, we examine the reasons for the real estate fraternity’s reluctance to focus on this crucial segment of home buyers.

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Even though women have emerged as a critical segment of homebuyers, real estate marketers continue to view women merely as part of families. Not surprising, the marketing campaigns of real estate projects, continue to portray women in a stereotypical fashion – in fancy kitchens or with children. Images of women are either used as models or as a homemaker who is buying a house with the family.

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Nevertheless, statistics suggest that real estate campaigns are far off their target, with this influential group of homebuyers. Women, today, control $28 trillion in annual consumer spending, as per a study. In terms of consumer spending, women drive almost 80% of all purchases. In terms of home buying, 74% women play the role of either a contributor or an influencer, as per a pan-India survey. This includes 32% home buying by single women across the top eight cities of India.

Why developers shy away from women-centric ad campaigns

Real estate professionals think that the problem lies in the mindset of most of the developers. It is not just the first-generation conservative developers, who reject women-centric marketing campaigns. Even the second-generation luxury developers do not want to risk market disruption.

It is tough to convince such builders that women, who are the single and a powerful consumer group in the housing market, do not need or desire validation of their life’s choices from your brand. It is your brand that needs to be validated by their choices.

It is a global phenomenon that women are used in real estate advertising, only to add an element of glamor. In the western property markets, there are instances of women being used to spice up ad campaigns. Home buying is still considered as a family affair, in our society. Hence, Indian real estate has shied away from using any form of sex in advertising, even though other segments overuse it, to sell anything from coffee to cars, with success. In a way, it is okay to not have objectification of women in real estate advertising, when your project offerings are not designed to meet the needs of women in general and the single women in particular.

 

Real estate purchase still viewed as a family affair

Experts point out that the thought of bringing women to the forefront of marketing campaigns never took Centre stage.

Home buying is such a family-driven affair that most of the time, the thought process revolves around how to tempt a family and not an individual. Some change is there in the mindset but we still have a long way to go, before we start thinking about women as buyers. For example, in south India, the focus is more on women buyers, even if the campaign is family-driven. However, in north India, the focus shifts to the male-driven family units. Women may be contributors today but so long as their independent buying does not reflect in numbers, the market’s orientation is unlikely to change.

Women in real estate and their portrayal

  • Women play the role of influencer or contributor, in 74% of real estate buying decisions.
  • Of this, 32% of buyers are single women, in the top eight cities.
  • Use of women in advertising has generally been to add glamor, rather than talking to this target audience.
  • With home purchase perceived as a family affair, developers still question why they need to talk to women, rather than how to talk to them.

 

What will you compromise with: Affordability or Needs while buying a house?

While affordability is the most crucial factor, when it comes to buying a house, there are a few other aspects that homebuyers should not compromise on. We look at how to strike the right balance

When it comes to buying a home, the biggest dilemma for home seekers often pertains to affordability – where should one draw the line between what is affordable and what is not?

  • If one opts for a big home, then, one may need to shell out a higher amount or opt for a house in the peripheral areas.
  • On the other hand, if one is particular about the location, then, the buyer may need to compromise on the size of the house or amenities offered.
  • If one opts for amenities, then, the buyer may need to compromise on size or location.

 

What is an affordable home?

An affordable home should have all the basic amenities, like sanitation, water and 24-hour electricity supply. It is also important to have security and social infrastructure, as well as schools, offices, parks and hospitals, nearby.

Experts point out that the amenities offered with affordable housing projects, also depend on its micro market. In tier-2 or tier-3 cities and other metropolitan cities, each location will have a balanced mix of affordable and premium homes in the same micro market. In such cities, the parameters that define affordability could be smaller-sized homes, standalone towers and fewer amenities.

 

Affordability versus amenities

Wherever a project is considered as premium, owing to its location, customers will have to make sacrifices on the amenities and facilities, However, at locations that are more affordable, customers have the opportunity to enjoy facilities and amenities, according to their desired lifestyle. Therefore, parameters like transport, support infrastructure, retail and entertainment, become prime considerations along with the project’s features, explain the experts.

 

How to choose the right location and project

While choosing a home, one should strike a balance, between the location and the projects’ features. Locations in the vicinity of office clusters are ideal. However, the property prices in such locations are likely to be sky-high. Hence, homebuyers can consider tier-2/tier-3 cities and other metros which offer properties with aspirational lifestyles and are also closer to the workplace.

Experts opine, affordability, in the first place, is a relative term. It varies across cities and from person to person.

The only thing that buyers need to prioritize is the ‘must haves’ and other non-negotiable factors, while they are searching for a property.

While affordability is no doubt a crucial factor, it is not wise to make it the sole consideration while buying a home.

 

Things you should not compromise on while buying a home

  • Never compromise on security, even if it makes the property affordable.
  • Similarly, do not ignore children’s needs, in a bid to find a property with a lower price.
  • Ensure that basic necessities like water, food and health services, are available.
  • Beware of unscrupulous builders, who may offer a good deal on a property.
  • Do not choose projects that offer a lower price, by compromising on the quality of construction.

 

Buying a new apartment: Some Vastu tips you can use

If you are about to buy a new home or an apartment, there are several Vastu aspects of the property that you must check. Here’s a quick guide

The Indian architectural science of Vastu Shastra, has been a basis for identifying and developing the best living spaces. Vastu-compliant plots and homes, help the inhabitants to live their lives with more happiness, wealth, health and prosperity. This ancient practice has gained popularity in the real estate space, for identifying the best places, plots and structures for residential, as well as commercial purposes.

Vastu compliant entrance

While evaluating the design plan or layout of a plot or a construction (flat or apartment), the first consideration should always be for a good entrance. The entrance holds the key to ushering in positivity and happiness for the entire family.

A south-west entrance is among the least Vastu-compliant entrances and families living in such homes, can face monetary and relationship issues to a great extent.

On the contrary, if you have an entrance in the north, you can expect great success in monetary and business matters, as well as opportunities in your career. If your chosen property or apartment does not have a Vastu-compliant entrance, you can still buy the property and apply certain simple Vastu remedies.

Vastu compliant room direction

The correct location for a room, ensures that you benefit the most from that room. Each room has a positive or negative effect, on the lives of inhabitants of the house, depending on the zone in which it is located.

For instance, a living room in the east zone, is ideal for developing and strengthening social connections. On the other hand, a bedroom between the east and south-east should be avoided as per Vastu. Sleeping in these zones, results in increased anxiety and disagreements with one’s spouse.

One should avoid building a toilet between the north and the north-east zones in the house. It can severely affect the immunity and health of the members of the family living in the house. For kitchens, the south-east is an ideal zone. One should avoid having a kitchen in the north-east and south-west zones.

Panchtattava or the analysis of the five elements

A living space is divided into 16 zones or directions in space. Each zone has a corresponding main element that affects different aspects of our life. For example, the north zone has water as the main element. The main attributes of this zone are wealth, growth, career, monetary gains, etc. Consequently, any imbalance in this zone, has a direct impact on the career, business and monetary health of the inhabitants.

Similarly, fire is the main element of the south zone. The main attributes of the south zone are sleep and relaxation.

While purchasing a home, one needs to check the location of different rooms and internal elements that make up the home. These include kitchen, toilets, balcony, slopes, open areas, water tanks, gardens, service lanes, water storage of neighbours, rain water drainage, the building’s height, shafts, etc. It is important to verify that each of the 5 elements or Panchtattava, is present in its respective zone – water in the north, air in the east, fire in the south, earth in the south-west and space in the west.

Modern Vastu and space programming

What if you have already purchased a property or paid the booking amount? In such cases, you can use the fourth check of Vastu – space programming. With modern Vastu applications and techniques, you do not need to deconstruct or demolish your property. Through simple and effective Vastu techniques and remedies, you can balance the elements in a particular zone. The use of colours, shapes, lights, metals and symbols, are highly effective in this regard.

 

 

Factors deciding eligibility for home Loan

Many factors determine the fate of a home loan application. Thus it will be better to assess your home loan eligibility prior to making a plan for purchasing a property

Credit score/report

The primary and common cause for the home loan application rejection is a poor credit score. The first step taken by lenders towards processing of any credit facility by lenders is to obtain your credit score and credit report from any credit information bureau, like CIBIL. Any default on your part in the repayment of your credit card bill or any other loan is reported by these credit information bureaus to the lender.

Credit Report

Any settlement with the lender with regards to any outstanding loan amount will negatively impact the credit score. Any waiver of accumulated interest by the lender on an outstanding amount to settle due amount will account for another negative aspect contributing to the rejection of a home loan eligibility. In such cases, the lender writes off such unrecovered amount in its books and reports the same. The nomenclature ‘write-off’ has a negative connotation and this may discourage the new lender from sanctioning your loan.

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Not all the cases, where the lender agrees to forego any amount due to it, are treated as write-offs, though. In cases of genuine mistakes on the part of the lender, the outstanding amount is waived and the lender is supposed to report such remissions as waivers and not as write-offs.

In case the lender has reported a waiver as a write-off, you need to ensure that the lender rectifies such errors. For example, this may happen if a credit card, with fees applicable on it, was sent to you even though you may not have applied for it. In such situations, the credit card issuing company has to forgo the amount, if the person to whom such a card is issued, refuses to pay. In most cases, the lender will report remissions of such small amounts as write-offs. Although the amounts involved may be small, the prospective lender may reject your home loan application.

Your age

Lenders generally do not grant home loans, to salaried individuals who have retired and to self-employed people who have completed 65 years of age, even if adequate security is provided, in the form of other immovable property. The reason for this is that the lender is interested in getting his home loan serviced each month and is not so interested in the value of the property that is mortgaged. So, unless you have a sufficient and regular flow of income, you will not be able to get a home loan.

Earning history

Lenders generally are not willing to give home loans to people who have not completed a certain minimum number of years in employment or in business. Lenders do so, to satisfy themselves about the consistency and quantum of the applicant’s income flow. However, a prior earning history is not a strict requirement. Lenders do consider the home loan application of professionally qualified persons favorably, even if they do not have much of an earning history. The same applies to people employed in permanent posts in government departments.

cibil-score

 

Union Budget 2017: proposals for Real estate and their impact

The Union Budget 2017 promises to continue economic reforms, control inflation and prudent fiscal management. However, it provides little impetus in the short term to the real estate sector other than a boost to the affordable housing segment.

 

The infrastructure status for affordable housing and tax relief for real estate developers are positive steps but not enough to boost residential sales in the short term.

The Union Budget 2017 promises to continue economic reforms, control inflation and prudent fiscal management. However, it provides little impetus in the short term to the real estate sector other than a boost to the affordable housing segment.

The infrastructure status for affordable housing and tax relief for real estate developers are positive steps but not enough to boost residential sales in the short term. The government has provided up to Rs 12,500 income tax benefit to individuals, which is insufficient to provide the demand side push to the sector, says a research report

Here are Budget proposals and their impact that are likely to influence the realty sector going ahead:

1) Infrastructure status to Affordable Housing – boost for affordable residential sector

Impact: Union Budget 2017-18 granted the much-demanded “Infrastructure” status to affordable housing. The step is well aligned with the government agenda of ‘Housing for All by 2022’. This will allow easier access to capital for developers, at a much lower rate with a longer amortization period. In addition, it allows developers access to viability gap funding and tax incentives. For affordable housing purpose instead of the built up area of 30 and 60 sqm, the carpet area of 30 and 60 sqm will be counted. The 30sqm limit will apply only in case of municipal limits of 4 metropolitan cities while for the rest of the country including the peripheral areas of metros, limit of 60 sqm will apply.

The government has also extended the time of completion of such projects from 3 years to 5 years. Buyers of affordable housing got a boost with the announcement of interest subvention of 4% and 3% on loans up to INR0.9 million (USD13, 318) and INR1.2 million (USD17, 758), respectively. The proposed deduction of the income tax rate to 5% for taxpayers having income less than INR0.5 million per annum (USD7, 400 million) will increase the disposable income of the common man which will, in turn, raise spending power and increase investment in the affordable segment.

Thus, more projects will now be eligible for profit-linked income tax exemptions. So far, we have seen limited participation from private developers in the affordable housing segment despite high demand. Profit-linked exemption along with the infrastructure status for affordable housing will push developers to undertake more affordable housing projects, thus increasing private player’s participation in the sector.

2) 10 million homes to be built by 2019 for the homeless and those living in kutcha houses

Impact: To stimulate the rural housing sector in India, INR230 billion (USD3.4 billion) has been allocated under the Gramin Pradhan Mantri Awas Yojana. In line with their aim to promote affordable housing not only in cities but also in rural areas, the government intends to complete 10 million homes by 2019.

Currently, the housing sector is active mostly in Tier-I and Tier-II cities in India; however, the scheme will not only provide necessary housing to the poor but also promote the residential sector in rural areas.

3) Tax breather for notional rent income on unsold unoccupied completed projects

Impact: At present, houses that are unoccupied after getting completion certificates are subject to tax on notional rental income. Builders for whom constructed buildings are stock-in-trade, the rule will be applicable only after one year of receiving the completion certificate. The law will provide some breathing time for developers to liquidate their inventory.

4) Holding period for immovable assets reduced from 3 years to 2 years and indexation to be shifted from 1.4.1981 to 1.4.2001

Impact: This is a significant step regarding capital gains taxation provisions on land as well as buildings. Reduction in the holding period and amendment in the base year indexation will considerably reduce capital gains tax providing tax relief for several asset holders.
It is likely to increase the government’s tax base through the immovable property and encourage the mobility of capital assets. With the proposed taxation provisions, property holders are more likely to engage in the sale of real estate, thereby giving a much-needed fillip to the sector.

5) National Housing Bank (NHB) will refinance individual housing loans of about INR200 billion (USD3 billion) in 2017-18

Impact: The demonetization drive towards the end of 2016 has resulted in surplus cash within the banks; thereby allowing major banks across the country to lower their lending rates.

The lending rate cut will be welcomed by not only new homebuyers but will also be a reason to rejoice for homebuyers who have already taken a flexible housing loan. However, the refinancing scheme from the NHB will improve the sentiment of current homeowners, especially those subjected to high lending rates in the past, opine experts.

6) Increase in investment in infrastructure and development projects

Impact: Following the announcement of several major infrastructure projects in 2016, the union budget disclosed one of the biggest budget allocations for the infrastructure sector. About INR1310 billion (USD19.4) billion) has been allocated for railways and INR64.9 billion (USD0.9 billion) for highways which include 2,000 kms. of coastal roads, facilitating better connectivity between major port cities such as Mumbai, Chennai, Kochi and other cities and small towns.

Similarly, select airports in Tier-II cities will see investment for operation and maintenance through the public-private partnership (PPP) model. The government plans to elevate the current state of infrastructure in India aiming to create a state of the art infrastructure network. Improved infrastructure is more likely to catch the attention of foreign investors and also aid and enhance investment in the real estate sector. The government is looking to upgrade airports in tier-II cities and proposed to monetize unused land assets. Another positive step is the decision to introduce a bill to resolve disputes in PPP projects, predict experts.

7) Capital gains tax liability changed for Joint Development Agreement (JDA) signed for development of property

Impact: If a Joint Development Agreement is signed for the development of the property, then the capital gains tax will only be paid in the year of completion of the project. Apart from several other measures to reduce capital gains tax, this step will provide tax relief not only to the landowner but also the builder/promoter, thereby decreasing their liability.

8) No cash transaction above INR0.3 million (USD4439) permitted

Impact: As one of the extensions to the demonetization drive, the government plans to disallow any cash transaction above INR0.3 million (USD4439). The real estate sector involved several cash transactions before the demonetization drive. However, buyers and developers had turned cautious post-demonetization with a notable reduction in the number of cash transactions.

Thus, this provision may only lead to a nominal impact on the sector in the short term, while it will lay down the foundation for a transparent economy and boost foreign investment.

9) Abolition of Foreign Investment Promotion Board (FIPB)

Impact: Over the last two years, the government has implemented several reforms to encourage Foreign Direct Investment (FDI) in India. As more than 90% of the total FDI inflows currently take place through an automatic route, the government has decided to do away with the FIPB in 2017-18.

This is in conjunction with the government’s view to further liberalize FDI norms and attract foreign investors. Under the automatic route for FDI, the foreign investors will not require any prior approval from the FIPB and will only be subject to laws defined for each sector.

10) Introduction of innovative land-pooling mechanism for development of the new state capital of Andhra Pradesh

Impact: The budget announced that the new state capital of Andhra Pradesh is being constructed by an innovative land-pooling mechanism without the use of the Land Acquisition Act. Land acquisition remained a much-debated issue and a major hurdle with respect to large-scale developments.

The new land pooling mechanism may significantly reduce land-related disputes and increase the speed of development. The exemption of capital gains tax will uplift the confidence of landowners whose land is being pooled for the creation of the capital city under the government scheme. However, the exemption is only limited to those who were the owners of such land as of June 2, 2014, the date on which the state of Andhra Pradesh was reorganized.

Conclusion

Overall, it was a positive budget for the sector and the government has done well to create awareness for the need to increase tax compliance. Demonetization was a temporary setback and the economy may bounce back. In particular, we look forward to the gains once Goods and Services Tax (GST) is rolled out later this year.

Budget-2017