What ailed the Real Estate sector in India since long including issues of black money, less transparency, unfriendly investment options and volatile sentiments regarding investment and returns has now changed for the positive.
With policy changes and regulation of already existing initiatives, the real estate industry has seen a significant turnaround. Combined with the demonetisation of currency notes of Rs 500 and Rs 1,000 in November 2016 to curb black money, introduction of Goods and Services Tax in July 2017 to account each and every transaction and the amendment of the Benami Property Act to dent the ambitions of black money hoarders, the introduction of the much anticipated The Real Estate (Regulation and Development) Act, 2016, (RERA) has led to greater transparency in the industry. With it, experts suggest that the investment by Non-Resident Indians or NRIs in the real estate industry in India is set to soar in 2018.
Generally, the perception is that the real estate industry which is one of the major sectors in the country thrives on funds and finances from the local population. While a large part of the statement might be true, the finances are also received from Indians living in other countries. These NRI investments have a bearing on the sector which is one of the fastest growing sectors in the country. Also, as a growing segment, NRIs have shown a sharp inclination towards their home country and maintaining a property in the home country has a sentimental value attached to it while also acting as an investment for the future.
In the above mentioned scenario, the RERA has ensured that the projects are completed on time and the details are available online which has led to a significant rise in the confidence of NRI investors who can monitor the developments at their convenience. NRIs can keep a tab on the usage of the land and can get access to the land status through RERA. They can also gather more information from developers, assess track records and maintain a close relationship with the developers to understand the nitty-gritties of the desired property.
For an under-construction property, while a NRI has to pay a GST of 12 per cent, there is no GST for fully- developed properties or those which are ready to be moved into. This has helped the sector to bring in more transparency in transactions and to usher in incentives for builders in valuation of deals. The GST provides a definitive structure to pricing in the sector while ensuring that developers receive input credits unlike previously when they paid service tax.
The property prices for residential projects are in the lower bracket and developers are offering incentives and other freebies in order to persuade homebuyers. All these factors put together make it an opportune time for NRIs to invest in India.
Only caveat is that NRIs should familiarise themselves RERA considering the reach and impact it has and can have in the coming years. It is also necessary to note that RERA has been significantly worked around in each of the states of the country and can correspondingly be different in terms of the place that the NRI chooses to buy.
Participating in workshops organised by leading real estate developers is one of the ways to familiarise oneself with the rules and regulations of investing as an NRI in the country.