Tag Archives: commercial properties

Commercial Property for Sale in Chennai

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Are you trying to find a commercial property in Chennai? Then you should read this blog! Commercial real estate property in Chennai is one of the most sought-after investments. There is a high demand for office and retail space due to the country’s development and growth in the IT and corporate sectors. 

Although the real estate market remained unaffected by the pandemic, demand for commercial real estate fell slightly in 2020 due to businesses closing their offices and switching to remote working arrangements. Despite a decline in the market, the Commercial real estate industry is on the right track to quick recovery as real estate investors resume their interest. 

Commercial spaces are gaining in demand as offices gradually open up, making them one of the safest and most secure investments. The time is correct to invest in commercial property in Chennai. You must consider several factors to locate the best commercial property for sale in Chennai. 

Learn more about finding the best commercial property in Chennai by reading on. 

The commercial real estate industry, predicted to contribute roughly 13% of India’s GDP by 2025, is essential to the country’s economy. One of the most developed metropolises in the nation, Chennai has a sizable commercial market. When it comes to investing in commercial real estate in Chennai, there are many options available. 

Finding and investing in the best commercial property in Chennai can be challenging. Commercial real estate involves high costs, so even if the investment is safe, it will still require careful planning on the part of the investor. 

How to find Chennai’s Best Commercial Property 

Location

Location is a crucial factor to consider when investing in commercial property in Chennai. When you invest in a premier commercial area, commercial real estate offers the best returns. Compared to investing in an already settled region, investing in a developing area offers higher returns because the former has more room for expansion. 

Select the Best Builder 

If you decide to purchase a commercial property in Chennai, make sure to pick one that was constructed by a reputable builder with extensive experience in the field. It is crucial to consider the builder’s reputation. The quality and returns will be better the higher the reputation. 

Financial Planning 

Purchasing commercial real estate for sale in Chennai will require a significant investment. You must, therefore, properly plan your finances. Check out if you would be better off taking out a loan or paying cash for a commercial property. If you are considering getting a loan, talk to loan experts before approaching banks that provide loans at reasonable interest rates. 

Be mindful of the relevant legal implications. 

Purchasing a commercial property in Chennai involves several legal considerations, such as insurance, planning permissions, safety and fire codes, licenses, and other accessibility. You must pay stamp duty because you are purchasing a commercial property in Chennai. These problems are fixable by talking about them with a lawyer who can help you navigate these legal nuances. 

Recognize the market 

Market research is one of the first steps you should take when looking for commercial property in Chennai. Even though the real estate market is generally stable during uncertain times, you must understand the market’s history. Observe market trends, assess the potential for future growth, and consider the property’s location and condition. With the help of this information, you can choose the ideal commercial property in Chennai. 

Think about your investment options. 

You can invest in a variety of commercial properties. Commercial real estate provides a wide range of options for you, including warehouses, offices, industrial, and other commercial spaces in addition to wholesale and retail stores. Based on the property’s location, intended use, and anticipated returns, choose the best commercial property in Chennai.  

GST on Commercial Property Rent

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Most companies consider paying the rent on their commercial property as one of their operating expenses. But did you know that the GST (Goods and Services Tax) is applicable to rent paid on commercial real estate in India? 

Rent on commercial property must certainly take GST into account. Under the GST system, commercial property rent constitutes a taxable supply of services. As a result, to avoid fines or other problems with the law, both the landlord and the tenant must be aware of the GST implications on commercial property rent. 

Let us investigate the various aspects of GST on commercial property rent in India, such as the applicable rates, threshold limits, input tax credits, and more. 

GST Effects on Commercial Property Rentals 

You can comply with the GST laws and regulations if you know how GST affects commercial property rent. By doing this, you can avoid getting in trouble with the law. 

As a landlord, you can receive an input tax credit (ITC) on the GST you paid for the supplies and labor used to maintain and repair your commercial property. Your overall tax obligation may drop as a result. 

Tenants must account for the GST on commercial property rent when planning their budget for expenses. It is your duty as a landlord to invoice and collect the GST from the tenant. Failing to do so can result in financial losses. 

GST Applicable to Commercial Property Rentals 

Today, renting commercial property has emerged as a new source of income or investment for people. These include establishments that generate cash by conducting business there, such as stores, offices, industrial buildings, showrooms, hotels, etc. The GST calculation for the rent is here. 

Standards for GST on Commercial Property Rent 

The exemption amount is Rs.20 lakh/annum (or Rs. 10 lakhs in some cases), and if a property owner earns more than this amount from renting out commercial property for any other business, they must register for GST. 

GST Rates for Commercial Rentals 

For commercial rental property, the GST rate is 18% of the monthly rent. Whether the landlord registered for GST or not, if the tenant is, they are responsible for paying it when the space is for commercial purposes. 

The rental rates for commercial properties are various. A GST of 12% with ITC and 5% without ITC applies to commercial real estate.  

Rent on Commercial Property Input Tax Credit

An individual may use the GST payment for his other taxable income. In other words, claiming an ITC for GST is simple if the requirements are satisfied. 

The tenant must use the rental property for commercial purposes and be a registered GST taxpayer to be eligible to claim ITC on commercial property rent. 

If the tenant claims ITC on the GST paid on the rent amount when submitting their GST returns, the ITC calculation occurs in this manner. The GST rate applicable to the rented property is the basis for determining the ITC amount. 

To be eligible for ITC, you must fulfill the following requirements: 

  • The tenant must possess current tax invoices or other records from the landlord. 
  • The invoice must make a specific note of the GST due for the rent. 
  • You must use the rent only for business purposes to claim the input tax credit. 
  • ITC limitations: There are a few limitations on claiming ITC for commercial property rent. 
  • You cannot claim ITC if you use the property for non-business purposes.
  • ITC can never be reclaimed if the tenant chooses the composition scheme or the property is GST-exempt. 
  • It is crucial to keep accurate records and documentation of rent invoices and related documents to back up ITC claims. 

GST Complaint Commercial Real Estate Rental 

Landlords in India who receive rent for the commercial property must adhere to GST registration requirements. Let’s see them below. 

Landlords must register for GST if their rental income comes from commercial properties and exceeds a certain threshold. GST registration thresholds cover 20 lakhs (or 10 million for certain category states). 

Regional Supply: Landlords leasing out commercial properties in several states must register for GST, regardless of their annual revenue.  

Even if the landlord’s rental income is below the threshold, they may choose to register for GST. As a result, they can claim an ITC for the costs associated with the property. 

Tax Invoicing and GSTIN: The landlord will receive a Goods and Services Tax Identification Number (GSTIN). They must send tax invoices to tenants that note the GST is payable on top of the rent amount. 

GST Returns 

Regular GST returns, such as GSTR-1, GSTR-3B, and annual returns (GSTR-9), must be filed by registered landlords. These returns include information about rental income, GST gathered, and ITC received. 

Remitting GST: Tenants must pay any applicable GST to landlords, who must send that money to the government within the allotted time frame. The property’s characteristics and the terms of the lease influence the rates of GST. 

Commercial Shops In Noida Extension

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Real estate investing is no longer a simple task. It is hard to decide where to invest. There are numerous commercial projects in India, but before investing in any venture, you must be cautious about your funding. First, you must determine what type of property you want to invest in or what property will fit your budget. There are a few good commercial assets where you can earn money. We always advise our clients to invest in retail shops in Noida if they have an investment budget but no experience in industrial property. However, if you have any experience in the business sector and a large budget, you should invest in the commercial property in Noida Extension. 

Commercial Shops in Noida Extension 

You can spend your money on Retail Shops in Noida Extension. Commercial Shops in Noida Extension have a lot of potential for good returns on Investment for a short period. One of the reasons is that the developers building a retail store here are very professional and well-known. They are using cutting-edge technology in construction, so the overall result is better. They hire internationally renowned architects for projects to develop new designs and ideas in India.  These international architects have worked on a variety of projects in developing countries, and as a result, they require full-size experience. 

Central Noida Retail Stores 

There are a few projects in Noida where you can buy retail shops for incredibly reasonable prices. Spectrum Metro is a good project where you could invest in retail stores in significant Noida. These stores stand in E. Sector 75 Noida, which is the center of Noida. The world 50 & 51 Noida, the oldest and most expensive part of Noida, opposes Spectrum Metro Noida. The USP of the project is the upcoming Max Health Center directly across from it because most people will buy their medications and food items from its strategically located store. 

Guidelines for Purchasing Commercial Stores in Noida Extension

People are choosing commercial shops in Noida Extension NCR because, as we all know, the area is experiencing significant residential and commercial development due to industrialization, commercialization, and high-connectivity infrastructure developments. Always look for commercial shops near Metro stations; doing so will increase investment returns in the long run. The foot traffic will increase due to the proximity of a metro station, which will eventually be to your advantage and that of your investments. 

The best options are great retail stores with spacious storefronts for retail space units with designated signage areas. Retail establishments with designated drop-off points give you the advantage in future profits. Another excellent investment is a store with kiosks and seating areas. If you are looking for commercial office space, there are designated, separate drop-off and entrance areas for offices if it is a mixed-use building with both office and retail space. 

The city’s thriving business district is conveniently close to a contemporary, upscale business complex. The proximity of a market, hospital, and metro station is also crucial. Always look at the real property from a real developer when searching for commercial property in Noida Extension. Real estate developers who are fake and pitiful are currently abundant on the market. As a result, always investigate the developer’s reputation. This advice will give you a long-term rental business and raise the bar for your smart scale. 

One of the areas with the fastest growth rates in the nation and Delhi NCR is the Noida Extension. This region has gone too far in terms of amenities, appreciation, connectivity, infrastructure growth, and final security.  

Commercial Property Loan Interest Rates in India Today

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A commercial property loan is a type of secured loan. Banks provide a credit option in exchange for the pledge of commercial property. It serves in the operation of a business. If the borrower wants to buy a commercial property, he can get a loan for up to 85% of the project cost at an attractive interest rate. Many Indian banks, financial institutions, and non-banking financial companies (NBFCs) offer it. 

Advantages of a Commercial Property Loan 

  • Tax Advantages: When purchasing a commercial property, an applicant should take advantage of several tax advantages. If he obtains a loan to buy a home, he may be eligible for a tax deduction for the interest paid on EMIs. 
  • Organizations such as IT companies, retail outlets, banks, and so on rent office space. Because these establishments are professionals, it is easier for commercial property owners to deal with the holders. 
  • Renting potential: If the borrower has unused space in their home, he may be able to generate income from it. 
  • Interest rate: The interest rate on a commercial property loan starts at 7.45% per annum. Because of the increased competition among financial institutions, or banks, it is the most affordable funding option. 
  • Loan up to 80%: The borrower can obtain commercial property loans ranging from Rs. 5 lakhs to Rs. 5 crores for a flexible repayment period of up to 15 years. 

Documents Required for a Commercial Property Loan 

For an individual 

  • Passport-sized photographs of all directors are required, as is proof of permanent address if rented. 
  • Copy of PAN Card and Passport as proof of identity. 
  • Address verification: Directors and Company.
  • GST return for one year. 
  • Check (payable to the bank) for the processing fee.
  • PAN Card for the company and all directors. 
  • Complete all property documentation using Map and Chain+ ATS. 
  • Schedule and sanction letter for the loan.
  • Bank statement from the previous year for salary account. 
  • ITR with income computation for the last three years from-16 (if filed)
  • Chartered accountant-certified list of all directors and shareholders as of date. 
  • Certificate of registration for VAT, SALE, SSI, and GST. 

Commercial Property Loan Eligibility Criteria 

Eligibility criteria for commercial property loans vary by several factors, including an applicant’s monthly salary, co-applicant income, and residency.

  • An individual’s age range is between 22 and 65 years old. 
  • The CIBIL score must be greater than 700. 
  • The financial statement should be in black. 
  • Indian nationality.

Factors Influencing Commercial Property Lending 

A variety of factors influence commercial property loans. 

  • Loan amount: Taking a large loan sum for a longer loan term makes it easier to repay the loan because the EMI lowers. 
  • Longer loan terms spread payments over a more period. If the borrower has enough income, he should choose a longer time to increase his chances of success. 
  • CIBIL Score: The CIBIL score is essential; an applicant must have a credit score of at least 750. 
  • The borrower’s age: An applicant has a crucial impact on him to pay back the debt. 

When looking for a commercial property loan, compare interest rates from banks and NBFCs to find the best loan rates. 

Commercial Property Loan Interest Rates 

Interest Rate 7.25% per year and up
Loan Amount From Rs. 5 lakhs to Rs. 5 crores 
Repayment tenure Up to 15 years 
Processing Charge 1% of the loan amount

How to save tax on property – For sellers

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When selling a property, sellers want to know how much tax they’ll pay and whether there is any way to reduce or avoid the tax. The article below focuses on capital gains tax for sellers who are selling a property.

A self-occupied house gives you two avenues of saving taxes which are the payment of interest and repayment of principal. You can get Rs 2 lakh deduction under section 24b of the Income-tax Act, 1961 on interest payment and Rs 1.5 lakh on principal repayment under section 80C.

What is a Capital asset?

Capital assets include land, buildings, jewelry, vehicles, trademarks, machinery, patents, and licenses. When a capital asset is sold and any profit is received, it is known as capital gains. Agricultural land is not a capital asset.


Capital gains tax on residential property for sellers:

To understand capital gains, let’s consider an example. Regarding residential property, there are two types of capital gains tax: long-term capital gain and short-term capital gain. We will now discuss these two taxes.

  1. LTCG (LONG-TERM CAPITAL GAINS)- If you hold a property for more than 24 months, you pay a flat rate of 20% tax on any capital gains. Exemptions are available in this.
  2. STCG (SHORT-TERM CAPITAL GAINS)- If you hold the property for less than 24 months, you will be charged short-term capital gains tax. The government taxes the individual at their slab rate of income tax. If you are in the 30% bracket, then STCG will be 30%. You do not receive any benefits for indexation (i.e., inflation). The amount for which you purchased the property and sold it, the difference will be taxed.

The following chart illustrates and differentiates between long-term capital gains and short-term capital gains.

CAPITAL GAINS ON RESIDENTIAL PROPERTY                STCG                         LTCG
TIMELess than 24 months(2 years)        More than 24 months (2 years)
TAX@Slab       Flat rate 20%
EXEMPTIONNo    Yes
INDEXATIONNo       Yes

Capital gain tax exemption:

Furthermore, we will discuss three ways in which you can save on long-term capital gains tax when selling residential property and other assets.

  1. SECTION 54- Under section 54, individuals and Hindu undivided families (HUF) can claim tax benefits on residential property they own. The minimum holding period is two years. It is important to note that only residential properties qualify for this section; commercial properties do not qualify. Next, the residential property must be a constructed property that you are selling. If you are selling the residential plot, then you will not get any benefit from it. If you invest the profits received from the proceeds in the purchase of 1 or 2 residential properties or the construction of another property, you will get a complete exemption from long-term capital gains tax.
    1. The capital gains from selling the property must be put in a new property which can be purchased within 1 year of the sale or within 2 years of the sale, in order to claim tax exemption. Similarly, if you are constructing a property, then for the forthcoming 3 years, if construction is completed, tax exemption will be available for you. Here, you only need to invest the number of capital gains i.e. profits; you do not have to invest the entire amount.
    2. FOR EXAMPLE: Twenty years ago you purchased a residential property for Rs 60 lakhs. And now sold it for Rs 90 lakhs. So 30 lakhs is a long-term capital gain (LTCG). Invest this 30 lakhs in 1 or 2 properties or some construction work; you don’t need to invest the entire 90 lakhs. The maximum capital gain which you can claim is up to Rs 2 crores. This exemption can be claimed once in a lifetime and will be reversed if you sell this new property within 3 years from its purchase date. If you invest this amount into bank fixed deposits or a savings account, this cannot be claimed as an income tax exemption. Banks offer a capital gains account scheme if you wish to claim the tax exemption.
  2. SECTION 54EC- Any individual can open a capital gains account. Any asset like; stocks, mutual funds, bonds, and house property may be used as collateral for this type of account. A 3-year holding period is required, with the ability to invest within 6 months. The maximum amount that can be supported is 50 lakhs, but all must be invested in specified bonds with a 5-year lock-in period. These bonds offer good returns on investment and are available only through this type of account.
  3. SECTION 54F- Now, finally, we come to Section 54F. In this section, any individual or Hindu Undivided Family (HUF) can claim tax exemption on capital assets other than a house property. Such assets include bonds, stocks, commercial property, and plots. The person taking the exemption shall not hold more than one house property. To acquire the asset’s value, you must buy residential property or construct it. This section does not cover any plots. The time limit for claiming tax exemption is 1 year back or 2 years forward if you purchase a property; construction is forward 3 years.

There are some other conditions under SECTION 54F and i.e.;

  1. The entire sale proceeds must be invested. Invest the entire 90 lakhs and not a partial amount or capital gains on which you can claim full exemption. You can only claim a partial exemption if part of the money is invested.
  2. If you sell this new property within three years of its purchase, the exemption will be reversed.
  3. If you want to claim the capital gains tax exemption, invest in a capital gains account. You cannot claim this exemption on a savings account.

Indian developers will present properties to NRI investors at Doha exhibition.

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Indian developers are all geared up to offer NRI investors a wide choice of properties across India at an exhibition which is going to start on 16th March 2012.

It is the 20th India Property Exhibition in Doha on Friday which will showcase more than 100 projects spread across New Delhi, the National Capital Region, Jaipur, Mumbai, Pune, Goa, Hyderabad and several other cities.

The $12 billion realty market in India is on a high growth curve, because of the fast growing economy, increased participation of global players in the Indian market and new technological innovations.

According to organisers – Indus Fairs and Events (India) and Apex Business Solutions, Doha – the investment portfolio includes apartments, independent houses, bungalows, luxury villas, farmhouses, commercial properties, beach resorts and plots.

HNIs Going For Commercial Properties

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Cornhill, Shanghai Commercial Bank
March 20, 2010

You need to give a second thought if you believe that commercial properties are purchased only by companies to aggrandize their business plans. Forthwith, money is put into commercial properties by High Net worth Individuals (HNIs) too.

In the past, the New Age Indians were just confined to investing in residential properties, but it does not goes for now-a-days. The trend is growing fast. According to the CMD of PropEquity, Samir Jasuja ,a large no. of HNIs will look ahead to buy commercial properties if banks do not show aversion to giving loans to individuals in order to invest in commercial properties. He added “the fact that banks do not show any positive response to sanction loans to individuals in order to purchase commercial properties is not a secret anymore. The status is same all over the world. That is why you cannot compel only our banks.”

The reason behind banks avoiding loans disbursal to individuals in investing in commercial properties is that the rate of default is very high in this segment as compared to residential properties. Thus, banks joyfully give loans for residential properties while they are not that interested when it comes to loans for the investment in commercial properties.

The director of Century 21 India, Anu Gupta suggested that HNIs should make investments in commercial properties as investing in them could prove to be highly beneficial as far as their return is concerned. The underlying reason would be that while they could go for bank loans up to 75-80 % for such purchases, the compensation of such loans could be set off against the rental incomes from such commercial properties. Therefore, as the retail/commercial industry grows, by investing a portion of the full price, an investor can gain a high-value asset, which will not only give maximum return (thanks to the set off provision in IT against rentals), but could see a significant appreciation over a period too.

Update yourself with recent realty trends

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Real estate is known as growing industry. That is why, change is the only constant thing or I must say that the change is the only predictable thing for this industry. We got the know the prediction that real estate will be on peak for residential properties and in the very next week we hear that investing in commercial properties are good for future. Such trend may create dilemma for the prospective buyers and investors.
The best way to update yourself with recent and upcoming trend is to keep your eyes on reliable websites. Information technology is playing very important role in providing information on time, which is needed before taking investment decision.