Tag Archives: Real Estate In India

In India, is a beach considered private property? How does possession vary from ownership?

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The complex issue of private beach ownership exists in India. Although there are some private coastal areas, it’s uncertain if beaches in India fall under the category of private property. State-by-state variations in beach ownership and public access laws give rise to discussions about the effects on the environment. In this article, Propertywala goes deeper into the subject and attempts to comprehend it.  

The ownership rights debate surrounding beaches has connections with historical precedents and current concerns, spanning from the pristine shores of Goa to the picturesque coasts of Kerala. In India, exclusive beach ownership raises questions about cultural heritage, public access, and environmental preservation. The interaction of social dynamics, legal disputes, and tourism-related effects illustrates the depth of the problem. 

Can a beach be private property in India? We will examine this topic and how difficult it is for the nation to balance development and preservation. 

What constitutes private property ownership?

In India, “private ownership of property” refers to the sole legal authority that a person, business, or other entity has over a plot of land, real estate, or other tangible assets. It gives the owner the right to keep, use, give away, and bar others from using the property.  

Within the parameters of Indian property laws, the owner gets to use the property as they see fit and to assume specific responsibilities. Ownership typically occurs through legal documents such as titles, deeds, or conveyances. However, what distinguishes possession from ownership? In this article’s next section, let us find out. 

The distinction between ownership and possession 

Possession and ownership are two different legal concepts in India. The act of physically controlling or occupying a piece of property is called possession. One does not necessarily own property when it is in their possession; tenants are individuals who look after property on behalf of owners. Ownership is a more expansive legal concept than possession, and it refers to actual physical control or occupation. 

The legal right to possess, use, and dispose of property, including real estate or land, in any way that’s allowed by law is, in essence, what ownership refers to. It includes the authority to manage the asset and reap its rewards. 

Let us see whether a beach in India can be considered private property in the next phase. 

Does India allow a beach to belong to someone else? 

While beaches are usually open to the public, some coastal states in India may identify some areas as “Private Access Beaches” to attract tourists. Many hotels and resorts have private beaches that are by local ordinances. Owners may limit access to be exclusive to guests, but under certain circumstances, some laws allow limited public use. 

The Supreme Court ruled in 2022 in a landmark decision that the public has the right to the unimpeded and undistributed enjoyment of natural resources like beaches, forests, rivers, and water bodies. It is thus feasible to say that while you can own a beach, you can also possess it. 

In conclusion, the debate over beach ownership in India is akin to balancing ownership flights with ecological necessities. India’s ability to navigate this complex situation highlights the need to strike a balance between regulations and ensure that the coastline develops sustainably. 

Do you invest in real estate? Check this out

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Over $5.8 billion in institutional investments were made in 53 deals in the real estate sector in 2023, a 14% increase from 2022. Demonstrating India’s resilience in the face of global economic headwinds. Investor confidence in the Indian growth story is expected to persist through 2024, according to JJL India report titled “Investing in Tomorrow: The Real Estate Journey of 2023.” 

With a 63% stake in the total investments in 2023, foreign institutional investors made up the most contributors. The Americans, historically the most to investments, saw a sharp decline to 23% of total investments from a peak of 43% in 2022. 

Nonetheless, domestic investors saw a sharp rise in market share, with 37% of all investments made, up from an average of 19% over the preceding five years. 

With 81% of all real estate investments made, equity remained the predominant type of investment. Non-core assets make up 53% of all transaction volumes. 

According to the report, the office sector will continue to be the most favored industry in 2024. 

With a 52% share of the investment pie, the office sector by a wide margin. Residential and warehousing came in second and third, respectively, at 13% and 16%. The amount of capital flowing into the office sector increased by 61% in 2023, from $1.8 billion in 2022 to $3 billion in 15 deals.  

Emerging industries to draw capital 

In the upcoming years, many institutional investments will go toward emerging industries like student housing, data centers, and warehousing. Institutional investors in India have been paying more attention to student housing as an asset class. There is a big chance for institutional investment in this space because of the rising number of students going to college and the rising need for high-quality housing. 

Institutional investments in India in 2023 appeared unaffected by inflation or unclear global economic trends. The trend of investments surpassing $5 billion has persisted since 2018. The US and Canada’s investment activity has decreased due to various rate increases in the Americas. Nonetheless, the APAC area made a sizable contribution in 2023. The outlook for the Indian economy is still favorable, and we anticipate this positive trend will last into CY 2024, according to Lata Pillai, senior managing director and head of capital markets at JLL India. 

Pillai continued, “The India growth story will continue to be robust, driven by its inherent strengths and continued focus on economic development, even though the upcoming elections may cause delays in decision-making.”

Platform Assertions 

Furthermore, $2.8 billion in platform commitments to invest over the following few years was made public in 2023. Platform commitments decreased significantly (by 38%) from 2022, the year with the most growth in platform deals—a 174% rise from 2021. 

The global economic slowdown has impacted investor sentiment toward long-term commitments despite increasing investments. With an investment capacity of more than $1.8 billion, Ivanhoe Cambridge and Mapletree struck the largest platform commitment deal in the history of technology-led offices in India last year.  

Exploiting public market opportunities with REITs. 

Real estate businesses and investors now have more ways to access public markets in India thanks to the introduction of REITs, which provide regulated investment structures and liquidity. 

The first retail Real Estate Investment Trust (REIT) in India, Nexu Select Trut REIT, was listed in 2023. Anchor investors responded favorably to the IPO, absorbing 45% of its total size. 

The last two REITs, Brookfield REIT and Nexus Select Trust REIT saw a rise in participation from domestic institutional investors, indicating a growing level of interest and confidence in the Indian REIT market. In 2023, Blackstone sold its 23.5% stake in Embassy Office Parks REIT for $850 million, or Rs 316 per unit, and left the REIT. 

Bain Capital, ICICI Prudential MF, and Capital Group were the top three purchasers, acquiring stakes ranging from 7 to 9%. The robust reaction from institutional investors suggests that this real estate investment tool is becoming increasingly popular and that real estate is beginning to institutionalize. 

2024

The nation’s growth trajectory has generally benefited from the government’s efforts to advance infrastructure development and bring structural reforms. Experts in the market believe that this growth will continue and that investors will continue to feel optimistic about India’s growth story. 

Shortly, the outlook for private equity investment in the Indian real estate market is anticipated to remain positive, having recently improved.  

However, it will be crucial to closely monitor the trends in capital flows going forward into 2024. The capital flow slowdown observed in the fourth quarter suggests the potential cautious approach investors, especially those with foreign experience, may take in 2024. 

Investors may become more risk-averse and careful when making real estate investments due to long-term uncertainty and monetary tightening in developed countries. The upcoming elections may cause delays in decision-making, but overall market sentiment remains positive. 

Four real estate markets in 2024 where you might want to invest

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By 2024, new highways, airports, and metro lines will significantly impact housing demand. Infrastructural developments will continue to dominate in 2024 and influence housing trends. The success of the residential and commercial real estate sectors will probably be determined by the construction of new metro connectors, motorways, and airports, whether they are currently operating or not. 

In the influence zones, the upcoming infrastructure renovation will boost residential activity. The capital value of the catchment areas along the project corridors will likely increase significantly, drawing in both investors and end users. 

According to Colliers India CEO Badal Yagnik, “peripheral areas will become integrated with central and suburban areas as infrastructure projects get completed throughout 2024, resulting in homogenization of activity across key residential pockets of respective cities.”

It is also probable that real estate developers will branch out into new areas. 

Organized residential real estate is well-positioned to enter the next phase of growth in markets such as Vadodara, Nashik, Lucknow, Jaipur, Chandigarh, Coimbatore, Mysore, Kochi, Indore, Bhubaneshwar, and Guwahati. It is due to unrealized potential and growing preference for comprehensive offerings in gated communities of tier 2 and 3 markets. 

The cities with more upside potential than Tier 1 cities will attract more and more investors seeking residential real estate. In addition to the outskirts of large towns, developers will likely add high-quality supply to these emerging markets, according to Yagnik.  

Homebuyers and investors should be aware of these markets. 

Gurgaon

Those looking to buy real estate in Gurgaon near the Dwarka Expressway might find it interesting. 

New sectors by the Dwarka Expressway in Gurgaon include 113, 112, 111, 110, 109, 108, 107, 106, 104, 103, 102, 99, 88B, 37D, 36A, and 36B. With an extension to the Dwarka Expressway close to Sectors 101-104, the metro line will eventually link the old and new Gurgaon by the Union Cabinet in 2023. 

Along this stretch, there are several upscale and mid-range housing complexes. Local brokers claim that property rates in the area vary from Rs 8000 to Rs 20,000 per square foot, depending on the project and location. Rentals in the area start at Rs 20,000 per month. 

The international real estate consulting company Savills India reported. Over the past five years, the average capital values of completed and under-construction properties have peaked, with 36% and 25% YoY growth recorded at the city level in Gurgaon, respectively. The average capital value of both completed and under-construction properties increased by 12% to 45% year over year.  

New Gurugram and Dwarka Expressway were the top-performing micro markets, with annual growth of 45% and 21% in average capital values of under-construction properties, respectively.  

Noida 

Sector 150, Greater Noida West, and a few residential areas along the Yamuna Expressway that are reasonably close to the future Noida International Airport are some of the most well-known markets in Noida. 

In 2024, prospective homeowners and investors also want to look at Greater Noida West or Noida Extension. 

In the area, the price range for a 2BHK unit is Rs 60 lakh to Rs 80 lakh, while a 3BHK unit can cost over a crore. Depending on the size and location, monthly rentals for two-bedroom housing units can cost anywhere from Rs 15,000 to Rs 20,000, while 3BHK apartments can cost anywhere from Rs 17,000 to Rs 25,000. According to local brokers with ties to the area, there will also be a few serviced apartment developments. 

Mumbai 

The Navi Mumbai Metro, which began service a few months ago, is located in several areas of Mumbai that prospective homeowners and investors might want to look into. 

The route passes through these micro markets, which include Taloja, Pendhar, Kharghar, and Belapur. Most of Taloja’s real estate costs between Rs 6000 and Rs 8000 per square foot on average, and it will continue to increase due to the metro connector. Local brokers state that the starting rent is approximately Rs 10000 per month.  

Ulwe, a posh neighborhood in Navi Mumbai, is another place to be on the lookout. Through this area runs the 22-kilometer Mumbai Trans Harbour Link (MTHL), which links Mumbai and Navi Mumbai. Because of this new infrastructure, capital rates have increased in this area to the point where two-bedroom apartments for more than Rs one crore. According to local brokers, rents can range from Rs 10,000 to Rs 20,000, contingent on the location and type of apartment building. The proposed Navi Mumbai International Airport will impact the property values in the Navi Mumbai area. The proposed Navi Mumbai International Airport will impact the property values in the Navi Mumbai area. 

In 2023, South Mumbai—known for its apartments and bungalows in Malabar Hill, Malabar Hill, and Walkeshwar—closed most of its high-end transactions. In 2024, the trend is going to continue. There are also several redevelopment initiatives in these areas. In addition to K Raheja Corp and Kalpataru, prominent players in the listed real estate market include Lodha and Godrej Properties. Most opulent residential apartments range from Rs 35,000 to Rs 1.50 lakh per square foot. Rents can start from Rs 1 lakh, depending on the property’s location.

The demand for rental properties has risen with the opening of metro lines 2A and seven between Dahisar and Andheri, particularly in the Western Suburbs micro market. According to a Savills India report, the student population traveling by metro to colleges in Andheri and Vile Parle locations created a significant demand for rental properties in Kandivali and Borivali. It led to an 8% YoY increase in rental values. 

Bengaluru

In Bengaluru, the Purple Line went fully operational in 2023. The segment between Whitefield and Kengeri, West Bengaluru, was completed and operational in October. 

Local brokers say properties along this corridor are an ideal investment option for personal use and rental income. 

They claimed that the prices have already increased by 20-30% in places like MG Road, Whitefield, Koramangala, and Indiranagar. 

The sources also suggest that the outskirts of KR Pura and Whitefield might be considered, given their increasing popularity in the wake of the metro’s opening. 

According to a report by Savills India, rental growth in premium residential developments in South and North Bengaluru is the highest, with 6-7% YoY growth. Average city rents increased by 5.8% YoY. 

Commercial Shops for Sale in Pune

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In recent years, Pune has steadily developed into a center for the IT industry. Numerous investors from around the world are interested in Pune’s properties. The city is now a lucrative substitute for Mumbai’s pricey market. In Pune, commercial property stands to rise by about 15%.

The demand for properties for sale in Pune has increased due to the IT, startup, manufacturing, and automobile industries. More industries also mean an increased workforce. As a result, there is a growing demand for residential properties in Pune and the need for office space leases to purchase. Are you thinking about making a commercial real estate investment? If so, Pune should be on your radar. Pune is quickly emerging as a top location for commercial property investments because of its advantageous location, flourishing business environment, and pleasant climate. We will look at the benefits of buying business shops in Pune here.

What are the top 5 arguments for purchasing a Commercial Shop in Pune? 

Development of Buildings 

With the building of highways and flyovers, Pune’s infrastructure has grown significantly in recent years, making transportation within the city much more convenient. The ongoing metro rail project will enhance connectivity. Due to this positive development, Pune is now a desirable place to invest in commercial real estate. 

The technology center for the region: 

Pune, known as the “Oxford of the East,” is quickly becoming a center for technology companies thanks to its numerous prestigious educational institutions. Major companies like IBM, TCS, Wipro, and Infosys have opened offices in Pune because of its appeal. There is now more demand for commercial properties in the city. 

Profitable business opportunities: 

Pune is a thriving center for many industries besides being a well-known hub for IT firms, including the automotive, manufacturing, and pharmaceutical sectors. Pune has become a desirable location for business investments thanks to its diversity of business climate.  Thanks to its diversity of business climate. Pune is a compelling location for businesses looking for expansion opportunities due to its large population and resulting expansive consumer market. 

Unusual weather: 

Pune has pleasant weather all year, making it an appealing choice for tourists and business travelers. The city experiences mild winters and summers, making it a change from the severe weather in other parts of the nation. Pune is a sought-after location for businesses looking to open offices and staff seeking quality of life because of the pleasant climate. 

Advantages of Commercial Shop in Pune 

The value of commercial properties rising: 

Due to the potential for property value to increase over time, purchasing a commercial shop in Pune may be a wise long-term investment. Commercial property will rise in value as Pune develops and grows as a city. Pune, which has seen significant growth in the commercial real estate sector, is one of the top ten emerging markets in the world, according to a report by JLL India. As a result, investing in a commercial shop in Pune can result in several long-term advantages. 

Rental and Lease Options

Purchasing a commercial shop in Pune also offers a variety of rent and lease options due to the city’s diverse business environment. A wide variety of businesses, from emerging startups to well-established multinational corporations, can be found in Pune, which has led to a high demand for commercial real estate. Due to this demand, property owners have a lucrative chance to rent out their commercial properties to tenants and create a steady income source. 

Potential for new companies 

There are many chances for new businesses to establish themselves in Pune because the city is a thriving business hub. Purchasing a commercial shop in Pune can give a company a physical location where to operate, increasing its sense of legitimacy and stability. Additionally, owning a commercial shop can be more affordable than renting or leasing a property for a business to establish a presence in a prime area. 

Consider your options when opening a business in Pune.

Business Facility 

Business centers are a highly sought-after option for those looking to buy a commercial shop in Pune. Usually multi-story structures, these centers offer an array of commercial spaces, including large and small retail spaces. Meeting rooms, conference facilities, and communal reception areas are typical amenities found in business centers. They provide the best option for companies looking for a ready-made option because everything, from the infrastructure to maintenance, is taken care of.  

Malls 

In Pune, buying a commercial shop in a mall is a common choice. Malls provide a range of commercial spaces, from little kiosks to big department stores. Malls also draw a lot of foot traffic, which makes them the perfect place for retail businesses. Due to their desirable location and further amenities, malls may be more expensive than other commercial options. 

Residence with retail space

Residential buildings with commercial spaces are a fantastic investment for people looking to open a shop in Pune. These multi-story structures typically have commercial spaces on the ground floor, making them ideal for eateries, gas stations, and grocery stores that cater to residents. Also, building residents may turn into clients; these buildings have a ready-made clientele. 

Latest Supreme Court Judgment on Land Acquisition 2022

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By examining the Ministry of Statistics and Planning’s September 2018 flash report, the top five states where cost overruns occurred as a result of postponed project completion have been identified. Maharashtra topped the list with a cost overrun of Rs 1.99 trillion, delaying the completion of 129 projects. It led to the introduction of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation, and Resettlement (Amendment) Bill, 2022. 

The amendment Bill is currently pending in the Rajya Sabha after being approved by the Lok Sabha on March 10, 2022. The amendment Bill has been released for all the major infrastructure development projects undertaken by the central and Maharashtra government, including the one in Mumbai, to speed up project completion and prevent further delays brought on by time-consuming procedures, procedural errors, and natural disasters. 

Bill 2022 amending land acquisition

The collector is granted special authority under Section 40 of the Act to purchase land urgently as required for the defense of India, national security, any emergencies brought on by natural disasters, or any other emergencies with the consent of Parliament, by the government’s directives. 

Two new sections, Sections 40A and 40B, are added to the amendment bill for the development of all infrastructure projects carried out in Mumbai by the Maharashtra government. 

Section 40A provisions 

  • Despite there being no such award, the collector will nonetheless purchase this land. 
  • According to Section 21 of the aforementioned Act, the collector may take possession of the aforementioned land based on the counsel of the Single Window No Objection Certificate Approval Committee after 30 days have passed since the notice was published. The government will then have complete ownership of the land, free from any liens. 
  • The government shall not take possession of such property without first giving notice to the occupier of its intention to take possession for at least 30 days and not more than 45 days. 
  • The collector will offer to pay compensation for the land before taking possession, and if payment is put off, the person who is entitled must still get an extra 2% of compensation each month. 

Section 40B provisions 

  • The government must issue a notice for publication in the official gazette before appointing the Single Window No Objection Certificate Approval Committee in Mumbai’s Metropolitan City. Section 40B (2) of the amendment bill contains a list of the committee members.     
  • After the government requests and submits the pertinent documents, the committee must submit its recommendations within 30 days. The committee should, however, report to the parties involved in the extension the considerations that the committee must consider when recommending a No Objection Certificate under sub-Section 5 of Section 40B (6) of the Amendment Bill. 

 Effects of the Change

The amendment speeds up the Act’s current multi-stage and drawn-out process of land acquisition and infrastructure development. They will benefit from the amendment in the following days:

  • It will assist the government in acquiring land more quickly while preserving the rights of the displaced people and landowners from whom the government will be purchasing the land. 
  • The modification also creates a new committee that separates the various authorities and departments currently involved in the procedure from one another. Establishing a single committee with equal representation that has the power to grant or revoke government approvals could eliminate bias, hold local communities and the environment’s interests, and ensure a transparent process. 
  • Ensuring the fairness of the land acquisition procedure and offering just compensation to the affected parties and landowners. It could foster the smooth start and completion of the necessary and emergency projects in the state. 

It is essential to implement such changes to help streamline the land acquisition process and time-bound project completion, which will result in lower capital costs because of timely acquisitions. It will help the government meet its goals. The committee’s recommendations and the policy and acquisition procedure, ensure transparency and lowers the likelihood of land-related lawsuits. 

Capital Gain Tax on Land Sale

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What is Capital Gain?

A capital gain is simply the profit or loss from the sale of a capital asset. You will have long-term capital and short-term capital gain if you sell a Short term capital asset. If the sale results in a loss, you will incur a capital loss. The Capital Gain will be taxable in the year when the capital assets become available. 

Capital Gains Tax on the Sale of Real Estate 

Capital gains can be of two types, depending on how long the capital asset remains in use. 

  • Long-Term Capital Gain (LTGG) or Long-Term Capital Loss (LTCL): If a taxpayer sells an immovable property or land held for more than 24 months, the gain or loss on such sales is a Long Term Capital Gain (LTCG) or Long Term Capital Loss (LTCL). 
  • Short-Term Capital Gain (STCG): A Short-Term Capital GAIN (STCG) or Short-Term Capital Loss (STCL) is a gain or loss on the sale of immovable property or land held for up to 24 months by the taxpayer. 

According to the Income Tax Act, movable property or land is a capital asset. When a taxpayer sells an immovable property or land, the income or loss is reported as Capital Gains in the Income Tax Return and taxed at the applicable rate. The nature of the capital gain determines the capital gain tax on the sale of property or land, whether long-term or short-term. While the STCG on the sale of immovable property is taxable at slab rates, the LTCG is taxable at 20% with indexation benefit under Section 112 of the Income Tax Act. 

Income Tax on the Sale of Land Sale 

The tax treatment of immovable property, such as land, buildings, or houses, is similar to that of other capital assets. 

Calculation of Long-Term Gain Tax on Property Sales in India 

LTCG on the sale of immovable property in India is taxable at 20% with an indexation benefit, according to Section 112 of the Income Tax Act. To take advantage of the indexation benefit, the taxpayer can compute the long-term capital gain by calculating the indexed cost of the acquisition using the Cost Inflation Index (CII). The taxpayer’s cost of improvement is the expense incurred for adding or improving the capital asset. Using CII, the taxpayer can also calculate the Indexed Cost of Improvement. 

Particulars Amount 
Sales Consideration 
LessTransfer Expenses 
LessIndexed Cost of Acquisition 
LessIndexed Cost of Improvement 
LessExemption u/s 54 to 54 GB
Long-Term Capital Gain
  • Sale Consideration = In the case of immovable property, the sale consideration should be the offer value of the capital asset or the value adopted by the stamp duty valuation authority to Section 50C of the Income Tax Act.  
  • Transfer expenses are expenses incurred solely to sell a capital asset. 
  • Cost of Acquisition = (CII of the year of Sale/ CII of the year of Purchase) = Indexed Cost of Acquisition  
  • Cost of Improvement = (CII of the year of Sale/ CII of the year of Improvement) = Indexed Cost of Improvement
  • Capital Gain Exemption = Taxpayers who meet the specified conditions can claim a capital exemption under Sections 54 to 54GB. 

Calculation of Short-Term Capital Gain tax on the sale of Property in India

The short-term capital gain on the sale of real estate is taxable at the slab rates. There is no indexation benefit in the case of a Short capital gain. 

Capital gain exemptions, also through Sections 54 to 54 GB, aren’t enough. As a result, the Capital Gain calculation of the acquisition, improvement, and transfer costs 

Real estate recovery story being scripted by investors

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The real estate recovery story is being driven by the residential segment, but contrary to the claims made by a number of developers that end-users are their main buyers, the current trend is being driven by investors.

Investors are back in good numbers and before the curve goes up, they want to buy. Some who have bought are already hoping to book profits during this Diwali. This could be a precursor to further improvement in investor sentiments, since investors would take this as a sign to look towards a sustainable run in the future.

Investors moved away from the residential real estate market when the market crashed last year and many have not been came back. The last few months though have seen a number of affordable launches at price points, which have stimulated the market. Most developers have launched mid-income housing in the Rs 20-40 lakh range, which has created a movement.

Reason behind New Delhi’s real estate hike

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New Delhi has been considered the business of real estate in India. With the growing number of students, tourists and bureaucrats, the real state of Delhi has become an area offered in India. Apartments, houses, land, agricultural and industrial lands, industrial and residential plots, are the main segments in which the real estate industry in New Delhi is thriving. Real estate prices in the city depend on a number of factors, including the location, accessibility, etc. Tourists look out for accommodation that is close to historic monuments and, secondly, the employers look out for residential properties that are easily accessible from the airport, train station, etc. Real estate demand in Delhi has increased more than ever. It has become the preferred place for foreign direct investment and many multinationals have established their headquarters at the site and adjacent areas. The search for a real estate agent recognized as offering real estate in New Delhi, according to your budget and needs. Beyond this, there are some other important factors such as strong economic growth, the recovery of financial markets and investor friendly policies of the government will also increase the demand for real estate in the city.