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As years pass by, the real estate laws continue to hold a position in India’s economy. But, through the years, the government has come up with regulatory reforms that are streamlining the domain. People are glad to observe a high level of transparency and economic growth. With time, it also seems our nation’s growth will cross $1 million in market value by 2030. This prediction complements the role of the real estate domain. The sector will definitely boost the economic vitality of our nation. Now, let’s check out more about the regulatory changes in real estate.
Many legislative developments are impacting the real estate sector in India. These changes have been introduced to improve transparency, affordability, and sustainability. Beyond this, the changes in the various Acts are addressing challenges like inefficiencies and corruption. Let’s now check how the changes are influencing the Indian real estate sector.
Real Estate (Regulation and Development) Act (RERA)
While RERA is presented to secure the interests of homebuyers, it has now enhanced transparency in property transactions. Currently, real estate developers have to register the projects under RERA before promoting or selling them. The developers will also be held accountable if they fail to deliver projects on time. This will ensure better customer protection and reduce the instances of delayed possession. The clauses of the Act also state that the property must not have any structural defects for 5 years after possession. In case the defects are observed, then the developer has to address the structural issues.
Goods and Services Tax (GST)
Among the regulatory changes in real estate, GST has unified the taxation process. This means that the developers have to face a uniform tax rate with regard to goods and services. But, as a low GST rate is imposed in affordable housing, the prices of properties are reduced. This has in turn led to significant growth in the segment. Moreover, buyers are perceiving enhanced transparency with the introduction of GST and RERA. Real estate investments have also been streamlined due to RERA and GST.
Affordable Housing Initiatives
For the promotion of affordable housing, the Indian government has now launched several incentive schemes. These have been launched in addition to the housing market regulations. The schousing needs. The Pradhan Mantri Awas Yojana (PMAY) has also includedhemes are thereby encouraging the construction of affordable housing. Thus, real estate developers are in a better position to address the subsidies for homebuyers in the form of interest rate reductions. This will be applicable when individuals take a home loan. Eventually, the initiatives have a positive impact on the nation’s economic growth.
Benami Transactions Act
The Benami Transactions (Prohibition) Act, 1988, is also impacting real estate practices. While the Act is presented, it curbs illegal property deals in India. The Act further prohibits benami transactions, which involve concealing the identity of the actual owner. Additionally, people are not allowed to hide the source of money used in the transaction. In case the government comes across an individual indulging in benami transactions, then he will face severe penalties. The officials will also confiscate the property and send the individual to prison. Hence, sellers and buyers have now become cautious due to the threat of penalties. Before dealing with anyone, they are ensuring that the property titles are legitimate. The titles must also be free from risks related to benami. This has eventually enhanced transparency in the domain.
Digitization and E-Governance
With the advent of e-governance and digitization, individuals have now observed less occurrences of property disputes. Fraudulent property transactions have also been reduced due to digitalization. While the government came up with the National Land Records Modernization Programme (NLRMP), it has now brought the land administration system into the digital age. The accessibility to such a system has also increased for developers and investors alike. Besides, property titles can be verified through digitization. Once the legitimacy of land records is checked, property disputes can be avoided. Subsequently, the regulatory changes in real estate have now reduced fraud and made the transaction process smooth.
FEMA and Foreign Investment
In the present era, the Indian government has liberalized policies to attract Foreign Direct Investment. These policies are followed in the commercial and residential segments. As per the regulations under the Foreign Exchange Management Act (FEMA), people who are not living in India can buy property. But, while making an investment, they have to follow some conditions. The investment also has to be made in a development project. The reforms in the FDI policy have further eased the restrictions on the repatriation of funds. Global investors can now find it easy to run a business in the nation. Ultimately, the reforms have led to substantial growth of the sector.
In addition to the above regulatory changes in real estate, the Indian Green Building Council (IGBC) and the Bureau of Energy Efficiency (BEE) have set guidelines for energy-efficient buildings. Developers are now adopting eco-friendly building techniques. The focus on sustainability has also increased because developers have to obtain clearances for large-scale projects. This is because the projects can affect the environment post commencement.
Finally, it seems evident that the regulatory changes in real estate are driving a more transparent real estate market. RERA, GST, and affordable housing initiatives have created a favorable environment for home sellers, buyers, and developers. The real estate sector is soon evolving into an investor-friendly one with the ongoing reforms. While some issues across the country are yet to be addressed, the future seems bright with growth opportunities.
If you are still busy searching for a house of your dreams, then consider connecting with Goodbrick Realty. As our team fulfills your dream, you and your family can savor a life of luxury.
