Realty firms may gain from UP govt’s and buy norms
Business Standard, February 09, 2009, Page 5
SIDDHARTH KALHANS & NEERAJ THAKUR
Lucknow/New Delhi, 8 February
The country’s fund-starved real estate developers are likely to benefit from a recent move by the Uttar Pradesh government to relax norms on payment period for land acquisitions, experts say.
The Mayawati-led Uttar Pradesh government had said it is planning to come out with a relief package for acquisition of land to develop integrated townships, and metro cities in the state. The government plans to extend the payment period for acquisition of the land to 10 years as against the prescribed norm of five-seven years.
The relaxation, if approved by the cabinet, will give a breather to cash-strapped developers who are in negotiations with banks and mutual funds to defer repayments and restructure loans. Several of them have also deferred projects following a slump in demand. Land accounts for more than 50 per of the cost of a project.
“By extending the installment duration, the government will be able to ensure completion of the project,” said, Sanjay Verma, executive MD, South Asia, Cushman and Wakefield, a real estate services firm.
The Uttar Pradesh government also plans to waive the nominal penal interest (about 2 per cent) for delayed installments on land. Also, in case a developer is not able to pay the instalment, the government will avoid cancelling the land deal. “Allottees to have defaulted on payment of 95 per cent of the total cost of the land will be affected,” says the proposed policy document.
Apart from the relaxations, the UP government has also extended the 50 per cent waiver on stamp duty and registration of properties by another six months, or till September 30, 2009 to ease the hardship. The earlier exemption was to expire on March 31, 2009. The developers availing themselves of the facilities of the relief package will have to submit their revised applications by June 30.
Earlier, the Uttar Pradesh government had granted permission to 10 companies for construction of hi-tech townships in seven cities.
Business Standard, February 09, 2009, Page 5
SIDDHARTH KALHANS & NEERAJ THAKUR
Lucknow/New Delhi, 8 February
The country’s fund-starved real estate developers are likely to benefit from a recent move by the Uttar Pradesh government to relax norms on payment period for land acquisitions, experts say.
The Mayawati-led Uttar Pradesh government had said it is planning to come out with a relief package for acquisition of land to develop integrated townships, and metro cities in the state. The government plans to extend the payment period for acquisition of the land to 10 years as against the prescribed norm of five-seven years.
The relaxation, if approved by the cabinet, will give a breather to cash-strapped developers who are in negotiations with banks and mutual funds to defer repayments and restructure loans. Several of them have also deferred projects following a slump in demand. Land accounts for more than 50 per of the cost of a project.
“By extending the installment duration, the government will be able to ensure completion of the project,” said, Sanjay Verma, executive MD, South Asia, Cushman and Wakefield, a real estate services firm.
The Uttar Pradesh government also plans to waive the nominal penal interest (about 2 per cent) for delayed installments on land. Also, in case a developer is not able to pay the instalment, the government will avoid cancelling the land deal. “Allottees to have defaulted on payment of 95 per cent of the total cost of the land will be affected,” says the proposed policy document.
Apart from the relaxations, the UP government has also extended the 50 per cent waiver on stamp duty and registration of properties by another six months, or till September 30, 2009 to ease the hardship. The earlier exemption was to expire on March 31, 2009. The developers availing themselves of the facilities of the relief package will have to submit their revised applications by June 30.
Earlier, the Uttar Pradesh government had granted permission to 10 companies for construction of hi-tech townships in seven cities.
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