Talks are doing rounds that Real estate assets of an individual would have to be legally digitized very soon. While at this stage, these may seem to be just a case of a rife rumor, it is becoming more and more evident that it is a pre-requisite to providing affordable housing in the country. Urban development minister Venkaiah Naidu on 6th March, 2016 also hinted on a need of such a digitization overhaul.
Once the real estate property assets are digitized, following advantages can be realized in short term:
1) Once digitized, it is likely to bring Benami transactions to a halt as all properties will be scrutinized against income that an individual earns and has declared.
2) This is likely to bring back unaccounted land back to government kitty (expected to be around 15-20% of property market as per a survey by KPMG). This would mean that these properties would be brought back to the supply cycle.
3) This is likely to make the recovery of property tax more feasible.
4) After this, Government can on a pro-rata basis, reduce house loan tax exemptions for individuals holding properties more than a certain figure. Thereby, bringing a tab on number of real estate assets per individual.
This exercise when implemented is likely to keep true investors away from real estate investments as resale transactions will see a significant decline. Introducing and implementing this however, is not going to be easy. There is a lot of traction within political world and implementation would have to be practically done by each state as land is a subject matter of states.
We feel that the need for this digitization is ever evolving. Although this may not happen immediately, this looks like a Work in Progress idea and by the end of this decade, it could end up being realized.
Last Updated on March 7, 2017 by Go4Reviews