The Newly Elected Central Government’s Surgical Strikes On Black Money In The Real Estate Sector
The newly elected government is now in the mood for a Surgical strike even in the Real Estate Sector. The Real Estate sector which is already in a bearish mood since 2014 and has seen a fall of 20% to 35% since then is expected to slow down further if the new scheme is implemented although in the Long run , this move is expected to give a boost to the economy .
According to the top sources, the Central Government is planning to implement the Demat Account Scheme for buying and selling of Immovable Property(ies) including flats, shops and godowns. All the Immovable Property(ies) owned by a person or an entity will be recorded in the Demat Account just the way the shares are kept in a Dematerialised form and the Demat Account records the holdings of the person/entity across all the Companies . The shares of Listed and Public Limited Companies can be sold/purchased only when they are kept in Dematerialised form and in the same way , it is expected that sale/purchase of Immovable Property(ies) will be possible only when they are held in Dematerialised form and the said transaction(s) would be routed through proper Banking Channel.
A person who holds a Demat Account , his complete detail of shareholding across all the Company(ies) are reflected in the said account For example Mr. Amit holds 200 shares of Nestle India Limited , 250 shares of NIIT Limited and 50 shares of Hero Motocorp Limited and if he sells 50 shares of Nestle India Limited ,his Demat Account would reflect his revised shareholding in Nestle India Limited as 150 shares . In the same manner , the detail of all the Immovable Property(ies) held by a person would be reflected in his/her Demat Account. Just as in the example given above , Mr. Amit apart from owning a Residential property in Noida owns a land in Faridabad and a godown in Bhopal , all the detail of the Immovable property(ies ) held by him would be recorded in the Demat Account . If per chance , he owns an Immovable Property , the detail of which is not mentioned in the Demat Account, he would not be able to sell the same and the said property would be deemed illegal . It is expected that the new Regulation would also have the provision that if a person does not do any construction on a vacant piece of Land , then he would be subjected to some penal provision(s) .
Land may be a State subject but the Transfer of Property Act and the Indian Contract Act are the subject of the Central Government . The Central Government is taking a lead in creating a Dematerialised record of the Immovable property(ies) and this move is expected to earn revenues in the long run as clear land titles would boost economic growth but in the short run the possibility of a slowdown in the Real Estate cannot be ruled out as the newly elected government is considering to implement this law soon.