Helping You Build Wealth With Honest Research
Since 1996. Read On...

MEMBER'S LOGIN

MEMBER'S LOGINX

     
Invalid Username / Password
   
     
   
     
 
Invalid Captcha
   
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Revealed
India's Third Giant Leap

This Could be One of the Biggest Opportunities for Investors




Important: We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
By submitting your email address, you also sign up for Profit Hunter, a daily newsletter from Equitymaster
covering exciting investing ideas and opportunities in India.

AD

Urban property prices to pinch next?
Wed, 11 Apr Pre-Open

Food, clothing and shelter are the basic needs for a human being. Blame the inflation pinch, an average Indian seems to be losing affordability of all the three. If you thought the budget was a little harsh due to increase in excise and service tax, this might just be the beginning. To achieve the set growth targets, we need infrastructure and funds and the government and associated ministries seem to be trying every possible option to serve that purpose. As per a latest development, property taxes could see a jump.

The proposal from the urban development ministry to increase taxes aims to finance urban infrastructure which is estimated to need funds worth Rs 400 - 500 bn over the next 20 years. However, the blow has been blunted as the taxes will be applicable to properties given for rent rather than self-occupied units. Nonetheless, in this era of mass urbanization, it will be the common man bearing the brunt.

Infact, in Mumbai, which bears the reputation of country's most expensive property markets, the risk of taxes shooting up is very palpable. Post the 5% stamp duty, a hike in building input costs and service tax hike on property transactions imposed in the recent budget, there is a buzz of using market price as a base to calculate property tax (currently based on rent). What makes it worse is that it is expected to be introduced with retrospective effect from April 2010. No wonder the property transactions have declined by 14% in the first quarter in Greater Mumbai. But what is surprising is that this is not being reflected in home prices that are only going up. The reasons are not too hard to guess. It is the uneven distribution of wealth in the country. While a common man is almost denied this basic necessity, speculators seem to be hoarding the properties disturbing the demand supply dynamics leading to spiraling prices.

While we can't deny the need of the government to arrange funds to support its infrastructure growth targets, it is high time it comes up with innovative ways to spare the common class and avoid hoarding and speculating tendencies. One such way could be to introduce a vacant land tax to avoid property hoarding. However, such steps will lose their impact if not implemented on time. Hope the government is listening.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

View all commentaries | Archives

Read the latest Market Commentary


Equitymaster requests your view! Post a comment on "Urban property prices to pinch next?". Click here!

  
ABOUT EQUITYMASTER

Since 1996, Equitymaster has been the source for honest and credible opinions on investing in India. With solid research and in-depth analysis Equitymaster is dedicated towards making its readers- smarter, more confident and richer every day. Here's why hundreds of thousands of readers spread across more than 70 countries Trust Equitymaster.

PREMIUM PRODUCTS
QUICK LINKS
POPULAR TOPICS
TRENDING TOPICS
FREE NEWSLETTERS
EQUITYMASTER SUPPORTS
  • HelpYourNGO
  • You Tube
  • Linkedin
  • Twitter
  • Telegram
  • Google Play

Copyright © Equitymaster Research Private Limited (formerly Equitymaster Agora Research Private Limited).

Whitelist | Refer | Terms | Privacy | Contact | About | Sitemap

Phone +91-9136015013

Equitymaster Research Private Limited (formerly Equitymaster Agora Research Private Limited) (Research Analyst)
SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Email: info@equitymaster.com. Website: www.equitymaster.com.
CIN:U74999MH2007PTC175407

Name of the Compliance & Grievance Officer: Ms Sonal Ramachandran
Telephone: +91-22-61434003 | Email: compliance@equitymaster.com

LEGAL DISCLAIMER:
Investment in securities market are subject to market risks. Read all the related documents carefully before investing.
Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

All rights reserved. Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

Equitymaster Research Private Limited (formerly Equitymaster Agora Research Private Limited) (Research Analyst) bearing Registration No. INH000000537 (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA, Canada or the European Union countries, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.