Post AbeZaDlhJe4lhmX2RM by shrikant@noc.social
(DIR) More posts by shrikant@noc.social
(DIR) Post #AbdIwfLfYrOPEfVwKe by shrikant@noc.social
2023-11-09T14:36:31Z
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I really dislike this trend of looking at #realestate as another egg in your #investment basket.It has led to #corporates #buying a lot of inventory and #cartel-isation in the rent market.And there is (IMHO) an easy solution to it.Just restrict home-ownership to ONE #home per person. And make sure the Permanent Account Number (PAN) associated is Individual and not Business to prevent corporate investment.One owned home per member of family is WAY more than enough, don't you think?
(DIR) Post #AbdMlcqSvaA66RuTSK by nikhil@social.dezinezync.com
2023-11-09T15:19:19Z
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@shrikant the idea is fine, but needs more thought, I thought to myself. How would you implement this: retroactively or restricted to new registrations? Both will cause sudden inflation in values of properties, thereby furthering them from the reach of those would benefit from such a policy. A cursory thought, not a fully formed opinion.
(DIR) Post #AbdNnghxdXS4cITleS by shrikant@noc.social
2023-11-09T15:30:55Z
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@nikhil Making it only for new registrations would inflate values of pre-owned inventory.Making it retroactive would cause a lot of inventory to suddenly flood the market and cause a market crash/chaos.Do both but gradually, I guess? 🤔Give people 5-7 years to sell their second home(s). And, in this period, enforce the one-PAN-one-home rule, maybe?I am not an #economist so I dunno if this would work but this is my best guess... 🤷♂️
(DIR) Post #AbdOnrRFqBf5qpJMJs by jayesh@mastodon.social
2023-11-09T15:42:09Z
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@shrikant Not sure which market you are referring to but this is not A concern in Mumbai which is a large market. Corp ownership exists but it’s still a buyers market. Plenty of middle class buyers, loads of unsold inventory, interest rates being stable over the last two decades and the reduced stamp duty
(DIR) Post #AbdXOIXLMo5hx92qO0 by shrikant@noc.social
2023-11-09T17:18:22Z
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@jayesh The loads of unsold inventory hasn't stopped the prices of housing to keep going up YoY. If it were a buyer's market, the prices should have held steady-ish. Instead, the price graph seems to be consistently trending upwards.The rent in my city is rising by ~10% every year unfailingly. Sure, it may not be corporate ownership (yet) but it still falls in the same bracket as 'real-estate-as-investments'.Corp. investment is def starting to be a concern in US and Canada, from what I hear.
(DIR) Post #AbdgJ1K6q0XqhpPezI by jayesh@mastodon.social
2023-11-09T18:58:10Z
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@shrikant Still say it's buyers market. Mumbai for a lot of areas is holding steady. M ex that do that for a living and all indications that prices have been flat since 21. Rent, yes different beast.
(DIR) Post #Abe9C0yCeOEeFnB6Ku by nikhil@social.dezinezync.com
2023-11-10T00:21:55Z
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@shrikant the retroactive part is what I’m worried about. Most won’t give up their second homes voluntarily. And whoever does, will have to pay a hefty 24% capital gains tax on it, as reinvestment of these funds is now no longer possible. We presently have a limit of 2 per person, and this is enforced at the registration level. When the registrar verifies documentation, this is also checked.The common workaround for this is forming shell companies purchasing the units.
(DIR) Post #AbeZaDlhJe4lhmX2RM by shrikant@noc.social
2023-11-10T05:17:40Z
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@nikhil The limit of 2 per person is only for tax benefits i.e., you can claim 2 homes as 'residential' and keep them unoccupied without being taxed.But you can own as many homes as you can afford.It's just that the 3rd home onwards, you start getting taxed on rent, even when it is unoccupied. Circumvented using shell companies.IIRC LTCG is 10% while STCG is 20% - both on indexed price. Hence the 5-7 year grace, which could even be sweetened with a waiver of both, perhaps?
(DIR) Post #AbegjkBKs7PkWG0n56 by nikhil@social.dezinezync.com
2023-11-10T06:37:48Z
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@shrikant > 3rd home onwards, you start getting taxed on rent, even when it's unoccupied.This is a bit confusing to me:1. Rent is taxed, anyways? 2. what did you mean by “even when it's unoccupied"? If it's unoccupied i.e. no rent, what would get taxed? I’m thinking in terms of Income Tax, no property tax, which can be waived for rented properties (comes under the 2 properties max limit?)
(DIR) Post #AbeouwHJ2Oqwr0eaBc by shrikant@noc.social
2023-11-10T08:09:29Z
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@nikhil I'm not a tax expert but, from what I understand:You can own two homes and leave them unoccupied claiming 'residential' use, thus earning no rental income from either. Think home and vacation home, for example.If you purchase a third home but leave that one also unoccupied, you are taxed on prospective rent you could have earned by renting out the property.See this: https://www.livemint.com/money/ask-mint-money/i-have-3-house-properties-how-to-calculate-tax-on-income-from-them-11625978291341.html
(DIR) Post #AbepICPfDOLjYVecPg by nikhil@social.dezinezync.com
2023-11-10T06:39:53Z
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@shrikant LTCG and STCG are the other way around; and have indexation benefits, you're right about that. But it could still be a lot for older properties (especially those which are inherited), lower limit on that is April 2001. So if the policy says, indexation only applicable to rates up to the date of implementation of the policy (frozen there), it may entice a few, but not many.
(DIR) Post #AbepID7yYdnLlwO0Tw by shrikant@noc.social
2023-11-10T08:13:41Z
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@nikhil The important part IMHO is it will prevent competition for first-time home buyers.And, if everyone is able to get themselves a first home, the rental market will (hopefully) become more reasonable. The current rental home markets are already insane and a 10% YoY increase is making it even worse...
(DIR) Post #Abf194ag7zIs8fDlAm by nikhil@social.dezinezync.com
2023-11-10T10:26:28Z
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@shrikant was completely unaware of this aspect, thanks for sharing
(DIR) Post #Abf1RlMZq5gI0YXMbQ by nikhil@social.dezinezync.com
2023-11-10T10:29:52Z
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@shrikant I’m thinking the exact opposite would happen.It would just entirely crash both sale and rental markets for the short term. During the initial years, you suddenly have a lot of people selling properties at circle rates (already bonkers), thereby leading to a crunch for people who are presently renting. Those who were already looking for something to buy would be luck. Financiers would multiply their wealth overnight though, the only clear short term winners.
(DIR) Post #AbgRtIti3ikxnXmtf6 by nikhil@social.dezinezync.com
2023-11-11T03:00:49Z
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@shrikant something I just realised (proper shower thought moment): a lot of residential complexes (yes, whole buildings) are owned by companies, which are rented out to individuals, families, etc. (think hostel buildings in/around Kothrud, Karve Nagar) Those are still classified as residential buildings, not commercial. Makers of such a policy would have very hard time navigating this, without pissing off an entire class of society (who literally controls their vote bank)
(DIR) Post #AbgidlLsCJ8AdQ8VIe by shrikant@noc.social
2023-11-11T06:08:33Z
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@nikhil So, I looked up the bit about hostels - seems to be some ambiguity about residential v commercial.But that bit about companies owning whole buildings is one of the major motivations for the first post. Companies buying out entire buildings and complexes is a threat to individual home-ownership down the line.Taking a stand now will benefit the the vote bank but hurt the owners and companies. Which is why something like this is very unlikely to happen... 🤷♂️
(DIR) Post #AbgjnsLn8CehBtU4P2 by nikhil@social.dezinezync.com
2023-11-11T06:21:33Z
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@shrikant exactly my thought! Those who hold power wont give it up so easily and willingly, unless it benefits them in some other way.
(DIR) Post #AbrHqq4idx4Yf38b8i by shrikant@noc.social
2023-11-16T08:30:12Z
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Relevant to this topic: "In Victoria, former Airbnbs are flooding the market — but no one is buying." https://ricochet.media/en/4010/in-victoria-former-airbnbs-are-flooding-the-market-but-no-one-is-buying
(DIR) Post #Acae3WWeTSPtUy5uro by shrikant@noc.social
2023-12-08T05:41:01Z
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Developments on this topic - the #democrats want to ban corporate ownership of single-family homes.Unlikely to happen, but they'll earn brownie points from their voters, at least...https://www.nytimes.com/2023/12/06/realestate/wall-street-housing-market.html