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Impact of GST on Real Estate Sector

Image which represents The Impact of Real Estate Industry and GST.

Know How GST Has Made Changes In The Real Estate Sector 

GST is the Goods, and Service Tax levied for most of the businesses of India. It is a kind of service tax. 

The GST rates have been changed recently, and it is up to the real estate developer to choose the old GST rate or new GST rate. The early GST rate had the benefit of the input tax credit, which does not apply to the old GST rate. Anyhow the real estate buyers would not face difficulties with the current GST rates. In this article, we would talk about GST and its effect on the real estate business. 

GST And Real Estate

Image of A Hand Holding The Real Estate Buildings Which Describes The Concept of GST on Real Estate Sector. 

In the past, the GST with the input tax credit benefit was 12 percent for real estate properties. It was 8% for affordable housing. After the revision in the GST tax rates by the Central Government, the GST rates were reduced to about 5% for real estate and 1% for affordable housing. , and this made the real estate developers unhappy. Thus Government offered a choice for the real estate developers to choose either the old GST rate or new GST rate. Read More about the GST on Real estate.

The recent changes made in GST rates would be beneficial to people for whom the input stock is accumulated. The construction projects that have been started before April 1st, 2019 can choose any of the tax rates. But the construction projects that commenced after April 1st, 2019 must follow only the new GST rate. Real estate experts had expected this recent change on the GST rates announced by the central government. The recent change in the GST rates does not affect the prices of homes. The real estate developers cannot increase real estate rates. 

New GST Rates

Recently the GST council met and came up with a transition plan for implementing the new GST rates. This new GST rates announced would be applicable from April 1st, 2019.  Thus it is up to the real estate developer or homeowners constructing building before April 1st, 2019 to choose either the old GST rate or the new GST rate. According to the new standards mentioned, GST would be levied for 5% for real estate properties and 1% for affordable housing properties. A residential house or plot comprising of 90 sqm is called as an affordable housing property. The GST council has also decided that the procurement of materials for construction purposes must be from only registered dealers. The commercial spaces are considered as residential for 15% for calculating the GST. It is, of course, difficult for tier 2 and other smaller cities to meet the 80% procurement criteria from registered dealers. 

It would take some time to know if the new GST rates can create a significant impact on the real estate sector, which is currently facing various challenges. The GST council has decided to make use of the input tax credit on a proportionate basis. There would be a clear segregating of projects that are under construction and new projects so that builders would benefit from the input tax credit. 

Image That Represents the Estimation of GST on buyers payout by 6 per cent - 7 per cent on the overall purchase.

GST Impact

GST would create a significant impact on the real estate sector. Thus it would influence the buyers, real estate developers, and stakeholders. GST would be levied only for houses or building that are under construction. Thus completed real estate projects are not bound to GST reforms. Therefore there would be a decrease in the price of ready to sell properties. This would be beneficial to buyers. Buyers must follow wait and watch approach so that they can understand the effects of GST with property prices. With the new GST regime, the construction cost has been reduced due to the input tax credit. Thus real estate developers, construction engineers, contractors benefit from the GST reforms. The GST rates also have a positive impact on other stakeholders like labor, material suppliers, etc. The effect on stakeholder is based on tax levied on the goods and services used for construction. 

The above inputs offer a clear insight into the GST reforms in the real estate industry.

How Helpful Are Cobots in Construction?

A collaborative robot in construction work being utilised by various companies.

Changes in building regulations and making them friendlier to the consumers have created a need for the housing sector to improve continuously.  If the organizations in this industry want to revive themselves and start thriving after that, then they need to innovate regularly and adjust to the changing scenarios. The use of cobots at the opportune times to enhance the rate of construction will be one of the areas that the builders must focus on optimally. 

The Future Beckons For Automation

All experts from within as well as outside the construction industry will tell you that the use of robots has already led to several positive changes within the fraternity. Yes, smaller projects can be carried out with the older methods, but when it comes to sizable and complex operations, the need for automation becomes immensely crucial. Technology is being used not only in the execution of plans but also when it comes to designing the entire project. Architects can rest assured about the accuracy of their designs with the help of 3D printing technology and other modern methods. Find out how cobots will be trending in the construction industry.

Repetitive jobs become efficient and accurate

The best thing about using collaborative robots in the construction industry is that they can easily accomplish a large number of monotonous tasks. Shifting of material from one place to another is among the functions that can take a lot of time if human resources are used in completing it. If companies start using collaborative robots in their place, then the job can be done the minimal time. The overall cost will also decrease because you will not have to hire people for it.

Why Are Collaborative Robots Needed?

With time, the design of buildings and other infrastructure that needs to be built has become more complicated than before. The requirements of people must be at par with the changing global scenario in terms of scientific development and standard of living. As a result, the construction industry must keep on moving at the desired speed to ensure that things do not get out of hand.

Collaboration Robots used in construction industry and automation made easy.

Automation can be useful for the environment

Some of you might find this statement a little hard to digest, but the more you think about it, the more evident it becomes. It is safe to say that an increase in the use of collaborative robots to handle various tasks in the construction industry will lead to an immediate decrease in the use of fossil fuels.

At the same time, high-quality automation will curtail the levels of noise pollution in cities and suburbs. So, it must be kept in mind that in the long run, collaborative robots can be beneficial in saving the environment and conserving natural resources for a prolonged period. 

Microsoft HoloLens for the present and the future

Automation will also be one of the most effective methods that can be used to supervise the efforts of human resources on construction sites. A substantial number of construction companies has already implemented the use of augmented reality techniques for constant observation. Cobots enter the construction projects and are expected to provide greater benefits.If you have heard about Microsoft HoloLens, then you would probably be aware of its applications in showcasing architectural designs to clients. All the probable glitches in the building plan can be removed at the earliest with this technology.

3D printing in the construction industry can be valuable in the times to come. Execution of plans and completion of projects in a timely fashion becomes convenient and easily achievable with the help of this technology. The accuracy of 3D printing is phenomenal, to say the least. A small-scale virtual models of buildings and other infrastructural entities can be created as per the requirements of a project. All the pros and cons of selecting different methodologies of architecture can be assessed with the use of this technology.

Cobots and IOT- a deadly futuristic combo

The optimum combination of internet of things and other advanced analytics technology can be a boon for the entire construction industry. Collaborative robots with these features will not only decrease the time taken for the completion of construction projects, but they will also be beneficial in improving the overall quality.

Reviving Dead Malls As Alternate-Use Complexes

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Nowadays, more and more malls are being closed down for multiple reasons. In the US itself, at the beginning of 2006, there were about 1350 malls. But, by the end of 2006, the number dropped down to 1150. The progressive growth of e-commerce and the sudden shift in the customer’s interests and retail industries have caused this closure of malls. So, how do we use all these malls that are shut down? Malls are large area complexes that would simply go waste if it were to be left as it is. That is where the revival idea kicks in. All these malls can be revived and put to good use by using it as mixed-use complexes. Let us check out some of the revival methods of shut down malls:

Educational Institutions
Shopping malls are large spaces which can be put to good use with creativity and skills. Remember the fact that almost all these malls are within the city limits and easily accessible by public and private transport. That makes it a great option to convert the mall to educational institutions like colleges with classrooms, recreational centers, libraries and play areas. It needs to be renovated a bit, but it is always worth the efforts.

Offices
High profile company offices also need a lot of space. A shutdown mall can be easily used as an office with some renovation methods. Take for example the Mayfield mall in Mountain View at California. It was shut down in 1983 due to the decline in sales. Later HP took over the abandoned mall and transformed it into office space. Later by 2013, Google bought the place and renovated it once again to make it the Google Glass headquarters.

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Warehouses
One of the greatest and most easy methods of reviving dead malls is to convert it to warehouses. The malls containing large areas can be easily made into smaller retail spaces with large storage capacity. Probably, the only people rejoicing in this idea of repositioning malls into smaller retail spaces will be the Rack Manufacturers! All the retail spaces would need a variety of racks to store the goods. Browse https://www.displays2go.com/Guide/Get-Most-Out-Your-Retail-Store-Visual-Merchandising-27 to learn how to make the most out of retail stores with visual merchandising methods.

Micro Apartment Complexes
The mall can also be easily renovated to make micro-apartment complexes within it. It can include apartment complexes, restaurants, hair salons and coffee shops. One of the greatest examples is the Westminster Arcade in Providence, Rhode Island. It was known as the oldest shopping mall in the US. It began deteriorating and was shut down in 2008. Later, in 2013 it was renovated and reopened as a micro-apartment complex. Now it has about 48 units of 300 sq ft size apartment complexes complete with restaurants, coffee shops, and salons.

Medical Centres
The dead malls can also be converted into medical centers providing health aids and treatments to the ailing people. The mall can be renovated and changed into lobbies, administration offices, treatment centers, doctor’s rooms, labs, coffee shops and clinical rooms.

The major advantage of dead shopping malls is the large built-up area that can be put to good use with some renovation works. The fact that it is also located in an easily accessible place probably in the heart of a city makes things much easier.

Shipping Containers Gain Steam As Building Blocks Of New Homes

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Shipping containers can be easily put to good use by converting them into anything you like! You can convert it into an office, a house, a swimming pool, an ablution unit and what not! One of the major advantages of shipping container modifications is that it is less costly, needs less labor and is completed within a short time. It is environment-friendly too. Shipping container homes are now in vogue, and more and more people are opting for it. Check out https://www.realtor.com/advice/buy/shipping-container-home-designer/ to know the reasons behind this craze for shipping container homes. The shipping container homes are considered as the hallmark of architectural recycling. The building units can be used in any way as you wish. The shipping container homes are an excellent, durable and inexpensive solution for industrial, commercial or residential usage.

Benefits Of Shipping Container Homes
There are numerous benefits of converting shipping containers to homes. Here are some of them:
Ø Easy to build! Yes! It is as simple as that! Compared to complicated and time-consuming processes needed to build a simple house, the shipping container homes are built as easy as making pie! It doesn’t need months or years to complete the work. It doesn’t need extensive labor and material supplies. It doesn’t make a hole in your pocket. It makes lives simpler and easier!
Ø Can be insulated easily. The shipping container home remains cozy and warm even in chilling winters. The home can also be made resistant to excess heat in summers.
Ø You can move to new places in your home! Isn’t that great? A house on wheels is a great idea for people who love to travel and move to different places. It can also be used as a great accommodation method for site workers who need to move to different sites after work at one site is complete.
Ø Can handle extreme weather conditions like earthquakes, hurricanes, and tornadoes. It can easily handle strong winds up to one hundred and seventy-five miles per hour. They are touted as the best protective shelter against nature’s fury.

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Dimensions Of Shipping Containers
Shipping containers are available in varying sizes. But there are two most common standard sizes available:
Ø Length-20 feet, Width-8 feet, Height-8 feet. Total 160 square feet area.
Ø Length-40 feet, Width-8 feet, Height-8 feet. Total 320 square feet area.
A single container itself can suffice for converting it to a small home. But multiple containers can also be added to it to make larger houses, malls, educational institutions or office complexes.

Cost Of Shipping Containers
20 feet shipping container can cost between $1400 to $2800. 40 feet shipping container will cost between $3500 to $4500. Some containers come along with plans and building kits to make it easier to build and customize it. Some of the shipping container building manufacturers supply prefabricated shipping container houses for prices as low as $15000 and above. Large shipping container homes can cost maximum $215,000. It is still a very low amount when compared to the cost of building a large concrete house.

Tips To Plan The Perfect City from Scratch

Planning a new town from scratch is an overwhelming process if you do not have any guidelines set down. One of the first things to consider while planning a new town is the location. While deciding the location, you will need to keep an eye on few factors like proximity to the nearest major cities, water sources, etc.

  • Ensure Reliable Water Source Is Available
    With water scarcity becoming a common problem in different corners of the world, it is essential that you check the planned location for the new town has a reliable water source. As time goes on, the number of people in the town will increase, thereby placing more demands on the water source. It should be able to handle the growing demands in order to sustain the town. If water scarcity becomes an issue, in time people will start moving to different parts of the country, turning your magnificent town into a ghost town.
  • Ensure Financial Liquidity
    Planning and building a new town from scratch requires a lot of resources. It is going to be a huge financial burden unless you have the organization or committee you represent has the means to pay it. It has been observed time and again, how different countries plan out new cities by attracting interest from private investors. This assures liquidity for the construction of the city to be seen through till the very end.
  • Create Jobs
    People are willing to move to new locations on the assurance of finding good paying jobs. So make sure that the town you are building will have well planned areas from industries, business, and firms and so on. The city can be sustainable on its own only if it provides jobs to its working force. With the growing number of employment opportunities, the number of people immigrating to the city will also increase.
  • Play Nice With The Locals
    Nobody likes it when outsiders come to claim a stake in their land. Similarly, if the location you have chosen to build your fabulous new town is already occupied by locals, keep them in the loop about the proceedings. You can make them your allies by involving them in the construction of the new city. However, there may be cases where the locals are not very welcoming of the new changes you are bringing forth. In such cases, you need to consider different negotiation tactics to encourage them to accept the inevitable.
  • Create A Master Blueprint
    You can create your masterplan for the new city from the comfort of your office using specific software. This helps you to lay out plans for the city including the basics like electricity lines, sewer pipelines, public transportation, and water systems and so on. Recently masterplans for cities also include Wifi sensors, sensors, and fiber optic grids to increase the connectivity. Once the masterplan has been created, it makes it easier to plan out the actual process. It also helps visualize the city before it is actually completed.
  • Create A Transport System That Links Different Transportation Modes
    If your masterplan for the city includes a manmade canal, you can consider having a water transportation system as well. The other usual transportation modes include a metro system, tram system, public bus transportation, taxis, etc. Modern cities today are interlinking all the transportation systems together and bringing them under one umbrella. This makes it easier for the people using them and the people running them. Once all the systems run in a coordinated manner, the number of cars on the road will go down thereby reducing the carbon footprint of your city.
  • Mark Areas For Specific Type of Businesses
    It has become common to see at least a coffee shop along every street.Businesses like laundry shops, coffee shops, fast food shops, newspaper shops, spas, salons, etc. are all used by people regularly. The same way there are some shops that need to be placed around the city in different places to ensure that the public has easy access to them. For example people will have access to spa therapies from best spas like Riverday Spa, various kinds of foods , different shops and services which are nowadays basic needs. This makes it easier to go for Ayurvedic body massage from Riverday Spa. Planning a city well includes being aware of the small details like this one. You can use refer to the master plans of other successful cities to get a better idea on how to place the different businesses within the city.

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