land ac­qui­si­tion made easy

Hindustan Times (Chandigarh) - Estates - - FRONT PAGE -

What is JDA? In to­day’s mar­ket, many de­vel­op­ers are sign­ing joint devel­op­ment agree­ments (JDA) with lo­cal land part­nerd on a rev­enue-shar­ing ba­sis.The model en­ables land own­ers to mon­e­tise their land parcels that they were not plan­ning to de­velop for the next few years, and also helps them share risks in a slow mov­ing mar­ket

Bud­get 2017 and JDA: Bud­get 2017 has pro­posed chang­ing the cap­i­tal gains tax li­a­bil­ity for JDAs signed for de­vel­op­ing real es­tate projects. It has clar­i­fied that if a JDA is signed for the devel­op­ment of a project, cap­i­tal gains tax will only be paid in the year of com­ple­tion of the project and not at the on­set, as is cur­rently the case

How will the pro­posal help? The pro­posal is ex­pected to pro­mote the JDA model as an ef­fi­cient way of ac­quir­ing land parcels in a cap­i­tal-scarce en­vi­ron­ment; it is also likely to boost af­ford­able hous­ing projects

Will home­buy­ers ben­e­fit? Since the am­bi­gu­ity has been re­moved, JDAs will be more ac­cept­able. Ad­di­tional costs due to com­pli­ances as well as le­gal costs are now likely to get re­duced, and the ben­e­fit passed on to home­buy­ers

DMA ver­sus JDM: A DMA will have a pro­fes­sional com­ing in to com­plete a project for a man­age­ment fee. The joint devel­op­ment man­age­ment (JDM) agree­ment in­volves both the builder and owner de­vel­op­ing the site on a rev­enue­shar­ing model. Un­der a DMA, a pro­fes­sional de­vel­oper takes up a project for a fee, which ranges from 12% to 15% of the project sale pro­ceeds

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