The cabinet has amended a bill to regulate the real estate sector, protect home buyers and curb undeclared “black money” in property markets that costs the exchequer billions of dollars in lost taxable income.
The decision by Prime Minister Narendra Modi‘s government to amend the bill, which was submitted by the previous government in 2013 but not passed by the upper house, aims to boost investor confidence and stamp out illegal practices.
The new rules, applicable to residential and commercial developments, will make it mandatory for all projects and brokers to be registered with the real estate regulator who will oversee transactions and settle disputes.
“The bill seeks to ensure accountability and transparency, which will in turn enable the real estate sector to access capital and financial markets essential for its long-term growth,” the government said in a statement on Tuesday.
During recent years sluggish economic growth and delays in getting approvals stalled several real estate projects, leaving buyers waiting for their homes and developers holding high debt.
“This will be a game-changer for the sector,” Rajeev Talwar, executive director at DLF Ltd, India’s top real estate developer.