Prime Minister Narendra Modi recently announced the demonetisation of existing notes of Rs 500 and Rs 1,000 in India, effective from November 9, 2016. This move will prompt people to shift to electronic transactions and the use of plastic money will increase. The impact on the economy will be significant as a large part of the black economy would become part of the Indian economy. This is certain to reflect in next year’s GDP figures. The attack on black money through demonetisation is also expected to boost government revenues in a significant way. With a large part of unaccounted cash coming into the system, a lot more money will become accountable and taxable than was the case earlier.
As such, we expect a surge in Indian investments in Dubai property as a result of the recent shift. Now that the money is legal and cleansed, people are looking at various new avenues to recover some of their losses, and RoI that is tax free is attractive for obvious reasons.
Dubai is now a sought out destination to invest in tax-free property with solid returns for investors and end-users looking at a second home. Our flagship project, Sobha Hartland, is expected to provide the profit that end-users and investor seek. In fact, a 2-BHK apartment is estimated to yield more than Rs 2.3 lakh of tax-free rental income every month plus the annual advantage of 20-30 per cent capital appreciation. Construction is already underway on this prime property – located on the recently launched Dubai Water Canal – with the first phase of apartments and villas expected to be completed by December 2017 and 2018, respectively.
We are getting a lot of enquiries suddenly from India. Under RBIs Liberated Remittance Scheme, a couple can transfer Rs 3.4 crore legally per year, which can buy them of a 2-BHK apartment in Sobha Hartland. There are several payment plans also available when opting for bigger apartments and villas. The Foreign Exchange Management Act (FEMA) came into effect on June 1, 2000, replacing the Foreign Exchange Regulation Act (FERA). The intentions of the FEMA are to revise and unite laws that relate to transactions of foreign exchange and encourage an orderly maintenance and development of the foreign exchange markets in India.
Investors will benefit from Dubai being considered the most sustainable city in the region and a safe haven in terms of real estate investments. With prime properties developed in Dubai by Sobha, it has earned recognition for great quality as the number one brand in India and one of the top real estate companies in the Arab world. That’s because we are the only backward integrated company in the world – we do everything from start to finish ourselves.
The Sobha Hartland project was launched in 2014, which is a $4 billion, mixed-use development. The resort-style luxury housing project encompasses 8 million sq ft of freehold community in Mohamed bin Rashid Al Maktoum City. Thirty per cent (2.4 million sq ft) of the community is only reserved for greenery. It is the only freehold community located on the Dubai Water Canal in the epicentre of Dubai with an easy access to the city’s hottest attractions like the Burj Khalifa, Meydan racecourse, Ras Al Khor Wildlife sanctuary and many more within a 3 km radius.
With a legacy and track record of over 40 years, Sobha Group’s vision is to be the most trusted and respected real estate organisation in the GCC and to continue to transform the way people perceive quality by pioneering innovative projects and exceeding customers’ expectations across core markets.
About the author: PNC Menon is the Founder & Chairman of Sobha Group.