After demonetisation, the Modi government has taken several other steps in a bid to curb black money. And now linking immovable property transactions to Aadhaar seems to be on its agenda. Although the government has from time to time denied market rumours that it is going to link Aadhaar with property deals soon, but Housing Minister Hardeep Puri has hinted at its possibility. Talking to a TV channel on Tuesday, he said that he has no doubt that the linkage would happen and that “linking property with Aadhaar would go a long way in sucking out black money from real estate and also help in crackdown on benami properties.”
It is clear now that like many other things such as PAN card, bank account and mobile number, Aadhaar may be required to be linked with property transactions too sooner or later. And whenever that happens, that will be beneficial for real estate and homebuyers.
Industry experts say that the seriousness and determination of the government in its fight to curb black money were reiterated after Union Housing Minister yesterday indicated that linking Aadhaar numbers will be mandatory for property transactions going forward.
“After demonetization, this is definitely a next logical move towards restricting the flow of black money, as real estate transactions have in the past been notorious as an avenue to park unaccounted funds. Also, linking real estate transactions with Aadhaar numbers will make detecting and discouraging benami transactions much easier. Since the government is planning to bring all types of property transaction under the purview of Aadhaar, secondary market transactions will now come firmly under the regulatory lens,” says Anuj Puri, Chairman, ANAROCK Property Consultants.
Though the primary market was brought under regulatory framework post RERA, secondary market transactions were not included in RERA’s purview and “with transactions in this segment getting linked to Aadhaar numbers, we will probably see a further deal deceleration in this segment. More than ever before, real estate will now become a decidedly end-user driven market,” informs Puri.
Some experts are of the view that apart from curbing black money, this move would also increase transparency in the sector. They say that the Modi government’s move to track unaccounted money received quite a bit of criticism, especially since it excluded real estate transactions which are believed to be the biggest mode for parking black money. Linking Aadhaar to property deals is a positive step towards increasing transparency in the real estate sector.
“To avoid paying higher taxes, a number of properties were registered at lower prices than the actual transaction value. However, now with Aadhaar already being linked to bank accounts, mobile connections, PAN cards, subsidy accounts, etc. the proposed linkage to property deals is a welcome step towards curbing black money transactions in real estate. With the recent policy changes that have impacted the sector considerably, most investors have already disappeared and the end user dominates the market today. The sector has slowed down quite a bit in the last few quarters and with this move, the overall time for revival, both in terms of sales and price appreciation, would lengthen,” says Divya Seth Maggu, Associate Director, Valuation & Advisory Services, Colliers International India.