Re: Acron Homes
 

Hi again cornishboy,

Many thanks for your persistence on this one , were getting through some really good stuff here.

Regarding the price or value equation, im aware that acron charge the same price to all comers and the point i tried to make in a previous post on the braganza world thread was that that this practice is indefensible.

The reason being, that the risks to a foreign national in acquiring immovable property in india and the risks to say a resident indian are very different and there is a direct correlation between price and risk in any market place.

For example, at one end of the scale, there is no restriction on Indian born residents accessing the property, registering the freehold or accessing the sales proceeds if they wish to sell. The foreign national has problems in all areas as of now, the nris and pios are somewhere in the middle of the equation.

In my book, the current price should refllect these obvious differences in risk for different classes of acquirers and this is variable with time and circumstances . So, eg If freeholds are readily available to foreigners at some stage in the future then the risk profile will have changed for the better and so should the price , ie go up .

Back to the now and lets try and put a value on a property, lets by way of example take a resident indian who has paid say £100 k sterling for a villa ,somewhere in goa. Thats the bench mark figure for a person at the top of the range of the classes of acquirers, lets call them mr and mrs perfect.

They have right of access to their property in india due to their citizenship, they have a registered freehold, can sell at any time at the freehold price and immediately access both the original capital and the profit.

Then lets take mr and mrs jones from sheffield, they have no right to access, they are at risk from the visa system.They cant register a freehold , only a five year lease, they can only sell the lease through a convoluted arrangemant with the developer. Best way,they can only fully access the original purchase price , the profit is locked in and cannot by legal means leave india and also appears to be black money with all the risks that entails.

Hope your all with me so far, cuz its now time to do the valuation of the same property held by mr and mrs perfect versus the curent value to mr and mrs jones.

Taking our benchmark price of £100k, im now going to discount it for the various risks ive outlined above.

Access to property risk - 15%

Freehold vs 5 year lease - 90%

Access to profit and criminalisation risk - 20%

So the current value of the same property to mr and mrs jones is around £6,800.

Moving on to your other points, ive never suggested that Acron were in any way responsible for the change in attitude by the authorities.

I am simply saying that there has been fundamental changes regarding access , registraton etc to foreign nationals and the developers are carrying on as if nothing has happened. Thats indefensible, its the equivalent of taking sweets off children.

The value of my house in goa today is zero because i cant sell it , thats a big drop.If a foreigner in escapist mode was prepared to pay me the old freehold price for my house i wouldnt take it because it cannot currently be worth it and i certainly wouldnt actively promote it and pretend all was well, because i value my integrity above everything.

If and when x visas are again available to foreign nationals and the register is unblockeed, then of course we re - do our sums.

Regards

douglas

Re: Acron Homes
 

Should do the same in the UK....

Re: Acron Homes
 

I certainly get more than 3% (not sure what the rate is at the moment) and brought in 50000 sterling through official banking channels and have an FIRC on an NRO account. When I got residency I asked if I should change my account and they said I shouldn't. Legally you can't have one of these accounts for more than 6 months(I think). Confused?:confused:

Re: Acron Homes
 

;)

Re: Acron Homes
 

You're talking about 1 year X visas and residency but the rumours are that Brits will only get 90 days. The Govt. don't want long stays. Crossing the border here is not very easy.

Re: Acron Homes
 

Hi all,
Have followed your this discussion carefully, and have like keithrogers decided to cancel "our" flat in Villa Maria. (Very unhappy and p'd off about this all week!) Acron has informed us the same, £300 for paperwork etc and then refund the rest. What I don't understand is why people still seem bothered about whether they can get x visa or not. If foreigners are not legally allowed to own propery, it doesn't really matter does it? I have been going to India for the last 10 year, roughly about twice every year, both for business and as a tourist. I work closely with Indian companies, and run my own here which is based on trade with India. My business visa runs for 2years, but as I understand it, it makes absolutely no difference. I have also been to India on a tourist visa, 6moths, and needed 2 extra weeks, which was granted by some governement arm in Delhi. Timeconsuming and red tape infected, but I got my 2 weeks in the end. But in the end as said befor, it really doesn't make any difference does it?
Another thing that has crossed my mind is here in the UK we are bombarded with TV shows about investing abroad (ie "a home in the sun" or something like that or "the overseas propery channel" on sky etc) These shows continusly tells you to buy propety in Rumania, Bulgaria, Morocco and other places where one would really really really not want to live (I have been to these places ...) Why have they NEVER been to Goa? It is without a doubt the best value for money, IF you could actually buy properly there...
I am extremely dissappointed, most probably not the only one, as I love India and to be honest, I dont really want a "home in the sun" anywhere else! Just hoping the laws will change before my retirement, which wont happen for another 28 years!
THANKS DOUGLAS FOR ENLIGHTEN ME!
Susanne

Re: Acron Homes
 

Hi Susanne/ Calvin,

Thank you for your last para.I agree that goa has its attractions and have met many brits who havnt travelled further than the canary islands who think india is dirty, chaotic, poor and has funny food. It is and has all of those things, but its also a different planet, i find it fascinating because of that, its is so different to the west and i try ( or did try, before they threw me ought) and deal with the chaos, poverty and injustice on the way.

Without stating the obvious, foreign nationals are allowed to own property in india, FEMA clearly says so, but they must be resident in order to comply with the FEMA "general permission" conditions. The x visa is essential to enable you to stay in India for 183 days or more and for the foreign nationals to become resident, one of the conditions of compliance. Thats why the x visa is coveted , its the key to residency.

A lot can happen in 28 years and i hope you can fulfill your dream on day.


regards
douglas

Re: Acron Homes
 

Suzanne and Calvin.

I too, and I’m sure many, many others are very disappointed in the shift of the Goan / Indian Government towards excluding foreigners from buying property and retiring in Goa.

After all, it can only be good for the local community if we spend our money (money that was earned abroad). And before you jump in Douglas, I also understand that the demand for property has led to inflated prices etc, etc, and that is not good fiscally.

One of the main attractions of Goa to the Brits - apart from the sunshine, is the low cost of living. But, as the saying goes….. you only get what you pay for.

There is no garbage collection, hence the piles of rotting rubbish lying around everywhere. (That may be something we don’t mind too much when we are on our holidays, but living with it could be a different story).

As far as I am aware there is no proper sewage disposal either. If development continues at the same pace as in the last 4 years without the proper infrastructure to cope, what kind of squalid place will it become?.

If it’s any consolation Suzanne and Calvin, in 28 years time, I believe that Goa will have become a place where you wouldn’t want to be. You only have to look back at how much it has been spoiled over the last 10 years.

Re: Acron Homes
 

Hi Grady,

Would douglas jump in?

Not against such an enlightened, reasoned and articulate contributor as you. I agree with everything you have said.

Its mainly the exponents of the greater fool theory that experience douglas's lightening quick hand speed, as he reaches for the reply key.

regards to all

Re: Acron Homes
 

Hi all,

Just occurred to me that some may not know what im talking about when i referred to the greater fool theory in my last post

I heard it most days in my office (and recently on this site) and it goes something like this -

"I havnt done much research on this investment( essential) but everyone else i know ( the fools) is piling in and i dont want to miss out ( fear and greed).I also think that i will be able to sell it (to a greater fool) whenever i want to and at a substantial profit"

The moral of the story, is that this theory works fine until the tipping point is reached and suddenly your the last fool in the line.

douglas

Re: Acron Homes
 

Lemmings me thinks ??


Keith Rogers

Re: Acron Homes
 

Hello,
Would this be a correct assessment of the CURRENT situation if buying a "lease agreement property".

1. You can use the property for six month periods on a tourist visa, without any further permissions being obtained.

2. You cannot currently obtain the freehold until this current investigation is concluded and they start issuing X visa's again, unless of course the law is changed and X visa's are withdrawn permanently.

3. You can sell the lease agreement to anyone, if the buyer is Indian he can obtain the freehold. If he is a foreigner, he would buy under the same conditions which the seller bought.

4. Any profit made "might" be subject to C.G.Tax.

5. You can have a tourist bank account for six monthly periods.

6. The lease agreement or freehold forms part of your estate so can be put in your UK will, which is recognised in Indian law (just heard that one).

Re: Acron Homes
 

Hi Bryson 7,

If you want douglas's opinion, 1 and 2 i accept.

Regarding transfer of the lease in 3, it depends on what the agreement says, does it have a transfer clause in it? If the deed is silent on the matter you probably dont have any say in the matter unless case law indicates to the contrary. The developer calls the tune in this case as he retains the freehold and you just have a clean 5 year lease thats not transferable . He may transfer it at his discretion of course to the person of your choice, just like he may roll over the five year lease. On the other hand he may choose not to. Not withstanding the above, please read my earlier post on different values for different classes of acquirers, would you really charge a fellow foreign national the freehold price for a five year lease etc?

Item four, any profit is definitely subject to cgt, if the arrangement is as outlined by cornishman, you have major problems, because the developer appears to be hiving off the profit element to the foreign national out of self interest. It is probably black money and you would be criminalising yourself by accepting it.

Item 5 looks ok.

Item 6, you are right , a will is a worldwide document, but is there anything to inherit, is your agreement of any value?. The first problem is transferability , the lease may die with you, see my response to three.

The second problem your executors would have is valuing the lease. On day one of the agreement you have the time value that covers five years of tenancy, on the last day of the five year period the value is nil. If the developer rolls over the lease the whole cycle starts again.

Finally, under portugese law you cant disinherit your children, so if you can find a decent lawyer in goa you need to examine any conflicts that could
occur regarding your uk will under Goan law.

All of this is academic remember, you can be entitled to the earth under the contract, but if the place is lawless ,in the case of dispute you wont get a judgement or enforcement of that judgement.

Once again, why would anyone burden themselves with all this stuff, when you can simply rent an apartment for a few weeks ?

regards

douglas

Re: Acron Homes
 

I'm going for options 1 & 5,sod the rest !!!

Let someone else have the grief !!!

Roll on my refund I say.....


Keith Rogers

Re: Acron Homes
 

Hi,
Douglas and Keith thank you for your comments regarding my post.
Looks to me as if this situation could happen to foreign buyers in many parts of the world, Thailand springs to mind.
No matter how much homework a buyer does or doesn't do, if a government decides to move the goal posts you are at their mercy.

So, guess the bottom line is. Read the contract and hope any goal post moving is only temporary.
Some real horror stories coming out of Spain at the moment regarding illegal developments.
Hope all turns out well for buyers.
Guess this current situation can be seen as the government trying to protect Goa for tourists and its future generations, which can't be bad. So if it's illegal find it and stop it .Can't argue with that, or can we Douglas?