TAILIEUCHUNG - REAL ESTATE UPDATE January 2009

The International Foundation of Employee Benefit Plans is the largest educational association serving benefit plan advisors. For over 50 years, the International Foundatio has served as the premier source of benefits education and information, providing objective accurate and timely information. Services include in-person training, distance learning and publications covering a broad range of topics. Programs are available for all levels, from basic concepts to advanced strategies. The Foundation also sponsors the CEBS designation program with the Wharton School of the University of Pennsylvania. The International Foundation offers a membership with free services like personalized research, online peer networking, publications and daily industry. | January 2009 REAL ESTATE UPDATE BURGES SALMON Thompson HINE Advisory Bulletin Real Estate Investment in India As one of the world s fastest growing economies India possesses great potential for commercial real estate investors and developers. Changes in the rules governing foreign direct investment FDI in real estate have made the Indian market more favorable to foreign investors however many pitfalls remain. In order to fully realize the benefit of these rules and regulations it is critical to understand the tax and regulatory framework and how to properly structure a foreign investment in Indian real estate. This briefing identifies and explores some of the key issues concerning real estate investment and development in India today. INDIA S Real Property Framework The Indian real property system differs from that of many other developed countries in several important respects including the fact that a guaranteed land title system has yet to be developed and owners of vacant land must either develop the land or risk confiscation of the land by the government. Current land ownership records in India provide only presumptive title because most transfers of real property have not been recorded with the state. As a result it has been reported that ownership of nearly 90 percent of land in India could be subject to conflicting ownership claims. Although the federal government is working to improve India s land title system by establishing a certification authority to register land titles and encouraging state governments to implement and maintain their own updated land title databases no state has taken the lead in implementing necessary reforms. In addition to the presumptive title system many states are still operating under the Urban Land Ceiling Regulation Act ULCRA which the federal government enacted in 1976 to prevent the hoarding of real property. The ULCRA requires that owners of vacant land beyond a certain size the standard varies by state but ranges from .

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