The chosen property is an eco-friendly two-story country house located in Aldona, Goa. This property is the perfect getaway from the crowds and usual distractions of modern life. This home is well suited for those wishing to reconnect with themselves, the environment and the natural rhythms of life.
The uniqueness of this property stems from each facet of the home having been designed in harmony with its beautiful surroundings. This is one of the first homes in Goa shortlisted to receive a ‘Gold’ certificate from the India Green Building Council.
The property features four bedrooms and four bathrooms. Three of the bedrooms are in the main house. (The fourth is in the pool pavilion.) All four bedrooms are open on two sides, have teak wood doors and polished cement floors. The three bedrooms in the main house also have basalt walls. The master bedroom, has an elevated view of the surroundings. The built-up area of approximately 4500 square feet is constructed on approximately 1226 square yards of land.
Everything started when the owner, Anjali Mangalgiri, and her husband bought a piece of land in Aldona in 2010. They began construction in 2011 and spent about two years building this two-story house. Ms. Mangalgiri works in real-estate design and construction. She and her husband live in New York City but both grew up in India. They fell in love with the bio-diversity of Goa after visiting friends in the state and started to look for land to build a house.
Shivajirao Gaekwar shares a note by Vishal Agarwal of BMR Advisors, Mumbai, about tax implications of buying property in London
London: The tax implications discussed in ‘Part 1: The Private Individual’, apply equally for residential property owned by an Indian company for investment purposes and not in the course of its business.
If a resident individual were to acquire overseas property through an overseas company (‘Overseas Holding Company’) established by the individual, the associated tax implications will be different from those summarized in the previous post.
On the basis that the Overseas Holding Company is controlled and managed outside India, it ought not to be regarded as being resident for Indian tax purposes. Rental income, if the property is let, would accrue to the Overseas Holding Company. Such income should not be liable to tax in India since it would accrue to the Overseas Holding Company and not to the resident individual. Similarly, if the property is sold by the Overseas Holding Company, any capital gain realized from the sale would also accrue to the Overseas Holding Company and should consequently not be liable to tax in India. Income distributed by the Overseas Holding Company as dividends will be taxable as ordinary income in India. If the owner of the Overseas Holding Company is an Indian company, such dividend is taxable at 15 percent (plus applicable surcharge and cess); if the owner is an individual, tax would apply at the ordinary rates applicable to the individual.
If shares in the Overseas Holding Company are sold by the resident holder, any resulting capital gains would be liable to tax in India. Shares held for more than twelve months (and not thirty-six months as is the case for property) are treated as long-term capital assets. If held for twelve months or less, they would be treated as short-term capital assets. Such gains would be liable to tax at the rates discussed earlier. Any loss resulting from the sale of shares of the Overseas Holding Company can be offset against taxable gains in the same manner as discussed earlier.
Wealth tax provisions on ownership through a company
Where the property is acquired through an Overseas Holding Company, the asset that the resident individual will hold is shares in the Overseas Holding Company. Shares are presently not chargeable to wealth tax.
An individual who owns property outside India is required to report the details of such property in his / her annual tax return.
Direct Taxes Code Bill, 2010 (‘DTC’)
The current Indian tax law is proposed to be replaced with the DTC with effective from April 1, 2013. Key areas of difference in tax analysis under the DTC are (i) the concept of “annual value” referred to above has been dropped. Instead, only actual rent received or receivable on letting out of property is charged to tax; certain prescribed tax deductions continue to be available; (ii) the concept of Controlled Foreign Corporations (‘CFC’) has been introduced bringing to tax in India profits accumulated in an overseas holding company even if not distributed; (iii) the property will be treated as long-term if held for a more than one year from the end of the year in which it was acquired; and (iii) wealth tax is also leviable on shares held in a foreign company that qualifies as a CFC.
Shivajirao Gaekwar shares a note by Vishal Agarwal of BMR Advisors, Mumbai, about tax implications of buying property in London
London: The one thing that is certain when spending the summer or for that matter, any season in London, especially when one owns a flat there is the relaxed, fun-filled time that London offers residents and visitors.
The only other thing that is more certain than the joys of owning a London flat are tax implications. One of the least uncertain things in one’s life is perhaps tax, and nothing can be more unpleasant than being slapped with a tax bill at the end of the year. Saffronart Prime London feels a buyer ought to get into overseas property ownership well-informed.
Owning residential property overseas could, based on facts, attract Indian income tax and wealth tax. Here are a few things to keep in mind.
An overseas residential property owned by a resident individual could potentially result in two streams of income (i) rental income, if the property is let out, and (ii) capital gains, if the property is sold at a future date. On the basis that the individual owner of the property is resident in India for tax purposes, all such income would be liable to tax in India.
Taxation of rental income in India
Income tax is levied on the ‘annual value’ of the residential property for any year.
Where the owner actually uses a residential property as his residence, the annual value of one such property is taken to be nil. Proceeding on the premise that an individual who acquires residential property overseas already owns residential property in India which he / she occupies for personal use and the exclusion from tax discussed above is applied towards this property, the annual value of any further properties acquired by the individual, whether in India or overseas, would be liable to tax at the higher of the amounts calculated in the manner described below:
(i) the sum for which the property might reasonably be expected to be let from year-to-year regardless of whether or not the property is actually let; or
(ii) the rent received or receivable (ignoring rent that cannot be realized), if the property is actually let out.
However, where the property is meant to be let out, but remained vacant for want of a tenant for the whole or part of the year, and by virtue of this vacancy the rent received in point (ii) is less than the amount referred to in point (i) above, then the annual value will be taken as the amount actually received or receivable during the year.
From the annual value so determined, the owner is permitted tax deductions for (a) municipal taxes paid to local authorities; (b) 30 percent of the annual value as a standard deduction; and (c) interest payable on a housing loan subject to a maximum of INR 150,000 (approximately GBP 1,875) if the property is not meant to be let out, and without any limit if the property is meant to be let out.
The net income determined in this manner will be liable to tax under the head “Income from House Property” at ordinary income tax rates applicable to the owner. At present the maximum rate of tax in India is 30 percent plus applicable surcharge and cess. If the computation results in a loss, such loss can be used to offset income from any other source earned by the owner in that year. Any unabsorbed loss can be carried forward and offset against similar house property income for a period of eight years.
Tax implications on sale of the property
Gains arising from sale of a residential property located in London would be taxable as “Capital Gains”. The taxable gain is computed by deducting from the sale consideration, the cost of acquisition (including costs directly linked with purchase of the asset), the cost of any improvements and any expenses incurred in connection with the sale.
The rate of tax that will apply to such gains is a function of the period for which the property has been held prior to its sale. The property would be regarded as a long-term capital asset if it has been held for more than thirty-six months prior to its sale. Gains from sale of such assets are classified as a long-term capital gains (‘LTCG’) and subject to tax at the rate of 20 percent (plus applicable surcharge and cess). In computing the LTCG, the cost of acquisition is increased by applying index factors published by the Indian Government. If the property is held for 36 months or less, the gains are treated as short-term capital gains (‘STCG’) and taxed at the rates applicable to ordinary income.
Where the gain is a LTCG, Indian tax laws provide for a relief from income tax if the proceeds from the sale are invested in qualifying assets, subject to prescribed conditions.
If the sale of the property results in a loss and such property has been held for more than thirty-six months, the loss would be treated as a long-term capital loss (‘LTCL’). Such loss can only be offset against any LTCG earned in that year from the sale of any asset and for a period of eight consecutive tax years in a similar fashion, until the loss is exhausted. If the property had been held for a period of thirty-six months or less, any loss from the sale of such property would be a short-term capital loss (‘STCL’) and such loss can be offset against any capital loss, STCL or LTCL in that year from the sale of any asset and for a period of eight consecutive tax years.
In addition to income-tax, wealth tax is payable annually at the rate of 1 percent on net wealth in excess of INR 3,000,000 (approximately GBP 37,500). Wealth is defined to include, inter-alia, all residential property owned by a tax payer, other than one property which is regarded as being held for personal use. However, where a residential property is let-out for a minimum period of three hundred days in any year, such property will be exempt from wealth tax.
For wealth tax purposes, the market value of the property as at March 31 of each year is to be considered.
Shivajirao Gaekwar shares the latest update about this spectacular home
New York: Nivim Goa is slated to be the first certified green home in Goa aiming for the ‘Gold’ level certification. The green home certification is administered by the Indian Green Building Council, an Indian counterpart to the US Green Building Council.
The green homes certification provides a comprehensive list of strategies to be employed while building a residence where the goal is to reduce the impact of the construction activity and building occupancy on the environment.
An important criteria at Nivim was to employ green practices without sacrificing the luxury lifestyle for its occupants and architectural design of the house. Read about some of Nivim’s notable green features.
Green building practices today are a combination of common sense traditional wisdom as well as new innovations in technology, material and building construction practices. At Nivim Goa, sustainability was a criteria from day one of design and construction and a factor considered at all stages of decision making.
Impact on the environment was a key factor while designing the house. During construction, Nivim Goa minimized use of energy and resources by using local materials and materials with high recycled content while also minimizing waste. During operations, the house will consume less energy and water, use solar energy, recycle and resuse rain water and grey water on-site while providing a healthy environment for occupants.
But ‘Why build green’ in the first place? “For Nivim, the decision was easy – to preserve the special character of Goa and to retain it in the pristine condition that brought us here in the first place”, says Anjali.
Below are reasons on ‘why building green’ is critical to eco-sensitive environments such as Goa:
– Buildings consume large amounts of energy and resources during construction and generate waste
– Building continue to consume energy, water and other resources during their lifetime along with continualy generating waste (domestic waste, solid waste and water waste), all leading to burdening existing infrastructure
– A building on a previously vacant greenfield site changes the land and its relationship to the environment:
– buildings change the natural landscape of the site by reducing existing vegetation, changing natural topography, and water patterns
– create concrete barriers to absorbtion of water back into the earth thus increasing storm water runoff (leading to flooding, water logging) and fall in underground water table (due to reduced recharge)
– buildings absorb more heat and impact the micro-climate of the place
– result in loss of habitat for animal and bird life
Shivajirao Gaekwar shares an update about NIVIM Goa
New York: We are delighted to post this update about NIVIM, one of our newest properties for sale in Goa through Prime Properties. The house is currently in its final phase of construction and scheduled to complete in August, 2012.
NIVIM Goa is the labour of love of Anjali Mangalgiri, a New York returned architect who moved to Goa with the sole purpose to build this house. The house is a culmination of her vision to bring architectural excellence and sustainable design to mainstream construction in India.
NIVIM Goa is built in contemporary tropical style taking inspiration from notable architects in the subcontinent such as Geoffery Bawa, Laurie Baker, Kerry Hill, architects in Auroville and Goa’s own Gerard da Cunha and Dean D’Cruz. The house is projected to be the first green rated building in Goa and even has its own blog.
Images of selected Geoffery Bawa projects
Anjali describes the concept of the house as follows, “For a house to be built in Goa, it must allow the user to seamlessly reconnect with nature while making every effort to preserve the reasons that make Goa special….its untouched green environs, mostly unpolluted waters, clean air, abundant biodiversity… I can go on and on…” She goes on to explain that sustainability and green design actually offer the most exclusive luxury today. It is a concept that is well understood, accepted and desired most among worldly thinkers and innovators. In addition, green buildings are more expensive to build and require a force of smart people behind them making them very exclusive. (Read more about the concept of the house, http://www.newyorkgoadiaries.com/2011/06/design-concept.html)
Selected views from NIVIM Goa under construction showing the two main trees at the center of the site that now form an integral part of the house design
NIVIM Goa sits on a 1025 square meter site on a hill in a sleepy village in Goa. Before starting construction, the site had 14 fully mature trees. The design of the house incorporates all the existing trees that include two jackfruit trees, one mango tree, two tamarind trees and one telful tree. Two trees in particular were located bang in the center of the site and look like they had been there for 100’s of years. One of them rises up almost 15 meters, or 5 stories. Anjali says, “These trees have been here way longer than we have, we could not even conceive of removing them…they are instead now an integral part of the house design and lend it a special character that is hard to replicate. Plus, trees are our most basic lifeline, they provide shade, hold the soil together to prevent erosion, require almost no additional irrigation…provide fresh produce and a home for the lovely birds and squirrels.” She adds, “The new owners of the house can even consider building a treehouse or a machan to further enjoy these large trees based on their specific requirements…” The new landscape design of the house adds other native fruiting and flowering plants to the site including chikoo, fig, kokum, champa, etc.
Anjali was completely convinced that the house in Goa should not resemble any apartment or house in the city. She laughs while saying, “I do not understand why anyone would build a home in Goa to look like their tight homes in the city, when they are coming to Goa to get away from it all….” She firmly believes that there is a distinct vocabulary for building homes in the countryside. It starts by respecting nature, ensuring minimum impact on site and surroundings and then continues in design of spaces which she says should be open, spacious, well lit and airy and finally she stresses that the country design vocabulary is distinct when it comes to choosing the materials for construction and final finishes. She advocates the use of natural materials as much as possible. She also advises to learn from the traditional building practices and typologies as they have developed after years of trial and error to resolve the local issues resulting from weather patterns, readily available materials and local labour skills. Another advantage of building with these principles is that it provides a great starting point for green building design.
Sketches showing the front of the house and detail of a guest bedroom with photos of the final built product
As a result, the house is designed such that two walls in each room can completely open to make the rooms a part of the surrounding landscape. Each bedroom is designed like a pavilion in the garden with its own private verandahs and green space as well as large bathrooms that can only be built in the countryside with their own dedicated open space and open baths. The remainder of the site is designed with overlapping courtyards and gardens.
A special feature of the house is a unique pavilion overlooking the pool that is designed to be a self contained unit with a bathroom, bedroom and a covered sit-out. “This space is specifically designed to morph based on the requirements of the user, time of day and year. The pavilion can act as a pool pavilion during the daytime, a movie screening hall/ game room in the evening, party central while entertaining, a quiet creative studio, as well as a separate cottage for guests maybe when the owners of the house are not themselves in Goa using the main house.” Anjali compares enjoying a second home in Goa like being in the Hamptons for the summer in New York. She compares her experience and says, “In the Hamptons, one typically uses their second home to entertain family and friends, hence we have designed each bedroom suite and the pavilion building to have its own privacy and comfort and the central pool and deck space for everyone to come together and enjoy lazy days and evenings by the pool…”
NIVIM Goa is built with tremendous love and that is evident in every small detail in the house. Anjali can talk at length about the big design concepts to smallest details like the choice of custom made wash basins and brass inlaid floors. We hope to share some of this journey with you. The following is a brief timeline of the house. It follows Anjali’s frequent updates on the project blog that outline the thought in design, specific construction details, green elements and challenges in implementation.