Article 370 Revoked: How Will It Impact Real Estate Purchases In J&K
With the government revoking the special status granted to Jammu and Kashmir under Article 370, as well as Article 35A and also moving to bifurcate the state into two separate union territories, its real estate market would be open for outsiders, too. However, property investors must wait and watch for further clarity, before they decide to make a move.
J&K real estate: Too early to invest
Till now, the property rights in Jammu and Kashmir, were only enjoyed by the permanent citizens of the state. Here on, ‘outsiders’ can also acquire property in the union territory of Jammu and Kashmir. However, at the very outset, it becomes important to warn potential buyers that it is too early to venture into this market. The best time to invest in Jammu and Kashmir, would be after the authorities make clear their plans and rules, with respect to buying and selling.
Speculation often leads to artificial price rise and this has already been witnessed in several parts. For example, when news surfaced that Shamshabad would be the site of the Hyderabad airport, speculative investors invested haphazardly in and around the location, expecting higher returns in future. Unfortunately, land prices remained muted, with none of the speculations coming true.
Property rights in Jammu and Kashmir
Article 35A was considered to be retrograde, as it did not confer upon Indian citizens (except permanent residents of Jammu and Kashmir) the right to acquire a property in the state, seek government jobs , or contest or vote in elections and seek public aid. Most importantly, it deterred private investments, shutting out job opportunities for many. In short, the closed economy that previously prevailed in Jammu and Kashmir, made little business sense. From here on, the rules may change to be more inclusive for all Indians.
- Inheritance rights of women who marry ‘outsiders’ (who are not permanent residents) are likely to be revised. Women can now own property and their children will have the right to inherit.
- The Real Estate (Regulation & Development) Act, 2016, applied to all Indian states, except Jammu and Kashmir. This is not true anymore. The state RERA may be amended, to make it more buyer-friendly.
- Property rates that so far stayed muted, because of restricted buying and selling may see appreciation. However, at this juncture, this is purely speculative. The government needs to come up with rules pertaining to local laws, before property transactions become common and smooth.
- Jammu and Kashmir relies heavily on tourism. However, there has been inadequate employment opportunities to boost the economy, leading to lack of skilled manpower. The investor’s summit being planned in Jammu and Kashmir in October 2019, may open up opportunities in the field of hospitality, pharmaceuticals, healthcare and agro-processing. Some experts maintian that a change in the administration, could boost the state’s economy and property market.