[ecis2016.org] What would be the impact on the real estate market, if Aadhaar numbers were linked to property transactions? We look at what realty experts have to say, on this matter
After making it compulsory to link Aadhaar numbers with a large number of services and financial instruments, there have been sporadic reports that the government may also link property transactions with the unique ID. Union housing minister Hardeep Singh Puri, had earlier indicated that the linkage would happen. However, later on, he stated in the parliament that ‘there is no proposal to make Aadhaar mandatory for property transactions’. Nevertheless, the linking of property transactions with Aadhaar, if it were to happen, would have several implications on the real estate market.
You are reading: Linking of property transactions with Aadhaar: Impact analysis
Possible benefits of linking real estate transactions with Aadhaar
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“Riding on the back of the Real Estate (Regulation and Development) Act (RERA) that aims to provide relief from the opacity of the real estate sector, linking of Aadhaar with property transactions, could further boost transparency and provide clarity, in terms of land titles. Measures such as the RERA and demonetisation, coupled with the Undisclosed Foreign Income and Assets (Imposition of Tax) Bill, 2015 (popularly known as the Black Money Bill) and linking Aadhaar to property transactions, will significantly improve the confidence of investors and financial institutions, who treaded cautiously owing to a lack of transparency in this sector. It will increase the inflow of funds being invested and fuel more activities in the sector,” opines Samantak Das, chief economist and national director, research, Knight Frank India.
[ecis2016.org] Will Aadhaar linkage reduce benami property transactions?
Experts add that linking land titles to Aadhaar, can also mitigate issues of identity theft. Linking of Aadhaar will help weed out bogus, multiple ownership of land and pave the way towards clear title deeds. Encouraged by this greater transparency, insurers may begin rolling out products like land insurance.
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The government has repeatedly stated that it intends to go after benami properties, points out Ramesh Nair, CEO and country head, JLL India. “By linking buyers’ Aadhaar numbers with property transactions, the last avenue of funnelling black money into real estate, will be closed down. While it is true that such a move will prolong the recovery of the real estate sector, there is no doubt that it will improve transparency, while also creating a comprehensive database of real estate assets for the government,” Nair explains.
Linking of Aadhaar with property transactions: Can it be a fool-proof system?
Recently, there has been several cases, which have led to questions being raised over the security of the Aadhaar database. In such a scenario, it may be a tough task for the government, to ensure that linking of Aadhaar with property transaction, will give the desired results. Moreover, there are many ancestral properties, for which the ownership documents are not clear. These are some of the grey areas that the government would need to address, to ensure a fool-proof system. If the government does go ahead with linking property transactions with Aadhaar numbers, it could also consider incentivising such transactions, as this would provide some benefit to property buyers.
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