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An agreement between a landowner and a real estate developer to build new projects is called the Joint Development Agreement. In a common development of the capital, the owner carries out construction and legal work, while the owner of the land makes the land available. There are two types of JDA. They are as follows: Thus, the land is taken care of by the owner of the land and the construction costs are borne by the developer. Depending on the terms agreed between them, the owner of the land may be in return, either as a lump sum, as a percentage of the revenue, or as a percentage of the construction area of the project. In this way, the resources and efforts of landowners and developers will be pooled to achieve maximum productive results. However, as with every business transaction, there are different ifs and “buts” that are related to a JDA. The development of real estate is subject to the approval of various public authorities, on the basis of which the examination under a JDA also depends on these authorizations. As things are not yet clear, the owner is expected to assess and pay the tax debt.

Is it fair if the owner is not even sure that the agreement is made or cancelled? Under the Income Tax Act, income is taxable on the delimitation of entry, depending on the previous date. However, if the right of the owners to the consideration depends on obtaining the necessary authorizations and authorizations for the development of the property, the income can at best be characterized as hypothetical income and therefore cannot be taxed on the principle of the exercise. This is important because these authorizations do not necessarily have to be introduced and can lead to a situation in which the JDA fails. It is all the more important to approve the terms of the CCM after a thorough analysis. The tax debt law resulting from the signing of a JaDa is now clear and the Court`s decision makes it easier for homeowners to judge their tax debt. It is quite normal for the owner of the property to transfer the rights/titles of the property to his family member as part of the family subdivision. These transfers are executed by GPA.

Posted on April 10th, 2021 | filed under Uncategorized |

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