Real Estate & Construction Company Registration Guide
India's real estate sector is the second-largest employer after agriculture and contributes approximately 7-8% to the country's GDP. With rapid urbanization, growing middle class, and government initiatives like Housing for All, the sector presents significant opportunities for developers and investors.
This comprehensive guide covers the complete registration process for real estate companies in India, including RERA registration, project approvals, and compliance with the Real Estate (Regulation and Development) Act, 2016.
Industry Overview and Market Size
Market Statistics
- • Real estate market: $1 trillion by 2030
- • GDP contribution: 7-8%
- • Employment: 70+ million workers
- • Housing shortage: 10 million units
- • Commercial space demand: 40% CAGR
Growth Drivers
- • Urbanization (50% by 2030)
- • Nuclear family trend
- • Infrastructure development
- • FDI in construction (100% allowed)
- • Smart Cities Mission
Understanding RERA
The Real Estate (Regulation and Development) Act, 2016 (RERA) has transformed the real estate sector by bringing transparency, accountability, and efficiency. Every real estate project must be registered with the respective state RERA before any advertisement, marketing, or sale.
RERA Applicability
- • Projects >500 sqm plot area
- • Projects with 8+ apartments
- • All commercial projects
- • Ongoing projects (if not completed)
Key RERA Provisions
- • Separate escrow account for each project
- • Quarterly compliance filing
- • Standardized sale agreements
- • Penalty for delays
Step-by-Step Registration Process
Company Registration
Register as Private Limited Company for real estate development. Minimum authorized capital of ₹10 lakhs recommended. FDI up to 100% allowed through automatic route in construction development.
RERA Promoter Registration
Register as a promoter with the respective state RERA authority. Required before applying for project registration. Valid for all projects in the state for a specified period.
GST Registration
Mandatory GST registration for construction services. GST at 5% without ITC for affordable housing, 12% with ITC for commercial projects. Registration required in each state of operation.
Project Registration with RERA
Register each project separately with RERA before launch. Submit project details, layout plans, approvals, financial details, and timelines. Obtain RERA registration number for marketing.
Local Authority Approvals
Obtain building plan approval, layout approval, and commencement certificate from local municipal authority. Requirements vary by state and city development regulations.
Essential Licenses and Approvals
| Approval/License | Issuing Authority | Timeline | When Required |
|---|---|---|---|
| RERA Project Registration | State RERA Authority | 30-60 days | Before marketing/sale |
| Building Plan Approval | Local Municipal Body | 60-120 days | Before construction |
| Commencement Certificate | Local Authority | 30-60 days | Before construction starts |
| Fire NOC | State Fire Department | 30-60 days | Before occupancy |
| Occupancy Certificate | Local Authority | 30-45 days | Before possession |
| Environmental Clearance | State/SEIAA | 90-180 days | Large projects (>20,000 sqm) |
Taxation for Real Estate
GST on Real Estate
- • 5% without ITC: Affordable housing (up to 60 sqm carpet area, ₹45 lakh value)
- • 5% without ITC: Non-affordable residential projects
- • 12% with ITC: Commercial projects
- • Transfer of development rights: Exempt
Income Tax Benefits
- • Section 80-IBA: 100% deduction for affordable housing projects
- • Section 24: Interest deduction on home loans (₹2 lakh)
- • Section 80C: Principal repayment deduction (₹1.5 lakh)
Escrow Account and Fund Management
RERA mandates that 70% of the amounts realized from allottees must be deposited in a separate escrow account for each project. These funds can only be used for construction and land cost.
Escrow Account Requirements
- • 70% of collections to be deposited
- • Separate account for each project
- • Withdrawal based on architect certificate
- • Quarterly compliance filing
Permitted Uses
- • Land cost payment
- • Construction cost
- • Project-related expenses
- • No diversion to other projects
Government Schemes and Incentives
PMAY Subsidy
Pradhan Mantri Awas Yojana offers interest subsidy up to ₹2.67 lakh for affordable housing buyers. CLSS scheme boosts demand for affordable housing.
Smart Cities
100 smart cities mission creates opportunities for integrated townships, mixed-use developments, and infrastructure projects.
REITs
Real Estate Investment Trusts allow fractional ownership of commercial properties. Enables exit for developers and investment for retail investors.
Key Takeaways
Essential Registrations
- ✓ Private Limited Company registration
- ✓ RERA promoter registration
- ✓ Project registration with RERA
- ✓ GST registration for construction
Compliance Focus
- ✓ Escrow account maintenance
- • Quarterly RERA compliance filing
- ✓ Occupancy certificate before possession
- ✓ Standardized sale agreements