While buying a property,
there are several questions that crosses every home buyer’s mind. And at which
construction stage to buying Property for sale in
Bangalore is just one of them. Before we begin, let us tell you that there
are three major stages at which you can buy a property.
These include
pre-launch, under-construction and ready-to-move-in. While, today, majority of
the buyers prefer ready-to-move-in properties, there are still a few who invests
at under-construction stage to gain monetary benefits.
Thus, here are a few more
reasons that are most likely to motivate you to buy a property at this stage.
● Monetary
Benefits:
Under-construction
property, in most of the cases, is relatively affordable when compared to
ready-to-move-in property. While buying, you will have to pay the booking
amount that is generally 20 per cent of the total property cost and rest can be
paid in installments.
● More Options to Select From: In addition to the cost benefit,
under-construction properties also lets you select the floor and unit of your
choice.
● A
good bet for Investors: Since prices are relatively less,
one can fetch decent returns on investment.
● Scope
for Customization: At this stage, there are a
few developers who allow customisation (to some extent) as per buyer’s requirements.
● Flexibility
in Payment: In under-construction stage, usually a buyer gets a plethora of
payment plan options. The popular ones include construction-linked plan, down
payment plan, 30:70 scheme, 20:80 scheme, to name a few.
While there are several
pros of buying an under-construction property, it is advisable to
look at the cons as well.
● Delayed
Possession: The problem of delayed possession has marred the real estate sector adversely.
Hence, this is the biggest risk while investing at under-construction stage. And
it can be really troublesome if you have opted for the home loan route as you
will end up paying rent as well as EMIs, which can impact your financial
situation. Moreover, in case of delayed possession, you should also
be prepared for paying the EMIs without tax redemption.
● Additional
Taxes:
Service tax and VAT are two
taxes that you need to pay while buying an under-construction property. For properties
valued below Rs 1 crore, the effective rate of service tax comes up to 3.50 per
cent (14 per cent on 25 per cent of property value), while for properties
valued above Rs 1 crore, it is 4.2 per cent (14 per cent on 30 per cent of
property value).
VAT, on the other hand, varies from city to city. For
instance, VAT is charged at around 5.5 per cent in Bangalore. However, if you are
looking to buy a flat in Noida,
Chennai or Kolkata, there is no VAT applicable.
● Exit
Clauses: Developers usually have certain clauses
pertaining to the exit. For instance, there could be a clause of no exit for a
certain period or even if it is there, you will have to pay the transfer
charges that could be very high.
