Decided to buy a home? Great! The next step is to decide whether you want to go with a ready-to-move or an under-construction property/ apartment. If we were to read into the current trend in the Indian real estate market, buying completed apartments would be the smarter option.
Here is why.
- Buying Under-Construction Property Might Cost More
By May 2017, the Indian Real Estate will have to abide by the Real Estate (Regulation and Development) Bill 2016 (RERA) guidelines, established by the respective States. Buying an under construction property this year will not safeguard a home buyer against the potential risk of inflated interest cost and the double whammy situation in case a project is delayed indefinitely. Also, the interest cost calculated during the construction phase is not deductible by tax and thus the financial impact on the home buyer would be much more severe.
The RERA, when it comes into force, will ensure that the home buyer is compensated for any delay and prices cannot be changed at will by the developers. If you wish to buy an under-construction property, wait till next year and buy a project that is registered under this Act.
- What You See Is What You Pay for in a Completed Apartment/ Property
If you are comparing between an under construction and a completed property in the same location and neighborhood, the finished project would most likely cost more. The reasons are obvious and so are the advantages. You pay for what you see and you will get to move in faster, thus saving money that would have otherwise gone for house rent.
Though at face value you might think the cost is more, it could be quite the contrary when you consider home loan interest and the inflation associated with an under-construction property.
- Tax Advantage of Buying a Ready-to-Move Apartment/ Property
It is easier to get tax deductions against a completed property. A first-time home buyer is eligible for a deduction of up to INR 2 lakh under Section 24(b) of the I-T Act for Self Occupied Property (in case of your second home, the entire interest payment can be deducted from the income that is earned from it). This is an advantage that you will miss with an under-construction property.
In the business of brick or mortar, the Real Estate (Regulation and Development) Bill 2016 (RERA) gives clarity and assurance to the home buyers. The RERA will ensure that developers won’t take potential buyers for a ride. It would also help real estate developers to have realistic targets and financial backing.
Fortius Infra has always been advocate of one of the guiding principles of RERA – and that is transparency. From the first stone laid, we have made sure that our stakeholders and buyers experience transparency and this has helped us achieve an ahead of time delivery.
We support RERA and will continue to deliver our best. Book a site visit to our completed project – Fortius Waterscape and explore some of our vaasthu compliant apartments.