If you are planning to invest your savings in the Properties dealing. Or want to invest in under-construction flats, either buying a Resale House. With various options to choose from, you might be confused about what to buy, ready to move flats, under construction, or resale house?
Real estate markets are growing rapidly day by day. Because it has been the best idea for investing your money where you could have the returns in the upcoming future.
Though the price of the land and property are rising day by day. In spite of this, the Government is also making an effort for every civilian who is planning to buy a house. Because of high rates in Real estate markets, all cannot afford to buy one.
This idea of government is helping India to grow economically more. The target of the Government is not rich people but also middle-class families. The idea is making Real estate easily targetable investing platform. The increasing number of options confuses us about what to buy, ready to move flats, under construction, or resale house?
In this article, we have come with a guide to find out what to buy, ready to move flats, under construction, or resale house?
These following guidelines will help you to decide between the Ready to move flats and Under Construction Properties and Resale House. Both Pros and Cons are mentioned below. Therefore you can see both sides of the coins. This will help you in making a clear better decision.
1. Ready to move flats vs under-construction flats
When it comes to investment in property. We come across countless confusion. What to buy? Which property is better for investment purposes? We mainly confuse between ready to move vs under construction flat. Let us know what will be best.
Ready to Move Flats are the Flats that are already made by the Constructions Companies. Though the time of Under Constructions, Flats are sold in advance. But sometimes some flats might not get sold. There is a possibility of the owner of that particular flats wants to sell the flats. That flat includes in Ready to Move Flats. Some Pros and Cons are given below of Ready to Move Flats.
Strength & weakness of Ready to Move Flats
Strength of ready to move flats
Ready to Move Flats are of two basic types of Apartments. One is fully furnished Apartments and the other is Semi-Furnished Apartments. According to your preferences, you can choose any of the types.
Fully Furnished Apartments has done with Interiors and Modified Kitchens and Bathrooms. You just have to bring your stuff and make yourself adjusted. Semi Furnishes Apartments are vacant flats. In this, you have to bring your furniture, etc with your regular stuff.
Ready to Move Flats in which you go for a site visit where you actually see the final results of your dream home. This has always been a nice idea for the person who is shifting in new cities, within a month or a couple of months.
Ready to Move Flats in which you visited a few Apartments, and then you find the perfect one for you. After finalizing you go for the next process i.e. the Payments and Documentations work. And at the time the home will be yours, this saves so much time.
Ready to Move Flats are also Exempted from Goods and Service Tax (GST). From 1st April 2019, GST Rates on Affordable Housing has been decreased from 8% to 1%, with No ITC.
The weakness of ready to move flats
Ready to Move Flats are always 20-30 percent higher than the under-construction Properties. You have to pay extra from your pocket as compared to under constructed properties.
In Ready to Move Flats, you are getting the final product. But you are not able to inspect the quality of the material used in building your house. Homes that are offered to you might have some drawbacks because you do not know when these properties have been made.
2. Under Construction Properties
Under Construction Property are the work-in-process of the Apartments or flats. This means constructions have been started but the full work has not completed.
The positive side of under constructions properties :
Now there is a question arising in every mind, what if the project not completed within the given time period. The answer to this is, with the implementation of the RERA Act. Real estate projects completed within the given time period is mandatory.
Here are the next benefits of Under Construction Property. The day property is constructed to the time it is completed so the value of the property continues to be increasing. Therefore the day you invest in Under Construction Property you started getting the higher returns.
In the Under Construction Property, you have to pay only 10 to 15% of the total cost of your property. The other benefit you get is you have got more time to pay the remaining amounts.
What about the GST of residential property?
GST Rates on Under Construction Residential Properties has decreased from 12% to 5% with no ITC for new projects. And 12% to 8% with ongoing projects on or before 31st March 2019 with ITC.
Ongoing Projects before 31st march 2019 has both the options with them either they choose the benefits of 12% to 5% without ITC or 12% to 8% with ITC.
For the ongoing projects this new GST rates where the supply of services involves the transfer of land or undivided share of land. Charges that are included for Residential Apartments (CGST 0.5% plus SGST/UTGST 0.5% ) total 1% or IGST 1% without ITC.
New GST Rates where the supply of services does not involve the transfer of land or undivided shares of land. And the charges are not included. The amount charged to customers will be:
CGST 0.75% plus SGST/ UTGST 0.75% (total 1.75%) or IGST 1.5% without ITC for affordable Residential Apartments.
Affordable residential Apartments means Apartments have Carpet Area not exceeding the following :
- In metro cities, the Carpet Area of Residential Apartments must be 60 square meters or below it.
- In Nonmetro cities, the carpet Area of Residential Apartments must be 90 square meters or below it.
- For which gross amount charged in not more than Rs 45 lakhs.
The negative side of Under-construction property
Under Construction Property also applicable for 12% of Goods and Service Tax. At the time of purchasing if no completion certificate has issued. Then the customers should also pay the Stamp Duty and Registration charges separately. This will result in heavy expenses on Tax.
If the Builders get the Commencement Certificate to start the Project from the Department of Authority still there is a lot of permission needed from regulatory departments.
In case any documents left to be fulfilled, buyers will have to pay the unnecessary cost and also lead to not receiving the occupancy certificate.
Resale House is the easiest way to invest in Property. And it is also cheaper than the Ready to Move Flats and Under construction Properties. Because this kind of property is available everywhere all over the world.
You can get negotiate if you want to with the owner of the property. Let’s see what are the Pros and Cons we are having in the Resale Houses.
Here are some Pros and Cons of Resale House:
Pros: A Resale Property is one of the cheapest options in the market. You get to buy the house at a discounted price as compared to Ready to Move Flats and Under Construction Property. People buy a Resale house along with the land because you get the benefit of living in a developed location.
Like basic amenities, such as electrical wiring, phone connection, gas connection, done with interiors, fully furnished home, modular kitchens and bathrooms, lighting, water supply, etc.
You may require a few renovation and interiors and decorations of your choice in the house. A second-hand home also shares a lot of tax benefits right from the first month of your home loan installment.
Cons: The Resale house was constructed a decade ago which is not advisable. Therefore you should check the age of the Resale House first. The Paperwork of the Resale House may not be clear.
Because in India, some people might not keep the documents properly which might lead to possession of the property back in the future by any of the family members from whom you purchased the house.
You must also check the tax bills. Before you buy the Resale House all dues related to the house should be cleared.