To own and live in their home is every person’s dream. Indian families generally believed “blessed are those who have the security of a roof over their heads”. Once you are in a position to buy a house, the options available to you (if you are the end user) include buying a ready to move in house, or to buy a piece of land and construct on your own, or to invest in a under-construction home offered by a developer.
Ready to move in homes are flats, bungalows or villas, which have all construction completed and where you can move in to reside immediately if it suits your purpose. This article reflects on reasons one can consider ready to move in homes.
The Time factor – Chances of delays in possession of the property due to economic, legal or other factors are eliminated when buying a ready to move in home.
The Cost factor – On the face of it, a ready to move home costs more than an under-construction one. Since there is less risk involved in ready to move in property, a buyer will always have to pay a higher premium. If you go for an under-construction home, you often end up staying on rent at a different place, which is a significant expense. In addition to it, the mortgage taken to purchase the home has a running interest payment which is made every month to the bank. This adds to costs of home purchase. At times the load of paying rent and interest together can be challenging for a few people.
No legal hassles or other unanticipated factors – With a ready to move in home, you have all the formalities complete along with the certificates in place, assuring you all checks have been concluded. RERA (Real Estate Regulatory Authority) is also going to be a big factor in making sure the process is easy and more transparent.
The Quality factor – For a home buyer looking for their dream home, the quality of the home is of utmost importance and with good reason. With a ready to move home, the key takeaway is ‘what you see is what you get’.
Lower Tax burden while purchasing a home – For a ready to move home, the stamp duty and registration charges are a necessity while you’re exempted from paying GST, as the home is already completed.
‘The schedule of GST rates for services as approved by the GST Council said that the “construction of a complex, building, civil structure or a part thereof, intended for sale to a buyer, wholly or partly. The value of land is included in the amount charged from the service recipient.” These will be taxed at 12 percent with full input tax credit. What this means is that from July 1, GST would be applicable on under construction properties at the rate of 12 percent but not on completed, ready-to-move-in apartments. Real estate experts say that stamp duty and property taxes may continue to be levied on immovable properties.’*
Personal Tax Saving on a ready to move home – Most home buyers avail of home loans for a purchase. For a ready to move in home, the tax benefits from a home loan payment are aplenty. A home buyer is entitled to claim a deduction from their income of up to Rs. 1.5 lakh on the principal under Section 80C of the Income Tax Act and an additional deduction of up to Rs. 2 lakh on the interest component of the home loan, under Section 24B.
Better infrastructure – The decision of purchasing a home does not depend on the home or the society it is in alone, but also needs to take into account whether the location is well-connected and has the necessary social and physical infrastructure such as good roads, educational institutions, malls/shopping centres, hospitals etc. nearby.
A ready to move in home will usually be in a completed project and this alone ensures that not only will road connectivity be taken care of already, many service providers will also have set up their establishments to serve the new residents. One can cite the development of areas such as Powai in Mumbai, Airoli in Navi Mumbai and Baner in Pune as examples of the well-planned properties/projects.
Rental income potential– Investors generally buy houses with an aim of earning rental income or to re-sell them at a profit. Buying a property that is ‘ready to move in’ helps in starting the process of income generation through rentals immediately.
Buying a ready to move in house helps you inspect what you are buying. The living spaces are there for you to see, how it looks and how good is the construction, the size of rooms, how open and well lit are the rooms, how big is the kitchen, the quality of the fittings, the flooring, what are the amenities and common facilities provided by the developer and you can fairly visualize how well it accomplishes and satisfies your own requirements.