Factors to Consider before buying a Plot
Looking for healthy returns on investment? It is a well-known fact that plots & lands score better over other property types like flats in terms of returns over investment said a person from Subha Gruha Real Estate who doesn't want to reveal his name. If you could manage to strike a fair or rather ‘safe’ deal, buying a plot with a real estate company, it could be a rewarding purchase considering that rising prices in real estate segment especially near Vijayawada, Hyderabad and Visakhapatnam, says person who isn't interested to say his name from Subha Gruha Real Estates.
But before you take final step in, there are some important factors you must consider to ensure that you are dealing with the right Real Estate company and investing in a plot approved by the city planning departments.
Key points you must check before purchasing a plot:
Location: Determining the location of the plot is important, considering its proximity to the city locations you travel frequently is very important. Don't buy just because it's less priced land.
Real value of land: Don't rush blindly in to buy a plot that seems to be cheaper one for you, I would advise that do a little research and consult a real estate expert to determine the exact value of the plot. Negotiate with the Real Estate company after all the initial checks on the price.
Size of the Plot: If you are buying plot for the purpose of living at a later stage, understand your requirement first. Ensure that how much land (built-up-area) you would need to build your dream house. Another two vital factors to consider are Topography and SSoil.
Verify the 'Title Deed': Check whether the Real Estate has a right over property or not. The first step is to see the 'Title Deed' of the land you are going to purchase. Confirm whether the land is in the name of Real Estate company and have full right to sell the land and no other persons are involved. It is recommended to get the original deed examined by a reputed lawyer.
Approvals by Local Body: Verify if the venture has been approved by the City Development Corporation and the local body or not. Ask for the approval documents and if possible get it verified by a lawyer.
Release Certificate: In certain cases, the land may have been pledged to obtain a bank loan either by the Real Estate company or someone else. In such cases, you will have to get a release certificate from the bank, which ensures that the loan on the land has repaid completely. Do take the certificate from all the people involved if the land has more than one owner
Tax Receipts & Bills: To free yourself from any taxation issues in future, I recommend that you ask the Real Estate company for previous tax receipts that they may have paid in past along with other bills related to the plot you are buying. These receipts will ensure that, you don’t have any taxation-related issues of the Real Estate company.
Verify the land-use: It is important to verify the land-use zone as per your city master plan. You can get the master plan from the local body office in respective city.
Check this while registering your plot
When you have finally selected the plot to buy, you need to register the same with the authority concerned. Once a plot is registered on your name, you are the lawful owner of the premise and is fully responsible for it. Through registration of Sale deed, a person is able to acquire the rights of the property from the date of execution of the deed.
Loans for buying Plots
Financial Institutions and Banks offer “Land Loan” or “Land Purchase Loan”. Land loan is a financing option that is meant to be used just and only for the purchase of land. Banks usually insist that the land you are buying, whether for your house or for commercial use, should be should be a legally safe land.
Tax benefits on a Land Loans
One thing that you should remember is that, there are no tax sops if you borrow loan to buy a plot. Normally, lending institutions will up-to 60-70 per cent of the total cost, and the remaining has to come from your sources.
However, if you build a house on that plot, you will be eligible for both Land oan and Home construction loan. Land loan is for buying a plot, while Home construction loan for construction of House on the plot.
The tax deductions will be applicable only in the year which the construction is completed. In that particular year interest on Land Loan as well as the construction loan till the end of the previous year shall be taken together and one-fifth of this cumulative interest plus the interest payable for the specific year will be eligible for deduction. The principal repayment you make on your home loan is also eligible for income deduction under Section 80C.
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