5 tips for buying property that’s a 'solid investment'

October, 2018

When buying a property, you may only be concerned about your immediate property needs, but experts say you should also "buy with the future in mind".

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1. Consider the neighbourhood

While you may enjoy a neighbourhood with a great nightlife at the moment, your priorities can change quickly. If you are planning to start a family, for instance, the neighbourhood you invest in should be a practical choice with regard to good schools, medical facilities, etc.

Factors like security and resale value of property are also very important considerations when deciding where to invest.

2. Size of the home

Once again, if you are planning a family, or on extending your family, consider the size of the home, the amount of bedrooms and bathrooms and also a garden where children can play.

3. Consider the level of renovation needed

If you are buying a ‘fixer-upper’ you need to carefully determine how much it will cost you - will you be able to afford all the renovations? And the time factor - do you have a very demanding job that won’t allow you to do DIY over weekends?

Sometimes it’s better to invest in a turnkey development, even if it’s more expensive initially, depending on your circumstances.

4. Consider the price of the home

While you may be in a good financial position at the moment, will you still be able to service the bond if there is an interest rate hike or if something unforeseen happens, like retrenchment? Sometimes it’s better to be realistic than optimistic.

5. Good rental demand in the area

If you had to relocate for any reason in the future it may not necessarily be a favourable time to sell your home (depending on the market), and then you may need to rent your property out.

Is there a good rental demand in the area, or can tenants pick and choose? This could result in a vacant property and loss of income. Also determine the rental rates in the area, will you still be able to service the bond with the rental income you receive?

Also read: Benefits of buying a home in the wife’s name 

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Source: housing.com

Benefits of buying a home in the wife’s name

October, 2018

With several states in India offering benefits for women property buyers to boost their empowerment, we examine why it makes financial sense to register a property in a woman’s name

There are several benefits to buying a property in a woman’s name, either as the sole owner or as a joint owner, with governments and banks offering several sops.

“Aspiring home buyers can seek certain benefits including tax exemptions if a home is bought in a woman’s name. Such offers can also attract more women buyers to the realty sector,” points out Ashok Mohanani, CMD, Ekta World. Encouraging women to register assets in their name, also boosts women’s empowerment, he adds.

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Tax benefits

Experts explain that some of the obvious tax benefits of buying a home in the wife’s name, include an extra deduction of interest up to Rs 1.5 lakh every financial year, if the house is self-occupied. If a husband and wife are the joint owners of a property and if the wife has a separate source of income, then they can both claim tax deductions individually. The tax benefit will depend on the ownership share of each co-owner.

Discount on stamp duty charges

Several state governments in north India are now offering a partial waiver on stamp duty, for buyers registering properties in a woman’s name – either as a sole owner or as a joint owner.

“You can save 1%-2% on stamp duty, if the property is in a lady’s name. In Delhi, the stamp duty rate is 4% for women, compared to 6% for men. Moreover, if you are undergoing some financial setback and have some debts to repay, the property held in your wife’s name, does not come under the cover for your loss,” points out Sushil Raheja, CEO of Raheja Homes Builders & Developers..

Stamp duty charges for Women Vs Men

State/UT	For Women	For Men
Delhi	4%	6%
Haryanat	4% in rural areas and 6% in urban areas	6% in rural areas and 8% in urban areas
Rajasthan	4%*	5%

* As 1% rebate over normal rate

Discount on home loan interest rates

Many banks like SBI, ICICI and HDFC Bank, offer discounted rates on home loans for women borrowers. The prevailing interest rates for women borrowers are as mentioned below:

Interest rate for woman borrower Vs others

Bank	Interest for Women borrower	Interest Rate for others
SBI	8.35 – 8.85%	8.4 – 8.95%
ICICI	8.35 – 8.7%	8.4 – 8.85%
HDFC Ltd	8.35 – 9.05%	8.4 – 9.05%

Note: Rate as on June 20, 2018 (For loan amount < Rs one crore)

Things to keep in mind when buying a home in the wife’s name

Experts maintain that it is a good idea to buy a home in the name of one’s wife or in co-ownership. However, the wife can enjoy the tax benefit, only if she has a separate and genuine source of income. Moreover, if there is any legal dispute on the property, then both, the husband and wife, will be involved in the case. Therefore, home buyers should evaluate all possibilities, before making a final decision.

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Source: housing.com

Why is it advisable to take a legal opinion while buying a property...

We look at the importance of legal assistance during a property purchase and how it can help home buyers, not only to guard against defects but also save money in the transaction

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Buying a property is not just about paying the money and taking possession of the unit. The process and the documentation involved in the transaction, is complicated and is often beyond the comprehension of a layman. Moreover, not everyone will be conversant with the various laws, relating to acquisition of property. As you are putting your life savings in buying the property, you should take legal opinion for the process, to safeguard your interest.

Importance of title and marketability of the property

It is very important for the buyer to verify that the seller has a good title in the property. The matter of title is so complicated that the real estate regulations require a developer to buy a title insurance, with respect to the property that he is developing, in order to secure the buyers against any claim or defect in the title of the property. Defects in the title may be in the form of the legal status/nature of the land on which the property has been constructed or existing easement rights on the property which one would not know, unless a detailed investigation is carried out. In case the property has been mortgaged by depositing the original documents, a buyer may not know if the original documents have been handed over to him, as it is not difficult for people to get copies of documents made in such a way that they look like the original.

To avoid any litigation with respect to the property which you are buying, it is important to ascertain whether the developer has duly complied with all the laws and procedures, related to the construction of the property. There are many properties that have not received occupancy certificates, due to non-compliance of some condition imposed at the time of obtaining approvals for the plan from the local authorities.

Real estate purchase agreement and other documents

Buying a property involves studying various documents, as well as preparing many documents. Only a person who is trained to interpret legal documents, can help the buyer to identify any restrictive clause in the agreements of earlier purchasers. This may be in relation to the land, as the property may have been constructed on a freehold land, where the absolute title is transferred to the buyer. The land may have also been acquired under a lease, where the ownership of the land eventually passes on to the original owner, at the end of the tenure of the lease.

A majority of property buyers do not take the help of lawyers for drafting of the purchase agreement and instead, ask the broker to help them get the agreement done. The brokers, in most of the cases, have a standard agreement, in which they merely replace the details of the property and the buyer and seller. They seldom realise that there may be special circumstances, which warrant that the agreement should be drafted on some specific lines – for example, when the property is sold by a legal heir or an executor of a will.

In case you are taking a home loan, a legal scrutiny of the agreement may help you understand the conditions, under which you are taking the home loan. These may include clauses pertaining to charges for prepayment or transfer of the home loan, charges for shifting of the home loan from floating to fixed rate and vice-versa, or the circumstances under which the lender can take possession of the property.

Stamp duty and income tax implications of property purchase

For all transactions of immovable property, the purchaser has to pay stamp duty on the market value of the property. Every state has its own stamp duty ready reckoner rate, popularly known as circle rate. The rates specified in the stamp duty reckoner, are the base rate at which stamp duty for a property has to be paid. Nevertheless, certain deductions are allowed from the market value, based on the age of the property, whether it is on leasehold land or freehold land, etc. Likewise, deductions are also allowed, in case the building does not have a lift. A lawyer is in a better position to guide you on such matters, to ensure that you do not land up paying higher stamp duty, than what is legitimately due for such transactions.

As per Section 50C of the Income Tax Act, where the stamp duty ready reckoner valuation is higher than the agreement value, the seller is presumed to have received the consideration as stated in the stamp duty ready reckoner and is required to pay capital gains tax accordingly, unless the difference is not more than five per cent over the agreement value. Likewise, the buyer is also required to pay tax under Section 56 (2) (x) on the difference, which is higher of Rs 50,000 or 105 per cent of the agreement value and stamp duty valuation.

Only a person, who knows all the laws pertaining to purchase of property, can help you save money, as well as safeguard your interest in the property. Ideally, property seekers should appoint a firm of solicitors, rather than just a lawyer. The one or two per cent of the cost of the property that you spend towards this, will help you take the right decisions while purchasing a property.

Also read: Things To Know Before Buying New Property 

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Source: housing.com

Reasons to buy property during Navratri

Navratri is an auspicious occasion worshiping nine incarnations of goddess Durga for nine days. So, for these nine days we give you nine-bangon-reasons to invest in real estate!

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Shubh mahurat

Festivals are always a shubh mahurat for major decision making, especially financial ones. People find it sacred and auspicious to make an expensive purchase during Navratri with the belief that it would appreciate in value.

Big discounts

Many builders offer big discounts during this time. Given the high levels of inventory in the market right now, builders are looking for such festive seasons by giving attractive offers.

Building relations

Investing in real estate is a onetime wise call and a lifetime of good returns. It is an active future planning for yourself and your family. On the other hand, it is important for the developers to build a relation which would last long rather than project based communication.

Safe investment

Real estate is a safe field to invest in and secure your money. Thanks to RERA as it protects homebuyers and investors rights, it proves to be your guardian for real estate investment.

Loan rate advantage

Banks and financial institutions offer reduction in home loan rates during Navratri. Some of them waive of processing and administrative charges as well. The loan schemes are convenient, the ticket size is higher with low EMIs and the tenure is also longer.

Tax saving

Deduction under Section 80C of the Income tax Act is available for investment in house property. There is a dual benefit in case of investment in house property by availing a loan.

Better options

Due to the multiple options and offers provided by the developers, which in turn increases the demand during festivals, buyers have the upper hand. They get the platform to compare not just the projects, but also schemes and prices and negotiate according to their budget.

Faster closings

Developers would want to close deals and record their sales before the end of quarter. Hence, the chances of bargaining and getting a better deal is high.

Future happiness

With all the benefits, either buying a new home and gift a new space to your family or investing for a passive income and future planning, this will add happiness in your life and give you another reason to celebrate it with your loved ones!

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Source: magicbricks.com