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Know more about Income from House Property and the Laws that Govern it 

Posted on by HomeCapital Team

Everybody dreams of owning a house someday. Although it is a big and celebratory step, you must also bear the responsibilities that come with it. One of the primary responsibilities includes paying house property taxes every year. This guide offers detailed insights on income from house property, how to compute your actual income after tax and other deductions, saving tax on home loan interest and so on. Keep reading to know more.   

What does income from house property mean?   

As per the Income Tax Act, the income of an individual obtained from multiple sources is divided to simplify the tax calculation process. Income from house property is included among these sectors.   

As the name suggests, income from house property refers to the money earned by property ownership. For example, if a taxpayer has their own house and rents it to someone else, the rent amount, after tax and other deductions, is the income earned.   

Properties whose income is taxable include both residential and commercial buildings. It could be your house, office, shop or building. The only difference is that if it is a residential property, the tax is a part of income from the house property.   

On the contrary, if it is a commercial plot used for business purposes, then the tax falls under income from business or profession.   

Taxability conditions for Income from house property    

The income from house property adds up to your Gross Total income under the following three criteria.  

  • You own the property  
  • Property constitutes buildings as well as lands.   
  • Buildings can include residential houses, offices, shops, factory buildings and so on.  
  • The owner can use the property for any purpose except professional or business work.   

Follow these steps to calculate Income from house property    

We have prepared a sequenced list to compute the income from house property. Keep reading to know more.   

  1. Calculate the Gross Annual Value or GAV of your house property: If a house is self-occupied, the net GAV is zero. However, if you rent out your residential space, the gross annual value amounts to the rent collected from the tenant.   
  1. Deduct Property Tax from GAV: You need to pay the property tax, which is a certain percentage of the GAV as per the Income Tax Act.  
  1. Calculate Net Annual Value: Net Annual Value or NAV is the amount left after deducting the Property Tax from the Gross Annual Value (GAV).   
  1. A standard deduction on NAV: As per Section 24 of the Income Tax Act, a 30% deduction is carried out from the NAV. This section also states that carrying out repairs, painting or something else cannot be charged beyond thirty percent.   
  1. Low home loan interest: Section 24 of the Income Tax Act also allows for a deduction on the interest amount paid each year when one has opted for a home loan.   

After all these deductions, the remaining value is your actual income from the house property. Apart from this, you have to pay taxes on your complete income as per the specific slab rate.    

Please note that if you rent out your property, make sure its rental value is either equal to or higher than a reasonable amount as decided by the municipality.   

Important terminologies      

  • Municipal value: The respective municipal authorities determine a reasonable property value that is subject to municipal taxes. This is called Municipal value.   
  • Standard rent: There is a fixed rent amount as per the Rent Control Act. The property owner cannot impose a higher rent than the standard one in this Act.   
  • Fair rent: If there is a property in the same locality with similar features or amenities, a fair rent amount is charged.   
  • Net Annual Value: Net Annual Value or NAV is the amount left after the Municipal taxes are deducted from the Gross Annual value.   

Ways to lower taxes on Income from house property     

We understand that taxable deductions on property income can be very inconvenient to the owner. However, you do not need to worry as you can actually save on taxes imposed with the help of effective strategies, some of which are listed below:   

  • Own a property with someone else: If you opt for a home loan with another person such as your spouse, the tax amount will be significantly reduced due to tax exemption that can be availed of by both parties.   
  • Renting out vacant properties: Please note that if you have houses or property that are vacant, it is still subject to taxation as per the fair rental value. Thus, we recommend that you rent out such empty spaces or properties that will help eliminate losses and bring more income.   
  • Different ownership: If a property is already registered in your name, it is a better alternative to register a different owner such as your spouse or relative for another property. This will help avoid heavy taxation.   

Wrapping up  

You need to have complete knowledge of property income and tax deductions to make informed investment decisions. If you implement the strategies mentioned above, you can reap maximum benefits while limiting the taxation amount. 

The Subvention Scheme – Everything you need to know 

Posted on by HomeCapital Team

Marketing and promotion are essential for real estate developments, just as they are for everything else in the world. In order for real estate developers to be successful in selling their properties, they often need to devise a variety of marketing strategies and special deals in order to pique consumer interest and boost sales. Among the different marketing strategies, a subvention scheme is a typical incentive provided by developers of large-scale properties in the pre-construction phase. In the following paragraphs, we will go over all there is to know about the subvention scheme. 

What is a Subvention Scheme?  

Buyers, developers, and financial institutions all work together in a subvention scheme to facilitate the acquisition of a unit in a development project. A buyer makes a down payment ranging from 5% to 20% of the property’s value under the subvention scheme.  

The remaining funds are disbursed by the bank to the builder in instalments. In exchange, the developer is responsible for paying any interest that accrues on the unfinished portion of the loan until the development is finished.  

After they have taken full ownership of the home, the purchasers are responsible for paying the interest on the loan. During this time, the cash is sent swiftly from the bank to the developer in order to speed up the building process. 

Why is the subvention scheme alluring? 

A large number of renters are enthusiastic about the subvention scheme. Due to the fact that this strategy only requires the purchasers to commit a portion of the entire liability, the interest charged on loan does not have to be paid before the buyers take custody of the home.  

This buys them some financial breathing room as the project keeps moving forward. Subsidy payments are deferred until the end of the subvention term, after which the borrowers must begin making payments on the principal using EMIs. 

If the project is delayed and the subvention scheme is used, the developer would end up paying more since they are obligated to keep paying the bank interest. It will undoubtedly cause a delay in the customer paying the remaining balance amount owed. With the bank’s loan amount, the building project can proceed without a hitch, proving the validity of the ‘buy now, pay later’ adage. 

Advantages of subvention scheme 

1. Exemption from interest payments until possession 

Home purchasers may be exempt from paying interest on the portion of the loan that isn’t disbursed until the time that they take ownership of the property. This is especially helpful in the situation when a person is responsible for paying the lease and has reserved a property that is still under development. 

2. Home buyers would not be affected by construction delays 

Since the developers are responsible for paying the interest owed on the loan until the date of ownership, any delays in the possession of the project won’t put the house buyer under any additional financial strain. 

3. Develops a feeling of discipline among developers 

In the real estate industry, delays in projects may be quite frustrating for the purchasers. Due to RERA, there is a law governing this field. Discipline is induced when purchasing programmes are allowed under subvention since any delays in the projects would need additional interest payments from the purchaser. 

Drawbacks of the Scheme 

1. Credit ratings may take a hit 

As is customary in the real estate market, the loan agreement for a subvention scheme is drafted by the borrower and the lender. Simply, the developer agrees to cover interest payments for a certain time frame. But if the builder doesn’t pay interest, the buyer is on the hook for it. Further, the buyer will be blacklisted if there are any defaults. 

2. The price of the project is higher in the subvention scheme

Customers appreciate developers’ willingness to cover interest payments throughout the term, but builders often include such payments into the project’s overall budget. As a result, contrasting the prices of homes with the prices of properties under the subvention scheme is a wise idea. 

3. Carelessness about the agreement 

There is a lack of interest in reading the whole loan agreement. Interest may be pledged to be paid until ownership, yet a different time frame may appear in the written component. A homebuyer who doesn’t consider these points may end up costing them money. 

Considerations Regarding Subvention Scheme 

Before deciding to go on with a subvention plan, there is a series of preventative actions that you need to do, and they are as follows: 

  • Before signing an agreement and paying the booking cost for a house purchased via a subvention scheme, it is imperative that you read all of the conditions of the agreement. 
  • Investigate the developer’s ability to meet their obligations financially. Avoid working with developers that have a large amount of debt or who are in danger of going bankrupt. 
  • Check the developer’s history to see whether they have a good track record of delivering their projects on schedule. 
  • Verify the developer’s standing, and see if there are any complaints lodged against them. 
  • Before agreeing to a pre-EMI payment plan, compare the developer’s interest rate to the bank’s. 
  • Make sure that the EMI moratorium lasts until you take ownership of the property, and not just the first two or three years as advertised. The pre-EMI is due to the bank within a certain time frame after the possession delay has occurred. 
  • Do not invest in such plans unless the developer has proven experience. 

Conclusion  

It’s possible that a subvention scheme would be beneficial, particularly for first-time homebuyers; nevertheless, it’s important to ensure that the venture is supported by well-known developers and that the agreement doesn’t include any secret terms. If you want to prevent any complications as a buyer, you should ensure that you are familiar with the scheme and any connected documentation. Before you sign any paperwork, you should discuss any questions or concerns you have with the builder or developer. 

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Society Maintenance Charges that Buyers need to be aware of 

Posted on by HomeCapital Team

Ownership of one’s home is a source of great pride, but it also entails a long-term financial commitment in the form of monthly mortgage payments or charges to a housing association. It’s important to remember that this isn’t something to worry about but rather an investment in a more pleasant and helpful way of life.  In spite of what you may have read elsewhere, we can tell you that maintenance fees are not only straightforward but also generally reasonable and legal. Let’s take a look at the different types of society maintenance charges and how they are calculated. 

Society maintenance charges types 

Society maintenance charges may be broken down into the following types. It’s important to remember that the regulations only give general guidelines. The exact amount of society maintenance charges that each member must pay is calculated by each society using its own unique method.  

Charges for repairs and upkeep 

Expenses for services and facilities, such as energy for shared spaces, security guards, elevator operators, housekeepers, and gardeners, are included. All members are expected to contribute equally to the cost of services. 

Costs associated with repairing and maintaining the building, including but not limited to the structure itself, its plumbing, electrical systems, elevators, storage tanks, power supplies, lighting, and security systems.  

The annual society maintenance charges is a percentage of the original cost of building each unit, with a floor set by the board of directors of the society at no less than 0.75 percent. 

Parking charges 

This rule only affects car owners. Taxes are set by the community and often vary for different types of vehicles (such as motorcycles and cars). 

Water society maintenance charges 

All tenants must pay these charges, which are calculated by adding up the total number of inlets in their unit and the average size of those inlets. 

Sinking fund 

The governing board of the society is responsible for establishing a contingency fund to cover unforeseen events; this fund must have a minimum contribution of 0.25 percent per year of the total cost of constructing each apartment. 

Non-occupancy charges  

Costs that must be paid even if the tenant is not already dwelling in the home or apartment. These costs, however, should never exceed 10% of the total service fees. 

Interest on unpaid debts 

Interest on overdue balances is owed if payments are made over their due date. Prices fluctuate from community to community, but never more than 21% annually. 

Insurance maintenance charges 

Insurance costs for the building and its contents may also be included in the monthly society maintenance charge (determined by the total square footage of the unit). The insurance price for commercially-used stores and apartments in the building is not included in your monthly dues. 

Lease/rent expenses 

This is calculated based on the total square footage of each apartment or unit. 

Is payment of society maintenance charges necessary? 

There is no yearly or monthly maintenance fee associated with apartment ownership, but all amenities and services are paid for separately by the tenant. If you live in a housing cooperative, you must contribute to the cooperative by paying your share of the monthly maintenance fees. After joining, you and the developer will sign a maintenance agreement that makes you both legally responsible for carrying out your respective responsibilities. 

When a builder turns over responsibility for the society’s operations to the management committee, that committee becomes responsible for coordinating service delivery. Maintenance fees are a reasonable and desirable method of funding shared amenities since they eliminate the need for any one resident to put up a significant sum of money. In addition, there is a fair degree of leeway for members to choose their own payment schedules and methods. 

How are society maintenance charges determined? 

Due to widespread misunderstanding or dissatisfaction with the process by which maintenance fees are set, this issue often sparks heated debate in apartment complexes. As we have seen above, the management team may provide you with the specifics of each fee and its rationale upon request.  

However, the regulation doesn’t address concerns about charging equitably according to factors like dwelling size and service use. Since the cooperative society is a group endeavour, however, every resident’s complaint or pain is heard and addressed fairly, even if it requires a different method of computation. Let’s go further into each of these possibilities. 

Costs based on a per-square-foot basis 

When comparing rents for units of varying sizes, this method is employed. The square footage of your flat is used to calculate your monthly maintenance cost. If the committee chooses to impose a charge of Rs 3 per sq ft and your flat is 600 sq ft, you would be required to pay Rs 1800. 

If, however, your flat is 1200 sq ft, the price would be Rs 3600 per month. The disadvantage of this system is that bigger flats may wind up paying more than smaller ones for the upkeep and maintenance of shared amenities, even if their usefulness and accessibility could be identical. 

Equal fee 

This approach is recommended for determining maintenance fees when all units share the same capacity or are very close in size to one another. With this technique, everyone gets a fair shake since the monthly society maintenance charges are tallied together and then split down the middle.  

While this is easy to compute and eliminates any potential for disagreement, it may not be an unbiased technique if the flat sizes vary much. 

Hybrid fee 

There is no longer any need to pick between the two kinds described above since this approach combines them both. Repair and upkeep charges and a sinking fund, for example, might be combined into a single pooled charge depending on the building’s total square footage.  

In addition, all of the other types of fees, such as service fees and lift costs, are determined in the same manner. In the case of equitable and impartial allocation of upkeep costs, the use of a hybrid approach proves to be quite beneficial. 

How often must you pay society maintenance charges? 

One may choose between yearly, semi-annual, quarterly, or monthly billing periods. Housing societies choose between these payment schedules at the outset and have the flexibility to make modifications as needed. There are a number of considerations that must be made, including the ease of collections and record-keeping, the number of members who are capable of paying upkeep in bulk sums, and the timeliness with which service or utility bills are paid. 

Keeping up with your maintenance payments can help you avoid the penalties associated with paying them late. Timely payment of your maintenance fees also demonstrates that you are a conscientious tenant. If you discover any costs that don’t seem to add up, however, make sure to report them to management immediately so they can be looked into. 

Conclusion  

To sum up, it’s fair to say that all apartment or flat owners are expected to contribute to the common maintenance fund. You can’t afford to ignore these charges in order to enjoy a lifetime of security and comfort in your home, which are all benefits of being the legal owner of the property. It’s certain that your life will be stress-free. 

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What is Snagging and De-Snagging in Apartments? 

Posted on by HomeCapital Team

Everyone dreams of purchasing a luxury dwelling in which every need is anticipated and catered to by the building’s creator. Your property’s developer also makes certain that the building will have the highest possible construction quality, conveniences that meet international standards, a substantial amount of open space, a variety of unique plans, and other similar elements. Why would you ever think of something that’s called “snagging,” and what use does it serve in your brand-new apartment? In the following paragraphs, you will get all of the information necessary to understand why snagging is important. 

What is snagging?  

One would assume that a newly constructed house would be immaculate, but this is not always the case. Newly constructed homes are notorious for having flaws or “snags” that are the result of shoddy craftsmanship, despite the fact that they are advertised as being brand new. 

Snagging refers to the process of inspecting a newly constructed home or apartment in order to locate flaws that the developer of the home is obligated to fix. During the snagging assessment, experts will look for anything that does not meet the high standards of craftsmanship, anything that is not finished according to the specifications, and anything that violates the building requirements. 

It is your responsibility to inform the house builder of any flaws that you find in your home. The obligation then falls on your home builder to make the necessary corrections before the transaction is finalised. You are free to create your own list, but it is strongly advised that you use a qualified business to do it instead. 

Why is snagging important?  

It is essential to evaluate the state of your property with a critical eye, regardless of whether you are searching for potential investment properties or you are purchasing a new home. Inadequately fitting roofs or air leakage patches in your ceilings, floors, and walls are examples of flaws that, if left unaddressed, might lead to more major issues later on that would need greater financial investment and more effort to resolve. 

With the Indian construction sector moving at such a breakneck rate, a growing number of new structures are being constructed without being inspected for defects. The consequences of hiring an inexperienced contractor may be just as severe in the long run. 

Smaller problems, such as substandard woodwork or kitchen fixtures, are more likely to slip by building control than larger ones. As a result, snagging is a crucial step for any investor considering a new property, preferably before finalising a purchase or approving a construction project. That way, you won’t have to worry about fixing any issues by yourself. 

Prioritising snagging activity while purchasing or creating new construction is a must. Snagging allows you to find and address any issues with the property before they become major issues, making your investment as safe as, well, homes. 

What is de-snagging?  

The last step in the snagging process is called “de-snagging,” and it involves making sure that all of the issues that were noted on the first snagging checklist have been addressed and that nothing was damaged throughout the repair process. When your builder says the snagging list items have been fixed, you should go to the house to make sure everything is as it should be. 

The majority of reputable and well-established developers have a quality assurance team of licensed engineers. This team will conduct a comprehensive survey and inspection of each and every structural and operational element of your house, looking for even the smallest defect. 

What will be observed during the inspection? 

In order to guarantee that the standard of your facility matches the standards you were told to anticipate, a snagging inspection will thoroughly examine it for any and all flaws. Masonry, paint, foundation, storage facilities, sidewalks, courtyards, railings, ceiling, walls, grouting, window frames, entryways, ventilation ducts, electrical services, stairways, floor tiles, heating systems, cooling units, pipelines, kitchens, washroom, electrical items, toilet facilities, worktops, and wardrobes will all be inspected. 

It checks for crack formation, damage to property, and high-quality finishes, decorative deformities in joinery, paint, and flooring, chips and scuffs in interfaces and glass, and that all types of equipment, plug connectors, illumination are functioning, taps and showerheads are not leaking, coatings are relatively flat and spotless, fittings are properly fitted and functioning right, and the windows and doors close and open appropriately. 

What is the ideal time for snagging?  

When your home is totally constructed, and you are ready to move in, but before it is considered legally complete and before you have transferred agreements with the property developer, a snagging inspection must be conducted. It gives the builder time to finish something before you settle in. 

However, until you’ve officially moved in, your builder may deny you entry to your home. If that’s the scenario, a snagging inspection should be performed as quickly as possible after you take possession. You have two years from the date of completion to report any faults to the home builder, who has a legal obligation to rectify them as part of your contract. 

Cost of a snagging survey 

The snagging inspection is not free, but it will save you a lot of money in the long run. If you want to be sure you’re getting a good deal, it’s best to search about and compare prices. The cost of a snagging examination can vary from project to project and from property to property. 

How realistic is it to do one’s own snagging inspection? 

Checking it out on your own is an option, but a professional survey by far offers the best results. A competent snagging inspector will be able to see any flaws that an inexperienced observer would overlook. If you want to save money on a professional snagging survey, you might do your own assessment first and then contrast the results. 

Conclusion 

Snagging is a vital part of the construction process that should not be neglected when investing in or constructing new buildings. Snagging makes sure your investments are as solid as a building by allowing you to find and solve any issues with the building as soon as feasible. 

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The Concept of Cooperative Housing Society Broken Down 

Posted on by HomeCapital Team

In India, the cooperative housing society dates back decades and is still active today. It plays an important part in the process of making housing options that are within people’s budgets available to lakhs of individuals.  

A cooperative housing society is an organisation that self-regulates and is run by the cooperative’s members. It comes into being as a result of members working together, and with one another’s permission, to establish the organisation.  

In this article, we cover all there is to know about cooperative housing society, including the many advantages of making an investment in one. 

What is a Cooperative Housing Society? 

Cooperative housing societies are groups of people who have come together to form a legal entity and share ownership in order to better serve their community. The cooperative housing society owns and maintains residential properties, each of which may include one or more individual homes. The cooperative housing society will buy land, then expand it, build apartments on it, and then give those units to its members. 

The Registrar of Cooperative Societies is responsible for enforcing the Cooperative Societies Acts and regulations that govern the operation of the society in India.  

History of India’s cooperative housing society 

Cooperative housing society movements grew substantially in India around the beginning of the twentieth century. The Bangalore Building Cooperative Organisation was the inaugural cooperative housing society to be created in the Indian state of Karnataka in 1909. This was followed by the establishment of the Bombay Cooperative Housing Authority in the Indian state of Maharashtra in 1913. 

To help housing cooperatives throughout the country pool resources, including funding and security, undertake studies, and lend a hand to their local governing bodies, the National Cooperative Housing Federation was founded in 1969. 

There have been a number of programmes on both the regional and the central levels that are intended to provide housing societies with financing and aid in land management. The regulations governing cooperative housing have undergone several changes under the direction of the government in order to make them more accommodating for smaller and medium-sized housing organisations. 

Various types 

The following categories are used to describe the many types of housing cooperatives: 

  • Tenant ownership 

Land in these cooperative housing associations may be owned freehold or on a leasehold basis. Individuals who are members of the cooperative are mostly homeowners or people who have long-term leases on the property. They have to follow the rules for home transfers and subletting. Nonetheless, people have the freedom to design and build homes that meet their own requirements. 

  • Tenant co-partnership 

The cooperative societies in this group have either freehold or leasehold titles to the property. Following payment of the first share and the monthly fee, the members are given immediate residence.  

  • Housing mortgage 

The housing cooperatives function similarly to credit cooperatives in that they provide members with access to loans for the purpose of building homes. In any case, it is up to the members to schedule the building activities. 

  • House construction 

Cooperative societies fall under this category since they are responsible for the construction of homes on behalf of their member-owners. After the homes have been built, the members are given the keys to their newly constructed dwellings. The funds that were used for the building might be recouped via several lending options.  

Top Features

  1. Voluntary organisation 

Cooperative housing societies are non-profit organisations that are run on a voluntary basis and are built on the principles of self-sufficiency and mutual aid for their members. 

  1. Progressive administration 

In a cooperative housing association, elected officials and representatives have positions of power. 

  1. Public membership 

Everyone who shares the goals of the cooperative housing society is welcome to apply for membership in the organisation. 

  1. Self-reliance and liberty 

Cooperative housing is a kind of housing that is, in many respects, self-governing and impartial. 

  1. Distinct legal entity 

The Cooperative Societies Act stipulates the requirements for registering a cooperative housing society. Once cooperatives are registered, they are considered to be legal entities and are subject to applicable state and federal laws. 

  1. Information and instruction 

In order to carry out their duties effectively, participants of cooperative housing society get education and instruction on such topics as legal compliance, administration, and the advantages of communal living. 

  1. Contribution of capital  

The cooperative housing society requires that each member make a payment of the same amount in order to acquire and maintain the shared properties. 

  1. Profitable for members 

Every cooperative housing society participates together for the common good, enjoying the fruits of everyone’s labours without regard for personal gain or the jostling for position. 

  1. Mutual aid 

By leveraging regional, national, and global frameworks and belief systems, cooperative housing societies help their members implement best practices and raise their quality of life. 

Goals of a Cooperative Housing Society 

A cooperative housing society’s primary mission is to provide a source of assistance for its individual members. Other goals includes the following, which are listed below: 

  • Providing the members of the housing society with financial assistance in the form of loans so that they may build homes or other buildings inside the complex. 
  • Purchasing land, building apartments, and dividing them up among the members of the cooperative housing society. 
  • Boosting the vested interests of the housing society and fostering an attitude of economic independence among its members. 
  • Creating an optimal social and economic situation inside the housing society so as to make it possible for residents to enjoy healthy lifestyle circumstances. 
  • Providing fundamental amenities such as drinking water and electricity, in addition to guaranteeing that the housing society is routinely maintained. 

Positive aspects of taking up residence in a Housing Society 

  1. Affordable 

In a cooperative housing society, the members exercise authority over and make decisions on the organisation’s finances. it is far more affordable in terms of amenities and conveniences provided to each individual member. if you make a decent initial investment, spend as little as possible in pre-closing fees, and extend the length of your mortgage, it will be more inexpensive than any other form of individual ownership. 

  1. Investment security and safety 

Housing cooperatives are solid and stable institutions because they have their own distinct legal presence and the resources necessary to keep their businesses going. A home in a cooperative housing society is a sound financial investment that may be owned outright.  

Representatives of housing cooperative societies are free to stay in their apartments for as long as they like because their landlords are not allowed to interfere. Even after leaving the apartment, the occupancy benefits continue to be paid out, and new tenants have the option of leasing or renting the property. 

  1. Superior services and facilities 

Since they have a sense of ownership in the space, the members take good care of it. One may anticipate improved administration as well as high-quality amenities. All member’s requirements are accommodated, and they are given the opportunity to share their thoughts for the betterment of the group as a whole. 

  1. Collective obligations 

Each stakeholder is responsible for a portion of the cooperative housing society. Servicing, repairs, upgrades, and coverage will all fall within the purview of the cooperative society. Members must contribute to the upkeep of society by paying the associated fees. Participants have input on all phases of design and implementation, from initial conception to a major overhaul. Each member pays a small percentage of the total monthly bill to cover overhead and upkeep. 

Conclusion 

The cooperative housing society is known for its feeling of fellowship, cooperation, and socialisations that are sanctioned by the law, making it simple and secure for its members to participate. Now that you know how a cooperative housing society works and the benefits of joining one, allow us to assist you in acquiring the perfect property.  

HomeCapital is the best place to begin the process of purchasing a home in a cooperative housing society or another similar arrangement. The HomeCapital program provides buyers with access to interest-free down payment assistance, which may be used toward the paying the initial contribution by home buyers, stamp duty, as well as the possession charges required to be paid while taking possession of the house. 

Why net-zero housing is the way of future 

Posted on by HomeCapital Team

The adoption of ecologically sound practices by homeowners is rapidly becoming one of their top priorities. And one that is gradually becoming less financially prohibitive and more feasible. In an effort to encourage a greener way of life, new inventions are continually appearing, and net zero houses are surfacing as the ultimate goal of green living.  

This is particularly true considering the ongoing decline in the cost of building a net zero home. In the following paragraphs, we will discuss the advantages of net-zero housing and why they are the wave of the future. 

What is a net-zero house? 

Just for a moment, pretend you will never have to worry about your utility bills again. That’s what “net zero” implies. Those who live in “net zero” houses generate the same or more energy as they consume on a yearly basis. Some even generate an excess of energy, which may be sold back to the utility company for cash or credit.  

An intelligently constructed net zero house may reduce energy use and energy waste to the point where the homeowner has no energy costs, and the home is healthier and free of carbon emissions. In addition to protecting, you from fluctuating energy costs, they strengthen your home’s infrastructure, improve your quality of life, and bring it into harmony with its environment. 

Guidelines for constructing a net-zero house 

Building a house that utilises the least amount of energy possible demands not just careful design but also, obviously, cutting-edge technology. In order to begin, there are a few fundamentals that you should examine regardless of the circumstances. 

  • Take caution in the selection of your location 

Your long-term energy needs are significantly influenced by environmental variables, including sunshine, air, precipitation, and temperature. So, it’s crucial to study the weather conditions in advance. It’s important to position your home so that you may take advantage of breezes, sunshine, and natural cover.  

For instance, in the northern hemisphere, solar panels perform best when oriented toward the north. However, it is recommended that most windows face south. 

  • Utilise several forms of free energy 

A net-zero house cannot function without a photovoltaic system. Installing solar panels on your roof or outside your home allows you to harness the sun’s energy and use it to power your home and even store some of it for the colder months.  

The greatest conditions for this are when the roof (and not the windows) receives direct sunshine during the warmest times of the year. Solar panels have seen their prices drop dramatically over the last several years, but at the same time, their efficiency has been continually improving, which is good news for people who are concerned about the expenses involved. 

  • Ensure that the insulation is future-proof 

To offset your reduced energy output, you’ll need to reduce your energy use. As a result, a net-zero house requires an auxiliary barrier to the elements. This requires not just brick walls but also triple-paned glass and an airtight exterior. Just like a human body, a building should be able to breathe.  

Thus, a well-functioning ventilation system is essential for maintaining a comfortable and productive interior environment. Even if you don’t open any windows or doors, it will bring in outside air and recirculate it throughout the house. 

Pros of having a net-zero house 

The primary objective of net-zero housing is to achieve complete independence from exhaustible fossil fuels, cut down on carbon dioxide emissions, and mitigate their overall impact on the environment. However, they also provide the people who possess them with a lot of useful benefits. 

  • If you use renewable energy sources that don’t cost you anything, like the sun and the wind, you won’t have to worry about paying exorbitant amounts for your power and heating. According to the findings of research that was conducted in 2011 by the Buildings Performance Institute Europe (BPIE), energy-efficient architecture may reduce a building’s running expenses by as much as 80 per cent. 
  • When paired with automatic ventilation systems, airtight buildings call for much less labour to be done for maintenance. It won’t be necessary for you to clear up dust on a regular basis or be concerned about the growth of mould in your damp rooms or basement. 
  • It is possible for zero-energy houses to generate a profit for their owners as an investment. They have a significant resale value since they need nothing in the way of upkeep, and their structure is kind to the environment. If you choose to sell the property at some point in the future, you will therefore have a very good chance of making a substantial profit. 

Does it represent the future of home design? 

The rapid increase in building development (and associated increases in energy utilisation) is a direct outcome of the increasing urban expansion over the last several decades. Zero-carbon constructions are becoming more important in a nation like India that is striving to decrease pollution while also increasing energy accessibility in both rural and urban settings.  

As every kilowatt-hour of power saved is one that can be used elsewhere, net-zero housing has the potential to revolutionise not just the housing industry in India but additionally the energy sector. In addition to reducing carbon emissions, zero-energy facilities may help expand energy democracy. 

The increased knowledge among participants is expediting the adoption of such solutions despite the greater initial costs involved with learning about, installing, and sustaining net zero energy utilisation. When this attitude is included throughout the whole chain, beginning with the conceptualisation and creation of the project, it may greatly reduce the initial investment required to implement these features.  

Considering the need for and potential reward from investing in environmentally responsible building practices, net-zero housing has the potential to play a pivotal role in India’s markets for real estate of the future. 

It is possible to achieve significant energy savings and lower maintenance costs during the lifespan of a net-zero energy house. Integrating energy-efficiency measures with renewable resources, these buildings are designed and built to provide all of their own energy requirements.  

Investment in net-zero housing and sources of clean energy may be incentivised by policymaking. Although there is a larger initial investment for net-zero energy buildings, tax credits and other subsidies may make them more competitive. The residential and commercial construction industries have a major chance to reduce the negative effects of carbon-intensive energy consumption by implementing net-zero housing projects. 

Conclusion 

Considering that buildings (both residential and commercial) in India are responsible for up to 30 per cent of the country’s total energy usage, net-zero housing provides a significant chance to foster a future less reliant on polluting fossil fuels. In addition to financial savings, there are many other advantages. Better for the environment and the homeowner’s wallet, net-zero housing is the wave of the future. 

Is a net-zero home something you’re considering investing in? You may get aid with your down payment via HomeCapital, which is India’s first such programme. You may buy a net zero house with the help of our programme, which offers interest-free financing on down payments. 

Allotment letter: An important tool to buy a property 

Posted on by HomeCapital Team

Do you consider looking for a suitable property the most challenging task? Undoubtedly it is a crucial step, but there’s more. Yes, we are talking about documentation. You must have all the property documents in place. Besides the title deed, sale agreement, commencement certificate, and other things, there is yet another essential document which is known as the allotment letter.

An allotment letter 

It is a crucial document concerning property purchases in India. 

When the builder receives the booking amount from the buyer, they issue this document to the first owner. Only the first owner possesses the right to the allotment letter, and other owners can seek copies of the original document from the seller. 

Significance of the letter of allotment 

This letter comes in handy if a buyer wishes to apply for a home loan. The reason is that the amount the buyer has to pay to the builder is mentioned in the letter. It also provides evidence when the builder fails to grant the promised facilities to the buyer. 

The Indian Contract Act mentions that a document is legally binding if it is enforceable under Section 10 and made by competent parties. Therefore, since the allotment letter contains all the essential contract features, it is legally binding. 

A builder cannot cancel a property booking unilaterally after issuing the allotment letter. However, they can send a notice to the buyer with the details of the refund of the booking amount. 

According to a new order of the Mumbai Bench of the Income Tax Appellate Tribunal (ITAT), an allotment letter from the builder is enough to act as proof of investment for availing of LTCG tax deductions after the sale of a property. This recent order benefits millions of taxpayers because they will no longer need to wait for the ‘Agreement to Sell’ document from the builder. 

Contents of the letter 

Here is the information that a letter contains: 

  1. Delivery date 
  1. Payment 
  1. Significant facilities 
  1. Construction terms 
  1. Schedule of construction facilities 
  1. Total due amount to the builder and the builder’s obligations if there is a delay 

Features of the letter

  1. This letter includes data and facts related to the property. 
  1. The letter is the only tool that can work as evidence of property transaction in case of an incomplete property. 
  1. It states the architectural details, the building plans, specifics, and the sum paid to the contractor. 
  1. The letter mentions the payable amount to the builder for the remaining amount to be financed by the bank. It may come in handy if you want to acquire a bank loan. 

Different types of allotment letters 

Different kinds of allotment letters depend on their origin, format, and style. They are listed as follows: 

Land Allotment Letter 

  • You should write this document like a formal letter. You must date, sign, and stamp the document as an authorized individual. 
  • It should contain the allotted shares and the due sum on the allotment. 
  • Do not forget to include the due date and address of the allocation money payment. 
  • You must also include the interest amount imposed on allotment funds after the deadline. 
  • The letter will mention the possible consequences of failing to pay the allocation money. 
  • The applied number of shares and the share application’s reference number should be included. 

Builder Allotment Letter 

  • The builder issues an allotment letter when you make the flat’s initial payment. It serves as the cost of the initial reservation. 
  • A customer can opt for a refund and cancel the agreement anytime if there is any such mention in the deed. 

Flat Allotment Letter 

  • If you intend to book an under-construction property, you should receive a flat allotment letter from its builder. 
  • This letter will contain features like flat payment alternatives and extra maintenance costs you need to pay. 
  • The deed also includes a fixed construction schedule, delivery fate, various house plans, and the builder’s liability in the case of a flat delivery delay. 

Wrapping up 

An allotment letter is mandatory, but several individuals do not know the specific format. Are you also unaware of how to write a strong letter of allotment? Do not worry! You can now get your hands on allotment letters with a quick select and fill format on the Internet. So, resort to pre-written allotment letters to produce an enticing document. 

Understand joint development agreement in real estate 

Posted on by HomeCapital Team

Real estate is one of the most important sectors that determine the welfare and development of a nation’s economy. A considerable amount of investment, time, effort, and skill is involved in successfully developing real estate. Investment is necessary for acquiring land, obtaining its conversion permission from the concerned authority for the purpose intended, and for many other reasons. Joint development agreements have become a famous model nowadays where the developer and the land owner combine their efforts and resources.  

As per a joint development agreement, the land owner will contribute his land and join to form an arrangement with the developer. The developer will develop and construct a real estate plan according to his budgetary plan. 

Hence, a land owner contributes his land, and the developer bears the development and construction cost. In this article, we will discuss more about joint development agreements in real estate.  

What is a joint development agreement? 

A joint development agreement (JDA) in real estate is an official contract between the landowner and the developer that vividly explains how the construction will take place. 

It has become a common aspect in the real estate world that binds both the landowner and builder in a contract for constructing a new property. The landowner receives some provision in return. 

As the name suggests, this agreement takes place over fixed guidelines and propositions between two parties. 

JDA is the ownership right of the land and the fixed guidelines for the development of the land. Through this agreement, the owner is bound to give the developer his land for development under legal terms and through a fixed contract. 

The development or construction work takes place as per instructions, and ultimately the profit shares are divided. 

What does the landowner receive in it?

The major things that the landowner receives from the developer in a joint development agreement are:  

  • Round sum consideration 
  • Percentage of sales revenue 
  • A part of the percentage of the newly constructed property on the given piece of land 

The above points may vary depending on the terms and conditions of the agreement and what both parties mutually agreed to.  

This is how a Joint Development Agreement sums up the resources of the landowner and the builder together. After a certain portion is allocated to the landowner, the rest of the property is sold off by the builder directly.  

Structure of a joint development agreement 

JDA is a structured formal agreement that consists of many parts based on financial implications. They are as follows: 

  1. Contribution resources 
  1. Costs 
  1. Transfer of the land and execution of the power of attorney 
  1. Marketing Rights 
  1. Handing over the right of land 
  1. Development Rights 
  1. Management of marketing and development responsibilities 
  1. Revenue shares 
  1. Mortgage of land 
  1. Termination of Agreement  

Benefits of a joint development agreement 

JDA is increasingly becoming popular due to its growing significance in the real estate industry. It comes with several benefits. We have listed a few of them below: 

  • Fast and smooth development of the land as working capital is necessary mainly for meeting the construction needs 
  • Suitable consideration for the landowner 
  • A win-win situation for both parties 

Points to be noted concerning joint development agreements 

In the present time, most independent homes and villas are amassing a huge revenue. Therefore, land owners and developers are coming together for new projects. However, before you step into a joint development agreement, you must note some considerations listed below. 

  • A joint development agreement is a transferable title.  

Buyers must remember that the power in real estate and selling the property depends upon the developer. The landowner has fewer rights on the project. They cannot sell the newly constructed building from the developer without obtaining a no-objection certificate from them.  

  • The documents must be registered 

The authenticity and validity of the documents are only proved when they are registered in the sub-registrar office. Registration of the agreement is significant for both the parties and any potential buyer. If you just get the document notarized, you will not be saved from any future consequences. Along with the main document, the supplementary agreement should also be registered. 

  • A home loan is not available until registration 

Without proper registration of the joint development agreements, no home loan is sanctioned by the bank on the property. Of course, one may look out to other financial sources for purchasing property. 

Wrapping up 

As the real estate market evolves every day, a joint development agreement is becoming more common and handy. it is a beneficial deal for both the owner and the developer as it saves money and eliminates any hassle for both parties. however, it is advisable to properly study the agreement before one enters into such an agreement.  

3D Printed Homes to Revolutionise Affordable Housing 

Posted on by HomeCapital Team

The construction business has been confronted with difficulties that have never been seen before in recent years. There is a worldwide housing crisis, a rise in labour prices that are being driven up by a lack of trained employees, and the consequences of climate change throughout the globe are becoming more obvious than they ever have been. As a result, the construction industry has made it a point to challenge established practices and test the boundaries of innovation to keep up with the changing times, which has necessitated the adoption of new technologies as part of the ongoing digital revolution. 3D construction printing is one breakthrough that shows great promise. Even though it’s a newer method, it’s been tried and true in a wide variety of buildings, including homes and apartment complexes, and it’s already revolutionising the housing market. This suggests that 3D printed homes have the potential to offer better, more environmentally friendly, affordable and economically feasible properties. 

Are they a sustainable solution?  

The 3D printing process is far more eco-friendly than conventional building methods. Since just the precise quantity of material that is required is used in 3D printing, there is far less waste produced. This procedure may be made even more environmentally friendly by including materials that have been recycled or reclaimed. 

As an added bonus, the speed with which 3D printed homes can be erected means that they cause far less disruption to the surrounding area. In order to construct a home using a 3D printer, one simply needs the machine itself. Perhaps just one or two compact construction trucks would be required to level out the site. This means that 3D printed homes are greener than conventional building methods. 

How are 3D printed homes built? 

Additive manufacturing is another term for 3D printing. The method involves building up a three-dimensional structure from flat sheets of material. Until recently, 3D printing was only capable of producing very tiny plastic items. However, advancements in technology during the last decade have changed that. Modern 3D printers have the capability to extrude several materials, including concrete and metal. 

Using conventional three-dimensional printing techniques and scaling them up, engineers are able to create a house in three dimensions. The printer employs a previously configured floor layout. To create the walls, 3D printing employs a range of specialised concrete combinations. Windows, doorways, drainage, electricity, HVAC, the rooftop, and interior finishes are installed by construction personnel. 

Impact of 3D printed homes on constructors  

3D printed homes eliminate the need to pay more for intricate designs. Designs that, in the past, required a significant amount of time to conceptualise, carry out, and introduce to customers may now be made available to them in a shorter period of time. 

This technique has the potential to drastically decrease the amount of capital that is locked up in building materials and the expenses to recover scrap. 3D printers may have a hefty price tag up front, but they help constructors save a lot of money in the long run by lowering their incremental unit costs. One of 3D printing’s greatest advantages is that it streamlines operations, transforming the construction industry into a network of mini-construction hubs. 

Impact of 3D printed homes on homebuyers  

Due to the minimal cost of construction, the purchaser does not need to fork out an excessive amount of money. Therefore, 3D printed homes enable constructors to build swiftly as per the demand, offering a large window for buyers to fully personalise their homes without having to keep an eye on the time. The technique allows for the use of recyclable materials, it is disaster-resistant, and it creates walls that can sustain themselves. 

The inclusion of thermal insulation in a 3D-printed residence ensures that occupants will enjoy a pleasant environment all year long. This will, in the long run, create a whole ecosystem that delivers accommodation that is more operationally accessible and also more financially affordable. 

Conclusion 

The construction business and the housing market throughout the world will be fundamentally altered by the introduction of 3D printed homes. This technology can offer houses that are gorgeous, robust, and can be constructed in a broad range of architectural details for individuals of all economic strata.  

For this reason, 3D printing’s disruption of the construction sector comes at a time when much-needed innovation is especially welcome. The use of 3D printing in the construction industry will lead to a decrease in the homeless population, and the realisation of the middle class’s desire to own their own house. 

Thinking About Investing in a 3D Printed House? 

Once you have chosen your dream house, visit HomeCapital to apply for our down payment assistance program. HomeCapital makes it easier for you to purchase your dream home by offering you interest-free credit for up to half of the amount of the property’s down payment.   

Financial benefits of buying jodi flat 

Posted on by HomeCapital Team

The jodi flat, or trend of purchasing adjacent properties by homebuyers, has recently witnessed a revival in popularity. Jodi flats have proven to be incredibly advantageous for homebuyers since it allows them to save money while also ensuring that they can stay close to their families. Also, this trend is particularly common in pre-construction dwellings, where the buyer has greater leeway in making personalisations to the property.  

But is it really profitable to own two adjacent apartments? Let’s have a look. 

Why do individuals favour jodi flats? 

There are two main reasons why a buyer would want to acquire two smaller flats and integrate them into one larger 3 or 4 BHK: 

  • Two small flats in a prime location may prove to be a good financial investment. For instance, if you purchase jodi flats and then turn around and sell them, you’ll earn a lot more money than you put in. 
  • In spite of your best efforts, you may be unable to upgrade to a larger house, either due to financial considerations or because of your strong preference for your existing location. Buying the flat next door is a simple, beautiful, and no-brainer option in such a situation. 
  • Many people argue that it is more useful to purchase two smaller flats rather than one large apartment with four or five rooms since you acquire extra space that you normally wouldn’t get if you bought just one flat. Therefore, purchasing two 2-BHKs is more advantageous than purchasing one 4-BHK. 

Financial Benefits of Jodi Flats 

  • The process is simple 

The prospective buyer of the property will be required to submit a request for an amendment that grants permission to the municipal government of the area to combine the flats. In spite of the fact that you will be required to pay two distinct stamp duty rates, the total amount will be lesser to what you would spend for a single larger unit. 

  • Profit from reduced taxes 

A major advantage of jodi flats is the tax benefit. However, the extra room and flexibility in design are nice bonuses as well. Investing in numerous flats that are connected together and utilised as one separate residential unit qualifies a taxpayer for investment-linked tax advantages, as stated by the Income-Tax Appellate Tribunal. 

  • Flexibility 

The added financial freedom that comes from renting out the apartment next door while maintaining close supervision of one’s own residence is just one more perk of owning a flat in the same building. 

Other advantages 

  • Upgraded kitchen space 

Since there are now two kitchens in the building (one for each apartment), the additional one may be demolished to provide more space in the living area. The kitchen may be opened up to the living room, creating a space with more storage, a dining table for six, and a massive cooking area. The scope of possible layouts is vast. 

  • More rooms dedicated to the master suite 

If you have purchased a unit with 2 bedrooms, 1 bathroom, and a kitchen, you have the option of expanding the number of bedrooms by merging two of the rooms into a single larger one. For example, the original 4 bedrooms may be converted into two master bedrooms. 

  • Layout reminiscent of a home 

In the event that the jodi apartments are united vertically rather than side by side, you will have the option of installing a conventional staircase. When space is limited, having access to stairs in one’s home is a luxury that not everyone can afford to enjoy in a densely populated area. It creates the impression that the apartment living is a standalone residence. 

  • Consolation and relaxation 

When you make a choice to extend your present flat by connecting it with the flat next door, it eliminates the need of uprooting the whole family. You are able to stay in the neighbourhood that you like and are familiar with. 

Keep these things in mind before buying a jodi flat 

Consider the following details carefully before you rush out to purchase two inexpensive and rather modest flats in order to create a jodi flat: 

  • Is tearing down the walls in order to connect the two units a realistic and workable option? 
  • Since buildings sometimes need double-stacked bathrooms for plumbing maintenance and leak prevention, ensure that your envisioned jodi flat layout follows the necessary guidelines. If the two apartments were renovated on separate dates, there is a greater chance that their fittings and inner workings might be incompatible. 
  • To combine two flats that are next to one another, permission is required, and some states and cities do not permit the practice. Consequently, it is necessary to get mandatory approval from both the local city council and the welfare association of the colony. 

Conclusion  

Tired of starting the weekend with high hopes of finding the ideal apartment? Frustrated that no other society can provide the same comforts as your own? Trying to find the perfect house may not always be productive for a variety of different reasons. If this is the situation, then creating a single house out of jodi flats is the superior and more astute choice. 

So, are you thinking of buying a jodi flat? HomeCapital is the ultimate platform to get you started on the path to buying a jodi flat. Buyers may get interest-free down payment assistance from the HomeCapital programme to get added support with their down payment, possession, stamp duty, and any other property payments owed to developers.