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Benefits of pre-approved home loans

Posted on by HomeCapital Team

“Congratulations! We are happy to inform you that you can now avail of a pre-approved home loan.” Does that ring a bell? Mostly, you would be familiar with this message. And guess what! This is great news if you plan to buy a new home.  

Home buying is one of the biggest milestones for most people. And this journey is not an easy one as arranging the needed finance and running through the entire process from selecting the right property to the property registration is a lengthy one.

Prior to sending the above message of a pre-approved home loan, banks run a series of background checks like the cash flow and expense of your account, credit score, etc. By doing so, banks only indicate that you can avail of a home loan, and to know more, contact the financial institution.

Generally, the period for which a pre-approved home loan is valid is 6 months, within which you must finalize your property purchase. This loan offer gives you a head start and expedites the purchase process once you have narrowed it down to your dream property.

Let us walk you through the key benefits of pre-approved home loans.

1. Speedy and smooth loan disbursal

As mentioned earlier, banks have already done initial background checks about your cash flow, expenses, and if any other existing loan account. So what remains is the verification of property documents and other legal documentation. Hence, the loan disbursement process becomes speedy and smooth. You have this initial advantage particularly in the case when there is less time to buy the property. For example, if the developers are promoting an offer for a limited period or low price purchase on a festive occasion. In addition, if banks are promoting home loans on lesser interest rates for a limited period.

2. Better home selection process

A pre-approved home loan gives you an indication of the loan amount to be disbursed. This builds the much-required judgment for the home purchase amount you need to raise. For example, if the bank approves a loan of Rs.70 lacs, then the home budget can be finalized between Rs.60-80 lacs. Banks may disburse the loan amount to 80% of the property value depending on various factors of your financial history and as well as the property.  Once you know your budget, the home selection process becomes easier and time-saving as you can narrow down to your property as per your budget.

3. Power of negotiation

A pre-approved home loan acts like a trump card when you are negotiating with your developer for your new home purchase. When you have a sanction letter for a pre-approved loan from the bank, you have a clear price range of your property purchase. The developer will see you as a serious buyer and not a general inquirer of the property. By creating a quick purchase ambiance you have a better edge and power of negotiation striking off a better deal with the developer.

4. Superior financial planning

You will know your exact financial position with the pre-approved home loan amount. It will give you a clear understanding of the amount of down payment to be made. With the grace period of six months, you can plan and manage your finances in an efficient manner to try and make a larger down payment and procure a lesser amount of loan.

A pre-approved loan does not guarantee the loan disbursal unless the property and legal documents are in place and the due diligence guidelines are followed. It gives you a head start and a clear understanding of the home buying budget which can be followed. It avoids the last-moment rejection in case you apply for a higher amount loan. Furthermore, if you follow the detailed home buying process carefully most likely you will be able to buy your dream home quite smoothly.

West Bengal extends cuts in stamp duty and circle rate till January 2022

Posted on by HomeCapital Team

West Bengal home buyers can breathe a sigh of relief as the state government extends cuts in stamp duty and circle rate for another three months. The finance department has issued a notification extending these restricted period budgetary sops until January 31, 2022 – a 2% reduction on the tax imposed upon real estate transactions (stamp duties) while lowering circle rates by 10%.

The rebate window was initially scheduled to end on October 30 but the State government has shown that it will be extended following an appeal by builders associated with the state chapter of the Confederation of Real Estate Developers of India (CREDAI).

As per the twin notifications, a 10% decrease in circle rate and revised stamp duty of 4% for units that are priced at up to Rs 1 crore and 5% for units that are priced over Rs 1 crore reported in the state budget and effective till October 30 was being stretched out till January 31, 2022. 

The sector had requested the government to extend the rebate by two months till December 31, 2021, however has now got an extra month.

The CREDAI Bengal President Nandu Belani says that this is huge for the real estate sector. It will create demand and support development seen since July-end.

CREDAI West Bengal president Sushil Mohta said it would offer a colossal relief to home purchasers and bring more revenue to the state treasury.

More than 60% of home deals in Kolkata occur in five months from September to January. With the sops covering this period, the industry is looking at the highest ever sales time in the second half of the year (July-December). 

Between July and September this year, 15,160 apartments were sold, up from 6,842 apartments sold during the corresponding time frame the year before. The spike in demand has likewise prompted an increase in launches. While just 756 units were launched in April-June 2021, developers launched 3,128 in the accompanying three months. 

10 must-have legal documents before considering buying a new home

Posted on by HomeCapital Team

The milestone of new home buying is beyond just a dream for most people. It is a process of meticulous planning to save money over several years or even decades of life. Home buying can be a smooth process if you are thorough with your documentation and have a good legal understanding of the same. You need to be cautious at every step of this process till it’s completed. Let us have a look at the list of legal documents you need to buy your dream home.

1. RERA Registration Certificate

Once you have narrowed down the location of your property, you need to check whether the project and the developer are registered with RERA. A unique registration number is provided by RERA. With this number you can check the developer’s details on the RERA website for the state you plan to buy a new home.

Also note that RERA registration is applicable to all projects where the land to be developed is 500 sq.m or more, and the number of apartments is 8 or more, all phases inclusive.

2. Title Search & Report

Title search and report are required to be done to know and understand the ownership details of the property. As a new home buyer, it is important to conduct this search to check the residential apartment ownership status. This step is also essential before buying a new plot. It mentions the names of owners and property descriptions.

3. Sale Agreement

The process of buying a new home begins with this important document. The Sale Agreement mentions the sale terms and conditions of the property between the buyer and developer. This also includes the total payment to be made, the amount of payment already made, and expected date of total payment. This legal document facilitates the sale process and acts as a road map for financial transactions with property descriptions.

4. Sale Deed & Title Deed

Sale Deed is the final document of ownership. It records and mentions the actual ownership transfer of the property. It has to be registered at the Sub-Registrar’s office to include the property in the jurisdiction of the city where this transaction takes place. Sale Deed is the endpoint of the Sale Agreement, as the latter is the beginning of the Sale process.

5. Khata Certificate

Property tax is a mandatory payment following the property purchase. In Karnataka, property tax is termed as Khata or Khata property tax. It is a legal document often called a Khata certificate or extract representing the property assessment account. It contains property details like built-up and carpet area along with its demarcations, owner’s details like name, address, age, and property tax ID. Khata certificate is known by different names across different regions. For e.g, in Maharashtra, it is known as Property Register Card.

6. Non-Objection Certificate

It is advisable that you request copies of Non-Objection Certificates (NOCs) from the developer. The developer complies with the conditions of Intimation of Disapproval, also known as IOD by procuring a set of NOCs from various infrastructure authorities. These are environment, traffic, tree authority, sewage, electricity, fire department, etc. Without these NOCs, the IOD cannot be granted to the developer.

7. Approved Building Plan

It is imperative for you to have a copy of the approved building plan issued to the developer by the municipal authority like the building proposal department. You can keep an eye on the deviations between the proposed plan and the built structure.

8. Occupancy Certificate (OC)

This is a very important legal document that allows you to physically possess the property. It mentions that the property has been inspected by the municipal or developmental authorities and the developer has complied with all the statutory and regulatory conditions. For the new home buyers, it is essential to buy the property only after procuring the Occupancy Certificate. Failure in doing so may result in a penalty or even an eviction to the buyer.

9. Physical Survey/Measurement

It would be in your best interest to conduct a physical survey of the apartment you wish to buy. This survey must be conducted by a professional mentioning the facilities provided by the developer and a quality check. This will also include the physical measurement of the area. This document mentions whether the actual area has been provided as per the proposed area.

10. Letter of Allotment

In case you have plans to buy a home in an under-construction building, it is mandatory to procure the allotment letter mentioning the details of your apartment/home and the financial details. Furthermore, this letter is a mandatory requirement in procuring a loan from a bank as it states the property price.

Buying a new home can be a smooth process if you have the above-mentioned documents and the necessary checks done. The more time you spend to procure maximum documents better will you have peace of mind in the future.

A glimpse of the Indian real estate market in 2021

Posted on by HomeCapital Team

Real estate is one of the most thriving industries worldwide. It comprises 4 parts, namely, retail, living quarters, business, and hospitality. This industry finds its growth when the corporate world itself grows, which in turn requires more office space, along with places for the employees to stay nearby. The construction industry impacts the economy in several ways and has a huge impact on the world itself.

Other than agriculture, Indian real estate is responsible for creating the second-highest jobs in India. It also brings in investments from a lot of non-resident Indians. This is particularly evident in the city of Bengaluru, along with Pune and Goa, among others. The months from July to September witnessed the slow but steady recovery of the Indian real estate market, especially in the categories of business and residential property.

During the quarter, real estate activity increased as the country began to gradually return to a more normal economic pace, aided by robust immunization campaigns.

After a halt in the April-June quarter highlighted by the pandemic’s revival and limitations imposed by various state governments, record-low house loan interest rates and sops supplied by real estate developers helped top Indian property markets go upward.

The key is affordable housing

Homeownership has gained importance in the past few years and this ideology has taken firm root in people’s minds. There is a huge market for affordable housing, and it is predicted that it is just going to keep growing in the year 2021. Sales are forecast to grow across the board, while people in mid-income or ones on a budget that are looking to buy a home are going to be in luck in the 2021 real estate market. Developments that have their plots in place and affordable housing were seen to be the most sought-after areas that people enquired about. It could take around 8 months for mid-level housing to recover from the pandemic to return to its previous form. The seasons that host festivals did witness a rise in the real estate market as a consequence of all the offers.

Large homes are going to witness a rise in demand

As the pandemic is gradually subsiding, the real estate landscape is changing as well. Not only are people looking for affordable housing, but they also prefer to opt for estates that have various facilities like gymnasiums, swimming pools, etc. that can promote healthy living. This has turned into quite a prominent factor in people’s decision-making. Developers who have their finger on the pulse of the changing times have also factored this in and modified their plans to include these elements in their home plans to attract more buyers.

While in earlier times factors such as location and the state of the house within were sufficient to satisfy a buyer, it is not the case anymore. The new-age buyer looks for various other amenities that are high grade and elevate their way of living. Deliveries of items, lifestyle benefits, gardens for exercising, cycle lanes, etc. are just a few of the things that most buyers are looking for. Developers are using data analysis to gain insight into the needs of their buyers and catering efficiently to their particular demands so that they feel like the house is personalised for their needs. 

Overview of real estate investment in 2021

The revival is being attributed to a large extent to the decreased stamp duty and interest rates. Developers across India hope for this trend to be continued by banks to keep the rates at this level. Unfortunately, it is unlikely that the rates will fall further, even if RBI is trying to be as considerate as possible, as inflation is ever rising. If it goes up, the interest rates will also be increased.

While fears of a third wave of the pandemic loom large, India has accelerated vaccines, which may bring some relief, and hence the economic effect may be less severe than previously thought. The administration appears to be better prepared to cope with any issues that arise as a result of the epidemic and to avoid any large-scale lockdowns that would be detrimental to the economy. For many people, having a home is the ultimate life ambition, and the epidemic has emphasised the necessity of doing so. As a result, it is projected that homebuyer confidence in the Indian residential market would remain high.

Income Tax Implications of Buying an Under-Construction Property

Posted on by HomeCapital Team

People are increasingly preferring to acquire under-construction property as the guidance cost increases once it is fully constructed. In general, you can deduct up to ₹ 2 lakh in home loan interest and ₹ 1.5 lakh in principal repayment from your income tax. However, even if you’ve begun paying your EMI, you won’t be able to take advantage of these tax benefits if the property is still under construction. This is where the issue originates. The majority of the time, the property is handed over to the borrower a year or two after the loan is taken out. This could occur as a result of the building being incomplete. Section 24 of the Income Tax Act makes it plain that no tax benefits can be obtained if the construction is not complete.

Here’s how you can calculate the deduction for an under-construction property

What is the meaning of the previous period?

The period from the date of house loan application to the end of the financial year immediately preceding the year of property acquisition is known as the prior period. It is also known as the under-construction period. For instance, suppose you get a home loan on October 1, 2014, and you close on the house on October 1, 2015. On March 31, 2015, the financial year before the acquisition year comes to a close. As a result, your previous time frame is from October 1, 2014 to March 31, 2015.

What is prior period interest, and how does it work?

Prior period interest is the interest you owe from a previous period. The legislation permits you to claim a deduction for interest paid in five equal payments during the building term.

How to calculate prior period interest?

If Mr. Harsh took a home loan on May 01, 2015, while his property was still under construction and he acquired the flat on July 1, 2019, the interest he paid on his home loan is as follows:

Financial YearInterest Paid (in ₹)
2015-20161,80,000
2016-20171,50,000
2017-20181,20,000
2018-20191,00,000
2019-202080,000

Step 1: The prior period was calculated according to the details given below.

  • Borrowal date: 01.04.2010
  • Acquisition date: 01.06.2014
  • The financial year prior to the transaction was 31.03.2014.
  • Mr. Harsh’s previous period was from May 1, 2015 to March 31, 2019.

Step 2: Determine the amount of interest that can be deducted for a property that is still under development.

Total preceding period interest is calculated as follows:

Interest for the 2015-16 fiscal year was ₹ 1,80,000 + 

Interest for the 2016-17 fiscal year was ₹ 1,50,000 + 

Interest for the 2017-18 fiscal year was ₹ 1,20,000 + 

Interest for the 2018-19 fiscal year was ₹ 1,00,000 

= Total Interest was ₹ 5,50,000.

We divide the money into five equal parts and claim this deduction every year because you can get interest in five equal installments from the year of purchase. Mr. Harsh will be permitted a yearly interest deduction of ₹ 5,50,000/5 = ₹ 1,10,000

Points to keep in mind as you calculate your deduction:

1. Keep in mind that the deduction only applies to interest paid prior to the start of construction. The main component repaid during the pre-construction period is not eligible for a deduction.

2. If the date of the house loan is the same as the date of the property acquisition, you can take advantage of tax benefits under section 24 rather than the provision for under-construction property.

3. There is a difference between pre-EMI interest and pre-construction interest. Pre-EMI interest is the interest you pay on an under-construction property under Construction Linked Plan, whereas pre-construction interest is the interest you pay in the previous time. 

Under-construction properties are more often than not much more affordable compared to the rates when they are built as they have low guidance rates. However, once you select a property you like, before you invest any money in it, ensure that the buyer is legitimate. You should thoroughly check their background and only then buy the property. There are several times when problems might arise that could hold up the construction of your property. The issue could also turn out to be regarding the law. The loan still needs to be paid off even in the event of such delays or if the construction stops entirely. If there is a hold-up in the acquisition of your property, there will be a hindrance in the benefits you get on your tax as well.

Most affordable states to buy a home in 2021 in India

Posted on by HomeCapital Team

The face of the real estate market changes from time to time. Investing in a home is one of the greatest things in everyone’s life. You might already have bought a home and considering investing in a second home. On the other hand, you may plan to buy your first one.  The year 2020 had a fair amount of sales. It displayed a phenomenal increase from the last quarter of 2020 and with continuously reviving over the first quarters of 2021, it became a booming market for affordable homes.  Let us have a look at the affordable states to buy a home.

Maharashtra

In Maharashtra, major development is happening in Navi Mumbai as there is an upcoming international airport. City and Industrial Development Corporation (CIDCO) had announced a 100-hectare plot for 10,000 new low-cost homes. 40% of the land lies in Karanjade and Kamothe, and the remaining 60% in Dronagiri. This low-cost housing scheme was termed as Special Economic Zones (SEZs) and similar SEZs were allocated to areas like Kalamboli and Ulwe.

Navi Mumbai has been an excellently planned city from its inception. Over two decades, it is now rich with residential, commercial, and industrial sectors. It has quite a few townships, commercial plazas with outstanding connectivity of quality roads. For many years, all of its suburbs are connected by railways and have dedicated train stations. It also has the biggest wholesale supermarket for vegetables, fruits, and dry fruits known as the Agricultural Produce Market Committees (APMC). Thus, it becomes one of the highly considered affordable options to buy a home.

In the areas of Ulwe, Karanjade, Kalamboli, and Kamothe, budget homes are available for buyers in the range of ₹ 30-50 lakhs unlike any part of Mumbai.

Gujarat

Ahmedabad though a small city has developed multifold in a decade. It has booming infrastructure projects and some of the top educational institutions like IIM, GNLU, IIT, etc. It has developed the industrial sector in solar power, oil, petrol, and automobile.

The real estate industry here is not as big as the metropolitans but it is proportionate to the city size. It offers affordable homes starting from ₹ 35 lacs for a 2 BHK.

Kerala

In Kerala, particularly the capital city, Kochi is developing at a rampant pace but yet being an affordable home destination.

Kochi is one of the new metropolitan cities. It is a beautiful coastal city with a pleasant climate. It has embarked on a fast-paced ride of residential and infrastructural development. It now has a metro rail connecting the city. It has become a thriving IT hub providing good employment opportunities.

It showed a speedy recovery from the pandemic impact and the average price is less than ₹10,000 per sqft, thus making it one of the affordable cities to buy a home.

West Bengal

It is the state having one of the first 4 metropolitan cities, Kolkata. The increasing demand and buyer-centric government policies became the perfect duo to launch new projects in the affordable sector.

Kolkata has been looked at as the most affordable metropolitan. The areas like Andul, Khardah, Barasat, Rishra, Serampore, and Dum Dum offer an attractive affordable range of ₹ 20 – 35 lacs. For the infrastructural development, Rs.1800 crore has been allotted by the Municipal Corporation.

Telangana

In this state, the capital city – Hyderabad has been on a development spree for the last decade

Hyderabad is another Tier – I city with low pollution, good weather, and less traffic congestion even in peak hours. It is in the top 3 IT hubs of the nation creating great job opportunities. It also has renowned educational institutions and is rich in history, art and culture.

The IT giants establishing themselves in this city sprawling with elegant structures have changed the look and feel of the city. The residential unit sale rose by 300% YoY for the third quarter this year. This makes Hyderabad one of the sought-after cities offering budget-friendly homes.

Madhya Pradesh

In Madhya Pradesh, Indore is yet another safe city with comfortable weather throughout the year. In the last few years, there is a significant growth in the real estate of Indore. Furthermore, it is famous for its academic institutes. Not only for schools and colleges, but it is also a high-ranking IIT and IIM city.

With the dynamic moves of the local authority, there has been a launch of several residential complexes for affordable homes.

India as a nation is developing at a rampant pace across many states. One can even consider relocating with excellent work opportunities and other benefits in various cities to have an affordable home. In addition, it can also be a good investment option.

Why is home equity important while buying a home?

Posted on by HomeCapital Team

As the official definition states, “Home equity is the value of a home owner’s interest in their home.” In simple words, home equity is the original (current) value of your house at the current market rate. It is basically the difference between the mortgage and the current worth of your home.

The house equity can be calculated as follows –

Step 1 – Find the current value of or the estimated market value of your house

Step 2 – Check the last loan/mortgage statement and calculate how much loan is left to be repaid.

Step 3 – Equity = Current market value of the house – total outstanding payment towards loan or liens.

Buying a home is a long-term investment. The sum of money involved as you buy a house is significant. People often choose to or prefer to take a home loan when they decide to buy a house. However, one often gets confused in understanding the difference between a home loan and a home equity loan.

A home loan is a loan that one takes in order to buy a new home. On the contrary, a home equity loan is a loan taken by keeping the owned home as a mortgage.

House equity increases as you repay the home loan. It also increases if the overall value of your house increases.

Whenever we choose to buy a new home, calculating home equity becomes extremely important. This is because the house works as a convertible asset when there is a dire requirement of finance.

How to use home equity?

HomeCapital lists the ways in which you can use your house equity in the future.

  1. For getting a loan – A house can work as an asset that can be used as security against the loan. Especially, if you know the exact amount that you need to borrow, home equity can be a great option for you.
  2. For buying a new home – Many individuals practice buying a less costly home as their first home. They then choose to upgrade with time as their financial situation stabilizes. The equity that increases over the years for their first brought property can be used for the down payment of the new home.
  3. Getting a home equity line of credit – This feature is the best choice if you do not know the amount of money that you will require exactly. Home equity line of credit (HELOC) tends to allow you to receive about 80 to 85 percent of your home value. This is contrary to receiving the lump sum loan amount at a go. You can use HELOC to borrow money as needed but the rate of interest shall be variable based on the trends when you borrow.
  4. Cash-out refinancing – This allows you to create a new and larger mortgage on your home. When an old mortgage is replaced with a new mortgage and if the new mortgage is more as compared to the old mortgage balance, cash-out refinance is possible. In cash-out refinance, the difference between the two mortgages is paid to the loan taker.

What are the advantages of using house equity?

Following are the advantages of using house equity:

  1. When you secure a loan against your house, it allows you to get the loan at a comparatively lower interest rate.
  2. This can be an added advantage at the time of filing tax returns.
  3. Having immediate liquidity quickens the process and hence you can borrow or receive the 80 to 85 percent amount.
  4. It can act as a security deposit for your future.
  5. During the period of retirement, you can use your house equity in order to gain the benefit of the reverse mortgage. Through reverse mortgages, you can get a loan against considerable equity which your heirs can later list and sell.

As we know, buying a house involves a lot of investment. The house equity works as a return on that investment. It acts as an asset. Hence, when you are in the middle of the process of buying a house, it is advisable to check the house equity value.

What to know when buying an investment property for rent?

Posted on by HomeCapital Team

Are you looking to invest in residential rental property? When chosen wisely by keeping certain points in mind, investment properties can be a highly lucrative option to reap huge rewards. However, real estate investments can be a bumpy road for people who haven’t done it before. Real estate can be difficult to navigate blind as it is filled with potential potholes that can easily trip you up and get rid of any returns. Hence, it is crucial that you perform complete research before you decide to get into the game. 

Here are some vital things to consider while buying an investment property.

1. State of the investment property

Investing in a property that needs to be fixed is a good idea, as long as you understand the money and time it is going to take to build the property to be presentable again. Once a professional has scanned your property, you need to have a thorough understanding of the number of repairs that can be done by you, and the amount that you will need outside intervention for. You also need to get a good idea of the expenditure you will encounter when you bring in professional assistance.

All the major problems will need to be addressed and fixed before you rent the property out, as it could have dire consequences if the tenant faces some distress because of pre-existing issues. So, get an estimate of the amount of time you’ll have to invest in repairing it before buying the property.

2. Neighbourhood

The neighbourhood is one of the most important elements that will dictate the kind of tenants and the number of vacancies you might encounter. In case, you choose a property that is near to a college, your tenants will predominantly be college students and you might not find it difficult to find renters during the summer vacations. You should also keep in mind that certain towns frown on rental conversions and will try to impede by adding unnecessary red tape and permit fees. However, most of the areas are quite rental friendly and are a great place to invest.

3. The 1% rule

One of the main questions new investors struggle with is the amount they should charge for rent. Many long-time investors swear by the 1% rule that basically means that you should get at least 1% of the amount you have purchased the house for in rent every month. So, if the house costs you Rs.50,00,000, you should end up with at least Rs.50,000 in rent. This isn’t a hard and fast rule. You can go higher or lower than this value as well. 

You can get an estimate of properties in the area you are looking to buy to get a good idea of the return you can expect on your property. You can of course change the listed price to suit your needs, but it does give you a good estimate.

4. Property taxes

Property tax is highly dependent on the specific area of your property, and might largely vary. So, you need to get a good idea of the amount of money you will be paying. High property taxes do not necessarily need to spell doom, as they could rein in tenants for the long term if the neighborhood is good enough. 

You can reach out to the municipal assessment bureau to get a better idea of the amount of taxes you will have to pay. Also, note if the taxes are due for a rise soon. You realistically would want to make some profit on the rent that high taxes will cut into. So keep that in mind.

Investing in a rental property can be extremely lucrative as it works as a source of income. However, you need to get a realistic idea of all the basic aspects of the rental investments before you jump in. Calculating the amount, you can charge for rent as opposed to the amount you will have to invest in it, will give you a realistic idea of the profitability you can look forward to. Keep the risks in mind too. Talk to people who have experience in this sector and who have dealt with long-term rental properties. It will help you get a bird’s eye view of the entire rental property investment industry and how it works.

Factors that make an apartment your dream house

Posted on by HomeCapital Team

We dream of buying a house is one thing and buying a house to make it a dream home is another. The making of a dream home is not just a financial transaction but a string of factors considered and addressed with perfection. It is like the symbol of a target having concentric circles and reaching the innermost one to make it a dream home. Let us begin with the outermost circle and proceed to the core.

1. Location

The outermost circle is the location of your property. It is the first important factor as it is directly connected to several aspects of life.

It has to be safe, clean, pollution-free, or with less pollution and well maintained by the local municipal authorities or by the maintenance team in case of a large residential complex.

You need to check for well-connected facilities like schools, colleges, hospitals, malls, superstores, sports clubs, gymnasiums, bus service lines, train stations, etc in your vicinity. In some cities, large residential complexes or townships have all these facilities integrated.

A low-priced remotely located apartment may be available. If you consider buying it then traveling will become an integral part of your life to reach out for all the facilities mentioned above.

2. Position of the apartment

You need to ensure that the tower having your apartment has enough open spaces surrounding from all sides, more the better protecting your apartment’s privacy. Do check the interior plan for position and direction of windows to ensure a good cross-ventilated environment.

3. Construction quality

Before you book your apartment, it is a must-do check about the construction quality. When the construction is in progress, you can check the soil quality and waterlogging reports consulting to the contractor and in your neighborhood as well. Post-construction you need to check for the absence of leakages, cracks, and seepages. Also, check bathroom fittings, door bolts and knobs, other electrical fittings are properly installed.

4. Daily utility infrastructure

A check of 24/7 supply lines of gas, water, and electricity should also be done. These are the essential daily utilities and cannot be compromised. Do check whether the sewage lines and building drainage systems are properly installed. All these details can be procured from the maintenance department.

5. Security features

Buying an apartment at the perfect location isn’t enough and complete till it is completely secured with the security and surveillance systems. You need to check that the apartment is well equipped with trained security personnel from reputed agencies and the building perimeter, as well as the entrance and floor lobbies, are covered with surveillance cameras. In addition, also check whether a multi-apartment video door system has been installed and is fully functional. 

6. Car parking

Check whether your apartment has dedicated car parking. A covered one is better than an open one. In general, also check for whether your building premise has ample parking so that your visitor can also use it and for additional parking if you own more than one car.

7. Eco friendliness

An eco-friendly apartment will cost you slightly more but it will surely give you long-term benefits to enjoy.

Eco-friendly residential apartments are homes reducing the carbon footprint and energy use. They conserve energy and natural resources with various systems installed as mentioned below

i. Solar power solution: Roof-mounted solar panels are used to provide electrical power for communal areas, elevators, and water pumps. This solution saves energy and achieves a substantial reduction in electricity bills over a period of time.

ii. Water conservation: Systems like rainwater harvesting, sewage treatment plants, and water
recycling systems.

iii. Solid waste management: The system segregates the type of wastes clearance dispatch.

iv. Energy efficient lighting systems: You need to ensure that LED lighting systems are used which save more than 50% energy.

8.  On-site maintenance

Trained and efficient on-site maintenance personnel must be present to address any household issues like plumbing, electrical, mechanical, etc in real-time on just a phone call. This will maintain your mental peace as you do not have to rush to find someone to fix these issues.

9. Fitness, sports and recreational facilities

An apartment becomes complete when it has a gymnasium, spa, sports club, jogging track, and children’s play area to keep them fit.  A part of the recreation area is generally dedicated to senior citizens where they can sit and enjoy some fresh air and enjoyable conversations.

10. Interior designing

You need to consider 15-20% of the purchase value to have your apartment designed by a professional interior designer. This will be your finishing step to make your apartment, your dream house.

Finally, the making of your dream home is a smooth process with the systematic approach mentioned above.

What is the difference between A Khata and B Khata property tax?

Posted on by HomeCapital Team

Property tax is a mandatory payment following the property purchase. In Bangalore, property tax is termed as Khata or Khata property tax. It is a legal document often called a Khata certificate or extract representing the property assessment account.

Prior to the formation of Bruhat Bangalore Mahanagara Palike (BBMP), several properties lacked proper approval from the relevant regulatory authority. Hence, many unauthorized properties took the benefit of using civic amenities despite avoiding the tax.

What is Khata Property Tax and what is A khata and B khata

It is a legal document maintained by BBMP, also called Khata certificate or extract. It contains property details like built-up and carpet area along with its demarcations, owner’s details like name, address, age, and property tax ID.

Significance of Khata Property Tax

Khata document is a master document that is required for almost everything you deal in related to land or property. It is required when you plan to sell your property or to build one. Also, it is essential to get your building plans approved as well as loans. It is also required to get your utility connections like gas, electricity, and water. It reflects the detailed credentials of an owner like that as a case paper to a doctor.

Eligibility to apply for a Khata, its procedure and charges

Once you own a property in BBMP jurisdiction, you are eligible to apply for the Khata property tax certificate.

Procedure to apply for Khata and charges

1. You need to have a notarized attested sale deed copy.

2. Encumbrance Certificate from Sub Registrar Office must be obtained.

3. From the BBMP website, download and fill in the Khata Registration Form. This is also used for property transfer or modification.

4. Submit the registration form with the relevant documents either online or offline to a BBMP office. 

5. You can check the status of your application online or by visiting a BBMP office after every 2 weeks.

6. After processing your application, a revenue officer from BBMP will visit your property for assessment.

7. Thereafter, a formal statement of property details will be issued to you. Then you need to pay 2% of the property value as the Khata registration fee.

8. Once you pay the registration fee you will be informed to pay any pending property taxes and a Khata extract will be issued in your name. A fee of ₹ 125/- for the copy of the Khata certificate and the extract is incurred.

Types of Khata property taxes

Property tax documents are categorized into two types – A Khata and B Khata.

A Khata

This is a permanent legal document indicating that the property owner has complied with the BBMP rules and regulations for property, land, and taxation in Bangalore.

A Khata owner can apply for building approvals, trade licenses, construction, and renovation permit. The owner can apply for bank loans and can easily sell or transfer the property. Finally, the owner also gets full access to the benefits provided by BBMP.

B Khata

This is a temporary document issued by BBMP for the properties not complying to the BBMP regulations and norms.

Therefore, the B Khata owner has several restrictions as below

i) Cannot apply for a bank loan

ii) Cannot apply for any building plan approval, construction, renovation and extension permits, trade licenses etc.

iii) Very difficult to sell or transfer the property

iv) Obtaining gas, water, and electricity supply is also difficult

v) Cannot avail of the BBMP benefits as a property owner.  

vi) No legal rights

Can a B Khata property be converted to A Khata?

Earlier, only the properties with minor variations from the accepted BBMP norms and regulations were eligible for conversion to A Khata. However, last year’s proposal of converting every B Khata to A Khata to boost the city revenue has been put up to the State Government and will be approved and launched soon.

B Khata property can apply for conversion to A Khata after the owner clears all the property dues and taxes and pays the betterment charges to BBMP

What are the documents needed for converting B Khata to A Khata

List of the documents required for conversion to A Khata

i. Khata extract

ii. Title deed and sale deed

iii. Property tax receipts

iv. Property block and location plan

v. Property plan with detailed dimensions and specifications

vi. Receipt of any improvement charges paid

vii. Occupancy certificate

Khata conversion process

Please find the steps below

1. Visit –http://sakala.kar.nic.in/online/bbmp/registration.aspx

2. Login with your details and click on the Khata transfer option

3. Input the relevant data and upload all the compulsory documents

4. A Sakala number will be generated which you can use to track the status. You will receive SMS alerts and be notified once your extract is ready. You can then download the same. 

B Khata properties enjoy some of the rights as A Khata properties but the recent Karnataka High Court order passed in December 2014 removed any legal status it had. Currently, B Khata properties are categorized as illegal properties and have to be converted to A Khata properties to avoid complications in trading, construction, and transferring of the property