Buying a home is the largest investment most service professionals make in their lifetime. Hence, its important to ensure we understand all the finer details which once needs to consider for buying their dream house.
Doubts or No Doubts… we are always there for you, helping you with all your questions and needs.
Q. Why should salaried people own a house as soon as possible?
A. Salaried people get following benefits:
- Tax savings on home loans
- Home prices inflate more than the income of salaried individuals
- Investing early, protects you against the escalation of house prices
Q. Should I buy a house when I don’t know where I will be settling down?
Yes, one must buy as early as possible.
Lot of salaried employees in transferable jobs, may not know where they will settle down post retirement
If one is not sure about the location, one should still invest in a property which will protect them against the inflation of house properties.
Remember, your income does not increase in the same proportion as real estate prices changes.
Q. Should I take a home loan or not?
Lot of times we think any kind of loan is bad, we should not take a loan. It’s very difficult or almost impossible to buy a house by collecting savings and having all the money for buying a house available as down payment.However, we miss on some important aspects
Home loan is the cheapest funding available.
- It is the easiest loan to get for salaried employees.
- It offers great tax savings for salaried employees.
- Only way to protect against price escalations on real estates demonstrations, lectures, speeches, reports, and more.
Q. What is the difference between long-term Capital Gains and short-term Capital Gains
If the house is held for less than three years prior to its sale, it is termed as a short-term capital asset and any gain arising from the sale is treated as a short-term Capital Gain.
There are no tax exemptions for short-term Capital Gains and one need to pay it according to the applicable tax slab.
However, if the property is sold after holding it for more than three years, it is treated as a long-term capital asset and the gain arising from it is called the long-term Capital Gain. Such gains attract a flat exemption rate of 20
Q. What is the right EMI I should look for with respect to my earnings? Earnings to EMI ratio?
Generally, it should be 50% of your EMI. In initial years it can go upto 60%-65% as well.
Remember, your income will increase but mostly EMI will remain constant.
Q. What are the taxes that I need to pay before buying a property?
The buyer needs to pay the following taxes:
TDS or tax deduction at source on amount exceeding Rs 50 lakhs for the purchase of property excluding agricultural land.
Stamp duty and Registration charges.
GST – Applicable if the property is being purchased from the builder who conceived and constructed the project before offering possession to the buyer. If a ready to move in’ property is purchased from the seller, GST is not applicable.
Value Added Tax (VAT) – If applicable in the concerned state.
Q. Ownership ? What is the difference between leasehold property and freehold property?
The difference between a leasehold property and a freehold property lies in its ownership . In a leasehold property, the ownership remains with the concerned local authority or the government (as the case may be). The lease period varies typically between 30 to 99 years. But, this does not prevent the individual owner from selling or performing other transactions with the property, provided the lease deed is registered.
In case of a freehold property, the owner of the property is the legal owner and can sell/lease/rent the property as per his/her wish .
Q. How could I verify that the documents shown to me by the seller are genuine?
Projects approvals can be verified from the RERA site ,corporation or the sanctioning authority’s office
Ownership documents can be confirmed from the Sub Registrar’s office where they are registered
Share certificate related to societies can be verified from the concerned Society itself
Q. What documents should I check before buying a new property?
- Clear and marketable Title
- Sale Deed
- Encumbrance Certificate
- Latest tax receipts
- Occupancy Certificate
- Building Plan Approvals and Possession Certificate.
Q. Can I sell the property, even when the home loan is outstanding?
Yes, you can sell the property with the consent of the banking institution.
If the buyer wants to take a loan to buy the property, the process is much easier if he approaches the same bank. In these cases, the bank does not need to release the property papers to another bank before getting the payment.
If the buyer wants to make a payment outright, he can make it to the bank directly. The property papers will be released only after the bank has recovered the entire loan amount.