Home For Sale: Understanding GST In Under-Construction Properties

GST rate can vary based on the property's location and value, with different rates for different housing.

Home loans for first time buyers

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Buying a home is a monumental milestone in one's life especially when you're a first-time homebuyer. The journey is filled with excitement, challenges, and financial commitments. Even though the real estate market in India is thriving, it's becoming increasingly challenging for an average young Indian to afford their dream home due to the soaring prices.  

Another challenge in this journey is to choose the right kind of property to invest in. Ready-to-move in properties look more appealing but under-construction properties are usually more affordable, allowing buyers to benefit from lower prices and extended payment timelines.  

There are several other hurdles faced by first-time homebuyers. Here are some ways that can help you save and accumulate the funds needed to make your homeownership dreams a reality. 

Understanding the Real Estate Market 

With property prices continuing to rise, owning a 2BHK house in a metropolis has become a daunting task. The National Housing Bank (NHB) recently released data showing that house prices across India increased by 4.56% in the first quarter of 2023 compared to the same period in the previous year. This follows a trend of year-on-year increases, with growth rates of 2.79% in Q4 2022, 4.52% in Q3, 3.45% in Q2, and 1.8% in Q1.  

Increasing urbanization, limited land availability and growing demand have all contributed to the escalating costs. These factors make it essential for prospective homebuyers to plan their investments wisely and seek financial assistance where possible. 

Saving through GST 

One avenue for potential homebuyers to save money is through the Goods and Services Tax (GST). Under the current tax administration system, purchasing an under-construction property is subject to GST. It is important to note that the GST rate can vary based on the property's location and value, with different rates for affordable and non-affordable housing. Thus, it is wise to explore this avenue.  

Obtaining an OC Certificate 

Another vital aspect of the homebuying process is obtaining the Occupancy Certificate (OC) for your property. An OC is a document issued by the local municipal authorities, confirming that the property complies with all safety and quality standards. It is essential to have an OC when booking an apartment in a project that is under construction. 

Having an OC certificate is beneficial for several reasons: 

Legal Assurance: It ensures that your property is legally safe to occupy, protecting you from potential legal complications. 

Property Valuation: An OC can enhance the market value of your property, making it a worthwhile investment. 

Peace of Mind: You can move into your new home with the peace of mind that it adheres to the necessary safety and quality standards. 

Accrue And Save With A Life Insurance 

While navigating the complexities of the real estate market, it's crucial to safeguard your financial future. HDFC Life Smart Protect Plan is a versatile life insurance policy that can serve as a robust savings tool, helping you achieve your homeownership goals. Here's how it can benefit you: 

• Boost your fund value with 4 kinds of Loyalty Additions (return of 2X to 3x mortality charge, return of 2x premium allocation charge, return of fund management charge and return of 2x of Investment Guarantee Charge).  

• Get a Minimum Assured Benefit in the form of capital guarantee despite market fluctuations. 

• Choose from 6 funds to optimize your investment returns. 

In conclusion, the dream of owning a home may seem challenging. However, with careful planning, smart financial decisions, and the support of a robust life insurance policy like HDFC Life Smart Protect Plan, you can make your homeownership dreams come true. Invest wisely, navigate the real estate market with confidence, and secure your future with the right financial tools. Your dream home is closer than you think.