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Under-construction Vs Ready-to-move-in home: Know which is ideal for you  |  February 10, 2020

ET Now Digital New Delhi

With developers leaving projects incomplete and a lot of people not getting the possession of their house on time, Indians nowadays have become extremely cautious when it comes to buying a house. Because of Amrapali and other incidents in the past, people have lost faith in developers and are hesitant to put their money into under-construction projects as they are afraid of not getting their house on time.


Note that it is no secret that the housing market is one of the most stable and important elements of any modern economy. In fact, the real estate sector is one of the chief drivers of GDP. According to “India Brand Equity Foundation,” a trust established by the Department of Commerce, Indian Ministry of Commerce and Industry, the real estate sector in India is expected to reach a market size of $1 trillion by 2030.


Housing is a basic need, however, while planning on investing in real estate, people are now not sure whether to buy a ready-to-move-in house or to buy an under-construction property.


What is a ready-to-move-in home?


It is one that is ready for immediate occupancy meaning all the construction is complete and the house is ready for the owner. This means the buyer saves himself from the risk of delays or closure. In case of such property, the buyer also does not have to bear the dual burden of paying the rent and EMIs at the same time. Buying a ready-to-move-in property seems like a win-win decision, regardless of whether you actually move in or not.


Advantages of buying a ready-to-move-in house:


Also, if you are an NRI investor planning to buy a home with the intention of earning rental income, purchasing a completed project helps you start renting the property immediately and earn returns without any delay. Another benefit of a ready-to-move-in home is that the investors don’t have to pay GST.


Note that GST of 5% is applicable on an under-construction property for new projects started after April 1, 2019, charged over and above the property value. This means that if you are buying an under-construction property valuing of say Rs 60 lakh, you will have to pay Rs 3 lakh as GST. This GST is not applicable to a ready-to-move-in property, which reduces the overall cost.


Disadvantage of buying a ready-to-move-in house:


It is no secret that ready-to-move-in homes or those nearing completion are costlier compared to under-construction projects. Sometimes the cost of a ready-to-move-in house can be up to Rs 5 to Rs 7 lakh more.




While the cost of a ready-to-move-in house is definitely higher, this difference is very easily offset. Nowadays, many developers even offer incentives such as waiving off stamp duty and registration and freebies like modular kitchens, essential fittings and reserved parking space etc on ready-to-move-in properties. Aside from this, if you choose wisely and opt for a well-connected location, you can expect a great rental income, which will justify the extra money you pay for a ready-to-occupy home.


It is worth mentioning that in the post-RERA regime, developers are now expected to strictly adhere to the timelines. Developers, making a provision for project delay, have listed completion dates of 4-5 years for projects. Waiting for such a long period can be problematic and this makes ready-to-move-in properties the ideal choice for the NRI investor, looking for zero-risk investment and immediate access to a home that they can rent.


Another advantage of buying a ready-to-move-in home is that what you see is what you get. You can easily check out the neighbourhood, available infrastructure and amenities around the area, connectivity to other parts of the city etc.