One of the critical decision that buyers have to make while buying a property these days is whether to go for an under-construction property or to buy a ready-to-move-in home. Both have some pros and cons and depending on buyer preferences, he can opt for either of the two or even choose a safe ground by opting for a property which is close to completion. As per IndiaProperty.com, buyers’ preference data for the past 3 years (2015, 2016 and 2017) shows that on an average, 30% of the buyers prefer to opt for an under-construction home and the rest prefer a completed or ready-to-move-in home. This trend was witnessed pan India.

When buying an under-construction home, the buyer has to wait for a few years to get possession. He might have to pay both the home loan EMIs and the rent during this tenure. It is slightly more risky as there is a possibility of the project getting delayed or stalled because of unforeseen circumstances. But with RERA coming into action, buyers are protected against projects getting delayed beyond a certain limit or the funds being used elsewhere.

Even though under-construction projects usually come at a lower price compared to a completed project, a buyer should always check builder’s track record in terms of project delivery and quality of construction. Since it’s easy to check the quality of construction in an under-construction project, the buyer can take a call by visiting the project site. Flaws can be hidden in a completed projected easily. It’s best to take help of an expert to check the quality of construction while making the final decision. A quick survey of some of the existing completed projects by the developer would also help.

Under-construction homes are also not eligible for income tax concessions till possession. Also, under construction properties levy recently-implemented Goods and Services Tax which is not applicable on completed projects.

Some of benefits of buying in a new project includes – 1) discounted or competitive price, 2) no need to pay the whole amount at once, so dependence on home loan reduces which over the long run reduces the overall cost of acquisition for the property, 3) Can get non-structural alterations done during construction itself which is not possible in case of a competed project, 4) interior décor and finishing materials can be as per buyers’ preference, 5) all the projects post 1 May, 2017 need to be registered under RERA. So, under-construction projects are protected as per fair trade practices of RERA and buyers can also get regular project updates online.

A ready-to-move-in house comes at a higher per square feet price. The buyer needs to fish out all the funds in one go and in most of the cases, end up taking a higher home loan. A completed home is risk free when comes to project delivery, taxation GST etc., but the buyer has limited scope of changing the house plan and interior finishing unless he opts for a major reconstruction.

(By Ganesh Vasudevan, CEO, IndiaProperty.com)