Potential property buyers who have been waiting to buy their dream house but are facing some paucity of funds in the short-term, can seriously consider booking their property in the under-construction stage.
There are several advantages that such a customer would have. First and foremost, is the huge luxury of deferring of payments for your dream house. As the property would take a minimum of 3 years to complete, the customer can book their house and make the payment as and when the construction commences, or in certain cases, on taking possession. The booking amount would only be a small fraction of the total value.
All banks offer home loans for booking an under-construction property through their construction linked schemes. There are several developers offering to pay even the interest component of the loan till the time they give the possession to the customer, to incentivize a quick sale. As the developer is assured of a transaction, he even goes to the extent of offering a decent discount to the customer which usually is around 10 to 15 percent of the market value of the property.
A salaried property buyer can also avail tax benefits on the interest component paid during the entire pre-construction period. This can be availed after the project is complete and buyers have taken possession of their property. The value of the total interest paid is accumulated and divided into 5 equal parts and taken for tax deduction for the first 5 years from the date of final disbursement that is from possession of the property.
However, it is important for a customer looking to book a property at an under-construction stage, is thoroughly sure of the developer’s capability to deliver on time and the future prospects of the project and the location. You need to make a thorough check of the documentation of the developer before committing your money.