Under construction vs ready property

Today’s real estate market is a buyers market with a plethora of options available across budgets, configurations and possession dates in most micro markets of Mumbai. With an even wider range of finance options and payment schemes, the average buyer is bound to be confused with the choices at hand. Lets look at the pros and cons of a ready possession home as compared to an under construction property.

Price:

  • Typically, an under construction property is less expensive than a ready property by up to 20%. This means that you can opt for a larger property in the same budget.
  • On the other hand, if you’re currently staying on rent, you will need to factor in the additional cost of rent till possession of the property. This is a factor that is often overlooked during the property purchase decision.

Budget:

  • Since under construction properties command a lower per square foot rate, the same budget buys you a larger home or a better locality.
  • Slowly increasing EMI’s or zero EMI outgo (in case of subvention plans) allows more flexibility and better planning in case of under construction homes.

Risk:

  • There are chances of a under construction home being delayed, or in extreme circumstances, not delivered at all. There are several unforeseen circumstances like government approvals, changes in tax regimes, cash flow issues, litigation etc that can cause a delay in the delivery of your home.
  • In the case of a ready home, what you see is what you get. You can make an informed decision after looking at the construction quality, amenities etc.

GST:

  • A ready possession home is not subject to GST. However, the increased base price of a ready home means that more often than not, it is still more expensive than an under construction property

Payment plans:

  • If you opt for a construction linked plan, an under construction home allows you some time till the full EMI starts i.e. The EMI will gradually increase as construction progresses. This means that you can factor in an increase in your income while buying the home.
  • Generally, for a ready to move in home, 100% payment is expected at the time of booking. This means that the full EMI starts immediately. In some cases, subvention schemes are also available for ready apartments and might be worth considering provided the price differential is not very high.

Tax benefits:

  • The government provides several tax incentives for buying a home – chief of which are the provisions under Section 80C and 24B for the principal and interest component of the home loan respectively. However, these benefits are only available after you have taken possession of your home.
  • In addition to this, stamp duty paid on the purchase of a home is also exempt from tax under Section 80C, provided possession for the property is in the same financial year in which the stamp duty has been paid.
  • One major tax benefit for under construction homes is that the interest paid during the construction of the home is tax deductible in 5 equal installments in the 5 years after property completion.

Tax incentives and PMAY benefits are available on the following Marathon projects:

Price:

  • Typically, an under construction property is less expensive than a ready property by up to 20%. This means that you can opt for a larger property in the same budget.
  • On the other hand, if you’re currently staying on rent, you will need to factor in the additional cost of rent till possession of the property. This is a factor that is often overlooked during the property purchase decision.

Budget:

Since under construction properties command a lower per square foot rate, the same budget buys you a larger home or a better locality.

Slowly increasing EMI’s or zero EMI outgo (in case of subvention plans) allows more flexibility and better planning in case of under construction homes.

Risk:

There are chances of a under construction home being delayed, or in extreme circumstances, not delivered at all. There are several unforeseen circumstances like government approvals, changes in tax regimes, cash flow issues, litigation etc that can cause a delay in the delivery of your home.

In the case of a ready home, what you see is what you get. You can make an informed decision after looking at the construction quality, amenities etc.

GST:

A ready possession home is not subject to GST. However, the increased base price of a ready home means that more often than not, it is still more expensive than an under construction property

Payment plans:

If you opt for a construction linked plan, an under construction home allows you some time till the full EMI starts i.e. The EMI will gradually increase as construction progresses. This means that you can factor in an increase in your income while buying the home.

Generally, for a ready to move in home, 100% payment is expected at the time of booking. This means that the full EMI starts immediately. In some cases, subvention schemes are also available for ready apartments and might be worth considering provided the price differential is not very high.

Tax benefits:

The government provides several tax incentives for buying a home – chief of which are the provisions under Section 80C and 24B for the principal and interest component of the home loan respectively. However, these benefits are only available after you have taken possession of your home.
In addition to this, stamp duty paid on the purchase of a home is also exempt from tax under Section 80C, provided possession for the property is in the same financial year in which the stamp duty has been paid.
One major tax benefit for under construction homes is that the interest paid during the construction of the home is tax deductible in 5 equal instalments in the 5 years after property completion.

Tax incentives and PMAY benefits are available on the following Marathon projects:

Ready Property:

Marathon Nextown, Kalyan – Shil

1,2 and 2.5 BHK starting 40.99L (all incl.)

Marathon Nexzone, Panvel

1, 2 & 2.5 BHK apartments starting 44L

Marathon Emblem, Mulund

3 and 4 BHK apartments

Marathon Monte Carlo, Mulund

4, 5 and 6 BHK apartments

Under Construction:

Marathon NeoHomes, Bhandup

Studio and 1BHK starting 36.84L (all incl.)

Marathon Nextown, Kalyan – Shil

1,2 and 2.5 BHK starting 40.99L (all incl.)

Marathon Nexworld, Dombivili

1 and 2 BHK starting 33L (all incl)

Marathon Nexzone, Panvel

1, 2 & 2.5 BHK apartments starting 44L

Monte South, Byculla

2, 2.5, 3 and 3.5 BHK apartments

Marathon Nagari NX, Badlapur (E)

1 & 2 BHK starting Rs.24.1L (all incl.)

Marathon NeoHomes, Bhandup

Studio and 1BHK starting 36.84L (all incl.)

Marathon Nextown, Kalyan – Shil

1,2 and 2.5 BHK starting 38L (all incl.)

Marathon Nexworld, Dombivili

1 and 2 BHK starting 36.5L (all incl)