" There is no greater feeling than walking on your own land. "

Residential Land

What is residential land?

Residential land commonly called a land plot is purchased to construct a house or even as an investment.

Can you avail a loan to purchase residential land?

Only 60-70% of the value of the land can be obtained as a loan from the bank or a housing finance institution and the rest of the amount needs to be financed by the buyer. Banks compute the value of the land based on the circle rates in the area. The maximum tenure of the loan is 15 years which depends on your retirement age.

The land boundaries need to be clearly demarcated and registered with the municipal Corporation. The land needs to have a clear marketable title so that it can be pledged as collateral for the loan. The land needs to be purchased from a developer or a society and not from an individual owner to get the loan sanctioned.

The amounts are disbursed to the seller of the land and not to the buyer unless an amount is paid by him. If the loan is taken for the purchase of a plot in another city the bank's branch present there checks the details of the property. If the bank has no branch in the city of purchase then the loan will not be sanctioned.

Why invest in Residential Land?
The Price Increases

The Price Increases

If you buy land on the outskirts of an upcoming or a developing city, its price increases with time and you can sell at a profit.

You Save on Tax

You Save on Tax

You can avail a home loan, to buy land and construct your home. You get tax benefits, on the land on which your home is constructed.

Exiting is Easy

Exiting is Easy

You can easily develop your plot of land, when compared to a residential apartment. It is easy to sell your land, as compared to an apartment.

Not Affected by Time

Not Affected by Time

Your plot of land is not affected by time. Your apartment ages and its structure weakens, with the passing of time.

Encumbrance Certificate

You need to check if the plot of land has an encumbrance certificate. The land you buy may have been mortgaged as a security (debt) to a bank or a third party. The seller may have mortgaged this land as a collateral for a loan. The encumbrance certificate states that the land is free from any mortgages debts or legal problems (litigation).Remember to check for these documents while making the purchase of a plot of land.

Check these documents while buying land

The Title Deed

The title deed of the plot of land needs to be clear and marketable. The title deed (proving ownership of the land) needs to be in the hands of the seller of the plot of land.

You can trace the ownership of the land using the title deed. Who the previous owners were? The change in ownership of the land (as it is transferred between owners as a gift , sale or an inheritance).

Always examine the original title deed of the land.

Sale Deed

A sale deed of the plot of land gives the seller the right to sell. It transfers the ownership of the plot of land from the seller to you.

Make sure that the seller of the plot of land has the sale deed (The right to sell the land to you).

DC Conversion

You have to make sure that your plot of land has been converted from Agricultural land to Non Agricultural land. This is also known as the land use conversion (DC Converted land).

Only a DC (Deputy Commissioner) can convert the agricultural land to a non agricultural land and this land is called DC converted land.If your plot of land is not DC converted then you will not be able to get an A Khata certificate for it .It has a B Khata certificate.

The Khata

The word Khata means "account". Khata helps you find out the details of the property from the Municipal registrar. It means the owner of the land is paying his property tax.

You have A Khata properties and B Khata properties.

A Khata properties come under the BBMP (Bruhat Bengaluru Mahanagara Palike) jurisdiction and signify a legally developed land with valid sanctions and approvals.

B Khata properties are within municipal limits (BBMP) or outside municipal limits without valid licenses and sanctions. The B Khata does not actually exist. It is merely a record maintained by the BBMP in a B Register. Your record in the B Khata does not give you ownership of the property but merely states that you are paying your property/land tax.

You can convert B Khata to A Khata by paying a penalty to the Government.You need to make sure that the plot of land you purchase has an A Khata certificate to avoid any hassles.

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