Independent House / Villa

Question 1

Answer

If you want to live alone with your family, and not have several neighbors as in an apartment, then you must choose an independent house. You must choose the property and then you can have an independent house or a Villa constructed on it.

The independent house or a Villa is going to cost you much more than an apartment.

Remember: In an apartment you get a number of amenities such as the parking lot, security guard or a power back up system. In an independent house, you will have to arrange for all these amenities yourself. This would mean a higher cost.

Your repayment of the principal amount of the home loan (EMI Principal), up to 1.5 Lakh per annum, is eligible for a tax deduction under Section 80 C. You are eligible for a tax deduction of INR 2 Lakhs per year, on the interest you pay for your home loan, if your property is self occupied under Section 24.

Question 2

Concepts & FAQ's Independent House / Villa

Concepts & FAQ's

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What is an Independent House/Villa?

An independent House is a private residence constructed on an independent plot of land. Normally luxury independent houses constructed by builders/developers for sale are called as Villas. Depending on the location constructing an independent house/buying a villa can cost quite a hefty amount.

Why invest in an independent house?

Investing in a plot and building an independent house can be less expensive than purchasing a residential apartment. The construction can be placed according to individual needs. Creativity and designing of the house can be tailor made to suit needs. Any major expansion can be postponed till the financial situation improves unlike a residential apartment where the construction is completed in one go.

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Things to note when constructing an independent house

Hash Inspect the site and get it marked for dimensions. Any encroachment might lead to litigations and problems in the future.
Hash Check the electrical and plumbing points.
Hash Meet the architect once every week to review the progress of construction. Plan ahead for the next week. Always budget for unplanned expenses.
Hash Have an expert independently check the materials of construction used such as bricks, iron and steel and wooden supports.
Hash Make sure the support staff involved in the construction such as the plumbers, electricians and carpenters do the work as per required standards.

Why invest in a Villa?

A villa commands a premium price because they are basically less in number. The constant demand for villas comes from an increasing urban population with very good incomes. The higher demand and lesser supply of these villas raises its price and investors make a profit. Unlike other properties its appeal increases with the passing of time.

Non resident Indians who intend to create a safety zone in case they have to return to the country are showing keen interest in villas. Non resident Indians mainly look out for high end apartments and villas as they provide high returns with time.

Villas have a high demand in the second home market and as a holiday home. The affluent seek villas which are built according to their tastes and preferences. Developers take responsibility for the maintenance of these villas.

Things to note while purchasing a villa

Hash Always go for a reputed builder as the quality of construction can be trusted as they have a reputation to protect.
Hash Check for a suitable location and visit various villas of the builder both big and small.
Hash Check the circle rate of properties in the vicinity of the villa.
Hash Check to see the occupancy rate of these villas. If the number of owners staying are few it means things have not been established yet in that area.

How is the purchase of a villa financed?

Many of the developers have financing tie ups with banks which help in the sanctioning of home loans for the villa. About 25% of the cost of the villa needs to be financed by the borrower and the remaining amount will be sanctioned based on the eligibility criteria of the borrower. Generally 60 times the net monthly income can be availed by the borrower up to 45 years of age.

Tax Aspects Involved while taking a loan for the purchase of a villa/ Independent house:These are same as the purchase of a plot of land used for construction and residential purposes.

Frequently Asked Questions

In a home buying procedure, which fees are payable by the buyer?

The following fees are payable by the buyer:
Hash Origination fees
Hash Insurance impounds
Hash Appraisal fees
Hash Discount points
Hash Credit report fees
Hash Escrow payments
Hash Interest adjustment fees
Hash Homeowner's Association Fees
Hash Mortgage insurance impounds
Hash Prepaid insurance
Hash One-time mortgage insurance premium (for FHA mortgages)
Hash Tax impounds
Hash Title insurance policy fee
Hash Documentation fees

If you are a first time home buyer, what are the essential steps that you need to follow?

Hash * Save money.
Hash Do some homework.
Hash Check your credit report for probable mistakes.
Hash Become pre-approved for a mortgage.
Hash Collect some data on current real estate deals and make a comparison.
Hash Take the help of a realtor (real estate agent)

What is the amount of down payment necessary to buy a house?

Usually, a down payment of 20% is required by traditional lenders. However, you can make a lower down payment in case you obtain private mortgage insurance (PMI). You can make a down payment as low as 5% through utilizing PMI.

Is it necessary to have my own agent while buying a house?

Most real estate experts will suggest that buyer be represented by an agent. Let us look at the reason because of which it is suggested: The real estate commission is basically paid by the seller & the commission amount is already mentioned in the listing contract. And when the buyer doesn't have his own agent, the same agent can represent both seller as well as the buyer, working as what is known as "dual agent".

I have a flat which I want to sell and buy a new flat which will be bigger in area. What are my tax implications with regard to capital gains?

On the proposed sale of your flat you may purchase another flat within two years of the date of sale of the original flat. If you have invested the entire amount of capital gain irrespective of your area of the flat, you would not have to pay any capital gains tax.

Can foreign citizens of Indian origin acquire or dispose of residential property by way of gift?

Yes. Reserve Bank has granted general permission to foreign citizens of Indian origin to acquire or dispose of properties up to two houses by way of gift from or to a relative who may be an Indian citizen or a person of Indian origin whether resident in India or not, subject to compliance with applicable tax laws.

Can foreign citizens of Indian origin acquire commercial properties in India?

Yes. Under the general permission granted by Reserve Bank properties other than agricultural land/farm house/plantation property can be acquired by foreign citizens of Indian origin provided the purchase consideration is met either out of inward remittances in foreign exchange through normal banking channels or out of funds from the purchasers' NRE/FCNR accounts maintained with banks in India and a declaration is submitted to the Central Office of Reserve Bank in form IPI 7 within a period of 90 days from the date of purchase of the property/final payment of purchase consideration.

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Independent House / Villa Articles

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Independent House / Villa News

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Solar heaters must for buildings in Karnataka: HC

Tuesday, October 3, 2017, 6:29 PM

The Karnataka High Court has rejected a petition which challenged the rule that makes solar water heaters mandatory for new houses. A resident of Kalaburgi had challenged the rules alleging that it violated fundamental rights — and discriminatory — as only those who build houses above a certain limit had to install them. The HC, however, found no substance in the arguments.

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Wednesday, September 6, 2017, 8:52 PM

Engineering firm Capacit'e Infraprojects' Rs 400 crore initial public offer (IPO) will be launched on September 13. The issue, with a price band of Rs 245-Rs 250 per equity share, will close on September 15. The company, which is focused on construction of residential, commercial and institutional buildings, had reported a turnover of Rs 1,157 crore in financial year 2017.

Plot promoters in TN to also face action under real estate act

Friday, May 19, 2017, 11:07 AM

Union urban development minister M Venkaiah Naidu warned last week of penal action against realtors dishonouring their promises. But it's not just builders who face punitive measures under the new Real Estate Act. The ambitious legislation, which came into effect on May-1 across the country, also deals with plot promoters. The act is yet to be enacted in TN as the state government has not ratified the draft rules.

Xander finance invests 130 crore in Adarsh developers

Friday, May 12, 2017, 11:31 AM

Xander Finance, the non-banking finance arm of Xander Group, had invested '130 crore in Adarsh Developers' residential project in Bengaluru."We have already funded more than half of the total commitment of "130 crore provided to Adarsh.This facility is for project development for their villa projects in and around south-east Bengaluru," said Amar Merani, the CEO of Xander Finance.

RERA: #2 Builder has to keep your money in an escrow account

Monday, May 1, 2017, 10:22 AM

The common practice of builders is they receive money from buyers and then divert this money to some of their other projects. Under RERA, the developer has to transfer 70% of the money received from home buyers in an escrow account. This money would be withdrawn as the stages of construction are approved by the engineers and CA's of builders.

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Sunday, April 30, 2017, 11:23 AM

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Construction activities, real estate dull post demonetisation: BAI

Saturday, April 29, 2017, 4:18 PM

Construction activities and sales of villa and apartments across the country were very dull, particularly after demonetisation, Builders Association of India (BAI) preident, H N Vijaya Rghava Reddy said today. Though there could be many reasons for such a phase, demonetisation played a major role for sales falling more than 40% compared to last year, he said.

Vijay Mallya's Kingfisher Villa sold to actor-businessman Sachiin Josh

Saturday, April 8, 2017, 9:42 AM

Vijay Mallya's famous Kingfisher Villa has finally been sold. After failing to find any bidders at multiple auctions, lenders have agreed to dispose the property through a negotiated sale to actor-businessman Sachiin Joshi, the 32-year old actor, who owns Viking Media and Entertainment. SBI chairman Arundhati Bhattacharya confirmed that there was a sale but did not divulge the name of the buyer.

Independent House / Villa Education

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Do this before buying a house

Friday, March 3, 2017, 4:33 PM

Are you buying the house to stay there, or as an investment? If you are buying the house to reside, you need to consider your needs and your family’s needs. Get the documents of your house checked by a lawyer before you make the purchase. Buying your dream home might be the biggest purchase of your life. Do your research before making the purchase.

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Home loan EMI Calculator

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Home Loan EMI Calculator

loan summary

Monthly Payment (EMI)

24,959

Total Interest

34,90,279

Loan Amount

34,90,279

Total Payment

59,90,279

EMI payments starting from :

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What is home loan?

You can avail a home loan from a bank or a housing finance Company to buy, construct or repair/renovate your house. You have to repay your home loan in installments called EMI (Equated Monthly Installments).

What is your home loan EMI?

You avail a loan from a bank or a financial institution to buy or construct your house. You have to repay your loan in installments called Home loan EMI's.

The house loan EMI's are divided into 2 Components:

Principal component: Amount you borrow to buy the house.

Interest component: Bank charges you an amount for the money you have borrowed to buy the house called interest.
The amount you borrow to buy your house and the total interest charged by the bank is divided by the tenure of your home loan.
The tenure of the home loan can be as long as 30 years.

Know your online home loan EMI Calculator

You can calculate home loan EMI using the Home Loan EMI Calculator for different combinations of interest, Principal and tenure. A home loan EMI calculator can do these calculations in seconds with a high degree of accuracy.

Follow 3 simple steps to calculate your home loan EMI's:

Step 1: You adjust the scale to select the home loan amount availed in the home loan EMI calculator slider.

Step 2: You then adjust the scale to select the interest rate on your home loan EMI calculator slider.

Step 3: Finally you select the tenure of the home loan on the slider of your home loan EMI calculator.

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Independent House / Villa

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Concepts & FAQ's

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What is an independent house?

Tax Benefits of an independent house

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Concepts & FAQ's Independent House / Villa

What is an Independent House/Villa?

Why invest in an independent house?

Ask Wealth Doctor

Things to note when constructing an independent house

Why invest in a Villa?

Things to note while purchasing a villa

How is the purchase of a villa financed?

In a home buying procedure, which fees are payable by the buyer?

If you are a first time home buyer, what are the essential steps that you need to follow?

What is the amount of down payment necessary to buy a house?

Is it necessary to have my own agent while buying a house?

I have a flat which I want to sell and buy a new flat which will be bigger in area. What are my tax implications with regard to capital gains?

Can foreign citizens of Indian origin acquire or dispose of residential property by way of gift?

Can foreign citizens of Indian origin acquire commercial properties in India?

Independent House / Villa Articles

Know The Real Estate Bill

11 March 2016, Friday

What is a Smart Home?

06 February 2016, Saturday

Real Estate Regulatory Bill

03 June 2015, Wednesday

Risk Tolerance

24 March 2009, Tuesday

Risks Involved in Investments

24 March 2009, Tuesday

How to Buy Flat?

14 November 2009, Saturday

Difference between Bank Deposits and other Investments

21 February 2009, Saturday

Reserve Bank of India(RBI)

21 February 2009, Saturday

Credit Unions

21 February 2009, Saturday

Independent House / Villa News

Solar heaters must for buildings in Karnataka: HC

Tuesday, October 3, 2017, 6:29 PM

Capacit'e Infraprojects' Rs 400 cr IPO to open on September 13

Wednesday, September 6, 2017, 8:52 PM

Plot promoters in TN to also face action under real estate act

Friday, May 19, 2017, 11:07 AM

Xander finance invests 130 crore in Adarsh developers

Friday, May 12, 2017, 11:31 AM

RERA: #2 Builder has to keep your money in an escrow account

Monday, May 1, 2017, 10:22 AM

Realty Act rollout from May 1, but states yet to frame rules

Sunday, April 30, 2017, 11:23 AM

Construction activities, real estate dull post demonetisation: BAI

Saturday, April 29, 2017, 4:18 PM

Vijay Mallya's Kingfisher Villa sold to actor-businessman Sachiin Josh

Saturday, April 8, 2017, 9:42 AM

Independent House / Villa Education

Do this before buying a house

Friday, March 3, 2017, 4:33 PM

Calculator

Home Loan EMI Calculator

Monthly Payment (EMI)

Total Interest

Loan Amount

Total Payment

Year Wise Loan Details

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Independent House / Villa