Why is registration of property mandatory?

Every transaction of the Real estate needs to get registered for the sake of security for both buyer and seller. Registration of property is not only legally mandatory but is a document of terms & conditions and the amount at which the deal was affected. Registration of property is also necessary as it is a document of contract and registration of a contract is beneficial to all parties of the contract.


The law for registration of documents is provided in the Indian Registration Act. This legislation provides for the registration of various documents, to ensure conservation of evidence, prevention of fraud and assurance of title.


Section 17 of the Registration Act, 1908, mandates registration of all transactions that involve the sale of an immovable property for a value exceeding Rs 100. This effectively means that all the transactions of sale of immovable property have to be registered, as no immovable property can be purchased for merely Rs 100. Likewise, all transactions of a gift of an immovable property, as well as the lease for a period exceeding 12 months are also mandatorily required to be registered.



In special cases, when a party to the transaction cannot come to the sub- registrar’s office, the sub-registrar may depute any of its officers to accept the documents for registration, at the residence of such person. The term ‘immovable property’ includes land, buildings and any rights attached to these properties.

Procedure and documents required

The property documents that need to be registered should be submitted to the office of the Sub-Registrar of Assurances within whose jurisdiction the property, which is the subject matter of transfer, is situated. The authorized signatories for the seller and the purchaser have to be present along with two witnesses, for registration of the documents.

The signatories should carry their proof of identity. Aadhaar Card, PAN Card, or any other proofs of identity issued by a government authority are the documents that are accepted for this purpose. The signatories representing someone else will also have to furnish the power of authority.  In case a company is party to the agreement, the person representing the company has to carry adequate documents, like a power of attorney/letter of authority, along with a copy of the resolution of the company’s board, authorizing him to carry out the registration.

You need to present the property card to the sub-registrar, along with the original documents and proof of payment of stamp duty. Before registering the documents, the sub-registrar will verify whether adequate stamp duty has been paid for the property, as per the stamp duty ready reckoner. In case there is any deficit in the stamp duty, the registrar will refuse to register the documents.

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Time limit and fee payable

Documents that have to be mandatorily registered should be presented within four months from the date of their execution, along with the requisite fee. In case the time limit has expired, you can make an application to the sub-registrar for condonation of the delay, within the next four months and the registrar may agree to register such documents, on payment of a fine that may be up to ten times the original registration fee. The registration fee for property documents is 1% of the value of the property, subject to a maximum of Rs 30,000.

Earlier, the documents that were presented for registration, would be returned to you after a period of six months. However, with computerization of the offices of sub-registrar, the documents (bearing the registration number and proof that the documents have been registered by the registrar) are scanned and returned to you on the same day.


Impact of non-registration

Failure to register the purchase agreement of a property could put you at a high risk. Any document that is mandatorily required to be registered but is not registered, cannot be admitted as evidence in any court of law.

Which is better option : Real estate investment in an upcoming or a developed area.

Prices in real estate are subject to the location of the property. The more posh the address is more is the cost of land, The quality of infrastructure is also a crucial factor in the determination of property’s prices. There are many more price determinants that decide the cost of the property. Here we shall take a review of such elements.

As discussed above the prices of land in a posh locality are subject to the demand of the seller. Here, the buyer has very fewer chances of price negotiation. Resultant, buyers opt for an upcoming location that offers lower rates. But, buyers should also consider the potential and price appreciation, habitability of the area and its infrastructure before making an investment.

Rapid urbanization has led to the emergence of new suburbs and peripheral areas around metropolitan cities. These newly-created residential markets have their own set of development types (apartments, row houses, villas and plots), price points (affordable, mid, premium and luxury) and buyer-investor categories. However, the moot question is whether these new destinations offer a safe option for property investment.

The biggest advantage of buying a house in an upcoming residential destination is the relatively affordable price of units. Often, apartment projects in an upcoming region, come with inaugural discounts to lure early investors. Prospective buyers can strike a good bargain here. However, investing in such locations also has its own set of risks.


Negligible appreciation for a few years

An upcoming area is likely to lack certain necessary basic infrastructure. Hence, appreciation in property prices may be zero or negligible for several years. There could be multiple reasons for this, such as delay in the construction of a connecting road or surrounding infrastructure. It is a big risk for those putting in their money. Usually, it is advisable to put money into established properties and localities.


Construction hassles and habitability

An upcoming region where a number of developers are constructing their projects may not be habitable for several years. While apartments may be ready, the constant movement of heavy construction vehicles, dust and poor road conditions may make such areas inhabitable. A Person who buys  a flat in an upcoming area always plans to shift only after one or more year due to these problems, even though his flat is ready. While a few towers in the project are ready for possession, towers and projects nearby, are still under-construction. Thus he prefers to live on rent for such period.


Out of the many developers in an upcoming area, very few developers complete and offer possession to buyers. Many real estate brokers state the upcoming areas will take around 4-5 years to have the quality basic infrastructure, similar to developed areas.


What should you do?

While there are risks and challenges, there is a price advantage when it comes to making a real estate a viable investment in an upcoming area.If you are undertaking a property search, weigh your options before investing in an upcoming suburb that is far away from established localities. While the house may cost less, you may have to spend more on your daily commute.

Also, check the proximity to amenities and other developed localities. Localities that have a supermarket, a school, access to a major expressway or a train line, and local shops within a four-five kilometer radius, are likely to become future hubs for homeowners.




Provident Fund – An easy and cheap option for home finance

Provident Fund is a corpus on which every salaried individual relies upon to meet contingency and big expenditure. Although a majority of the salaried individual have a provident fund account, only a few are aware that they can withdraw from this fund, for various purposes connected with a house.


For purchase of a house or plot or for construction of a house

Under the Provident Fund scheme, an employee can withdraw money from his provident fund, after completion of the contribution of five years, for the purchase of plot and/or construction or purchase of a house. The loan can also be taken for the construction of a house on the plot of land owned by you or your wife, or jointly by both. The loan amount would depend on the purpose for which you are taking the loan. For purchasing a plot, the loan available shall be restricted to 24 months’ basic salary and dearness allowance (DA), subject to a maximum of the lower of either the balance in your provident fund account or the cost of the plot.

home on plot

In case you want to avail of the loan, to purchase or construct a house, availability shall be enhanced to 36 months of basic salary and DA, with the maximum again subject to lower of balance in the provident fund account or cost of the house. It is pertinent to note that the property cannot be purchased jointly with anybody else, except your spouse, for withdrawing from the provident fund.

In case you withdraw from your provident fund account, the construction should begin within six months and be completed within 12 months of the withdrawal. In case you intend to buy a ready house, the purchase also needs to be completed within six months. The withdrawals for purchase/construction can be made in one or more installments, depending on the circumstances.


For addition/improvement of the house owned by self and/or the spouse

You are also entitled to withdraw money from your provident fund account, for making additions or improvements to a residential house that is owned by you or your wife or jointly. This withdrawal can only be availed, after five years from completion of the house. It is not necessary that the house for which you want to carry out the improvements should be the same, on which you had availed the withdrawal facility. This withdrawal for improvement can be availed, even if you have not availed of the withdrawal facility for purchase or construction of the house. The amount that you are eligible to withdraw, for improvement or addition, is restricted to 12 months’ basic salary and DA, subject to lower of the balance relatable to the employee’s share of interest in your account or the cost of such improvement.


You can also avail of the withdrawal facility again, only after 10 years from the first withdrawal, subject to the same eligibility criteria, vis-à-vis the amount.

Advances for repayment of housing loan

The provident fund scheme allows you to avail of the withdrawal facility, for repayment of the outstanding balance in a home loan taken by you or your spouse for the above purposes. The advance amount cannot exceed 36 months of basic salary and DA. This withdrawal can only be made for loans, availed either by the members or by the spouse, from specified entities like governments and state government, registered co-operative society, state housing board, nationalized banks, public financial institutions, municipal corporation, or any development authority, for the purchase of a house.

home loan

So, when you are on the outlook for the options for financing a new house purchase, construction on plot or repair, renovation or alteration to existing home which is in your or spouse’s name, then, Provident Fund is a viable option which one can explore.


The pros and cons of buying a distressed property

The real estate sector in India got a fillip when the process of home loans became liberal and easy. This liberalisation has helped cherished dream to own a home became a reality for a common Indian. Now, as we all know that upon fulfilling certain parameters one is entitled to a home loan by Banks and Financial institutions. The applicant has though to go through a very strict scrutiny by loan giving institution but there are cases when the loanee defaults in servicing of the loan and when the banks or financial institutions take over the property for recovery of the loan then it is termed as distressed property.home_loans

Distressed properties are rare, as less than 5% of Indian borrowers default on their obligations, for periods long enough to warrant a bank auction. Property owners who have only a few cycles left to repay would prefer to restructure the loan rather than default on payment. The base price for the auction is determined by the loan amount outstanding – the further along the owner is in the loan term, the lower the base price.

Red Foreclosure For Sale Real Estate Sign in Front of House.

Information, regarding the auction of distressed properties, can be obtained from banks’ advertisements in leading local newspapers, the schedules/annexures in banks’ annual reports, and from property consultants with expertise in the location.

When a bank places a property for auction, one needs to read the bid document carefully. This document contains all the facts covering the legal title and responsibility for pending dues. Generally, the property is sold on an ‘as is where is’ basis and till the date of the auction, dues are cleared.


Buying through a bank auction

The bank will first release an advertisement, setting a date for the auction and invite bids. It will then collate the offers and finally decide whom to sell the property to. It can be a cumbersome process if the buyer requires a home loan too. Moreover, the bank has to conduct a due diligence search on the incoming buyer, draw up contracts to transfer the property and obtain a go-ahead from the owner.


The bank will also obtain an NOC from the society before the auction. The society will highlight any liabilities that the new owner will have to bear and the same will be mentioned in the bid document. Many societies and their members have first right of refusal, or its members can match the highest bid to buy the property.


Buying directly from the owner

In this case, the owner and the new buyer would agree to the commercial terms, exchange a token deposit and then complete the bank process before signing the agreement and taking possession. The entire process can take two to three months. The property’s price will be higher than in a bank auction, as the seller will try to recover his/her initial investment.



Buyers must aim for a win–win for the bank and the original owner, to minimize the scope for a legal challenge. They must understand the history of the property under discussion and also get any historical papers for title due diligence.



  • It is difficult to know of all the distressed assets available.
  • In an auction, one has no way of knowing what the highest bid will be, so there is no guarantee of securing the property.
  • The original owner may sue the bank, resulting in legal delays for the buyer.



  • Properties are priced lower than existing market rates.
  • Potential to secure a property in a premium location.
  • Generally, there is less need for legal due diligence, as the bank would have inspected the documents before giving a loan.


Like every deal going for a distressed property is an affair that has its own pros and cons. It is advisable to go through them before going through the deal.

Goods and Service Tax: The effects Real Estate will have

A big-ticket reform that will transform the entire gamut of Indian business scenario is finally taking shape. Goods and Service Tax bill or GST bill as it is popularly known as, after getting elder house’s absolute nod will soon see the day with the passage of the bill from Loksabha. Though it needs to be vetted by at least 15 state legislatures but owing to the consensus between almost all political parties of the country, it’s passage seems to be a matter of time.


The question now arises as to how implementing GST will benefit Real Estate Sector. A short synopsis given below will help understand the benefits to the Real Estate Sector from the implication of GST.

The Goods and Services Tax is expected to be implemented from April 1, 2017.The Goods and Services Tax (GST), is a comprehensive indirect tax on the sale, manufacture and consumption of different kinds of goods and services throughout India, with all other central and state taxes intended to be subsumed under it. This tax will have far-reaching implications, including on real estate.

Existing taxation norms

The real estate industry in India has witnessed major tax changes, in the last few years. However, these taxes are not uniform all over the country – different practices and regulations are followed in different states. It was the 46th amendment to the constitution that brought massive changes towards taxation in the real estate sector. Subsequently, special powers were given to the state governments, for implementing Value-Added Tax (VAT) on some specific kinds of transactions.

Vat & Ecxise

For land, property and other kinds of work contracts, the state government and the central government levy different kinds of taxes. The transactions are mainly categorized in three parts – value of services, value of goods and materials, and value of land. The state government on the goods portion applies VAT, while the value of services is taxed by the central government. However, other than stamp duty, there is no clear tax on the transactions regarding the value of land. This situation leads to confusion and can result in dual taxation. Compliance and implementation of such taxes are also difficult.

This has led to a situation, where for one real estate transaction, multiple taxes need to be paid. This has a negative effect on the industry.

The industry’s demand to bring GST on board is primarily to get a clear and transparent taxation rule for the real estate sector in India.


Impact of GST on Indian realty

The implementation of GST can prove to be a significant step in reforming indirect taxation in India. Chances of double taxation would be diminished, as some of the central and state government taxes will be amalgamated into one tax. This will ease the process of taxation considerably, making it easier to enforce and administer.In the current situation, a developer incurs various kinds of expenses during the construction phase of a project. Different kinds of taxes are involved with these expenses, such as VAT/CST, customs duties, service tax, excise duty, etc. A majority of these taxes are expenses that are included in the system. This is because they are not creditable to the developer or to the end-customer. These non-creditable expenses lead to tax inefficiency, which is not desirable.


One positive impact of the GST could be the doing away of restrictions on credit utilization. This will definitely help in strengthening the credit chain in the entire system. If builders can properly manage this aspect, they will see some profit.

The proposed GST structure should provide a progressive and streamlined approach. Presently, builders running projects in different states have to comply with state-specific VAT laws, as well as other kinds of service taxes. Bringing in GST will, therefore, not bring any additional compliance burden on real estate builders in the country.


Issues regarding GST, which affect real estate builders

Developers, on their part, have also been seeking certain clarifications, vis-à-vis GST. For example, the definition of a real estate developer varies from one state to another. The composition scheme varies according to state, in which the VAT rates range between 1% and 5%. In some states, there are differences between the terms ‘real estate contractors’ and ‘real estate developers’. These different meanings will have to be factored in while evaluating the GST implications.

There might be some confusion regarding GST implementations on residential property, as well. In the present scenario, there is no service tax applicable on renting immovable property, particularly for residential purposes. However, service tax and VAT is applicable on construction work. The question that arises is if the GST will offer differential tax for residential properties.

As of now, it does not look like completed residential projects will be affected by GST, as buyers into completed projects have already paid the statutory charges, such as stamp duty and registration charges on the transaction.

The segments to watch on the GST front are under-construction flats and rental flats, which are expected to come under its ambit. GST will apply to the materials that a developer procures for building a residential project. Hence it will have a direct impact on the overall cost of construction.

Moreover, a lot also depends on the final rate of GST. If it is more than the existing cumulative taxes, then, the overall cost of buying an under-construction flat will increase, along with the added cost of stamp duty and registration. Developers will also have to keep an eye on costing, as price competitiveness is very important in the current real estate market scenario.




Capital gains on sale of Property

Property in India is considered as the safest investment option after gold. The Property like gold and other valuables can be inherited or can be purchased. Property like gold is purchased with an intention that it will serve as a saviour during the lean phase of one’s life.


Income tax provisions for the sale of an inherited property and the accrued capital gains are different from a property that is obtained through other means, such as an outright purchase. There is considerable confusion over the taxes applicable on the sale of an inherited property. While many think that the money received on sale of an inherited house is fully tax exempt, others feel that it is fully taxable. In reality, there is no tax liability at the incidence of inheritance. However, any profits made on the sale of an inherited house, are taxable as capital gains.

Income Tax

Computation of capital gains

A capital gain may either be short term, or long term, depending on the period for which the asset was held. If the inherited house is held for more than 36 months, it is treated as a long-term asset. This period of 36 months includes not only the period for which you held the house, but also the period for which it was held by the previous owner/s who had paid for it.

Capital Gains

For a holding period of less than 36 months, the actual cost of acquisition and any cost of improvement are deducted and the balance amount is treated as short-term gains and taxed at the slab rate applicable to you. If the combined holding period exceeds 36 months, you get the right to deduct the cost of acquisition and the cost of improvement as enhanced by the cost inflation index multiplier. The cost inflation multiplier is calculated, based on the cost inflation index of the year of purchase and the year of sale.

The cost of acquisition will be the amount paid by any of the previous owners, towards the purchase of the house. For example, consider a scenario, where you inherited a house from your father and he had inherited it from his father. If your grandfather had purchased the house for Rs 50,000, your cost of acquisition for capital gains purposes shall be Rs 50,000. Moreover, in case the house was inherited before 1st April 1981, you may substitute the fair market value of the property as on 1st April 1981 for the ‘cost of acquisition’ and apply the cost inflation index multiplier on that value.

In case the asset is inherited by you after 1st April 1981, you will have to consider Rs 50,000 as the cost of acquisition. As per strict reading of the income tax provisions, you can claim the benefit of indexation with reference to the year in which you inherited the property only and not earlier. However, high courts in Mumbai, Delhi and Gujarat have taken the view that for inherited property, in case the asset is acquired after 1st April 1981, the tax payer can claim indexation benefits from the year in which the previous owner who had paid for it had acquired it.


In any case, even if the asset was purchased before 1st April 1981, you can substitute the market value as on 1st April 1981 for the ‘cost of acquisition and get the indexation benefits from 1st April 1981, even if you may have inherited it later on.

Exemption from long-term capital gains

For a long-term asset, you have two options to save taxes. You can either invest the capital gains on the purchase of one house within two years or construct one house within three years. Alternatively and/or additionally, you can invest the capital gains of up to Rs 50 lakhs in bonds of NHAI or REC, within six months of its accrual.






Monsoon season: Is it a bonanza season for homebuyers

It is a general practice among buyers of real estate to avoid site visits or the purchase of a resale home during monsoons. In contrast, buyers can take advantage of this season to evaluate the location and construction quality and fix a favorable deal.

In this season, the surrounding areas and the property put a very different picture in comparison to the remaining part of the year. Resultant, the would-be homebuyers get an opportunity to have a precious insight of the property they propose to buy. Here we shall detail some reasons that will support your idea to invest in the property during monsoons.


Infrastructure and amenities in the area

Real estate experts advise that home seekers should visit the construction site more than once, before making a final decision. Visiting a site in the monsoons when the traffic is at its worst, in most places, will provide insights on the waterlogging situation, as well as travel and access to the area. Monsoons are an apt time for buyers to go house hunting in a country like India and assess the condition of the building and the area around it. During monsoons, getting transportation from your home to the nearest railway station or bus depot is a nightmare in cities and this aspect cannot be overlooked during such site visits.


Construction quality

Monsoon is the best period to check the overall quality of construction of a house. Issues like seepage in the ceiling and near the washrooms are quite common during rains. Heavy rain will reveal the construction flaws, like seepages/leakages, quality of plumbing and drainage, waterlogging, traffic in the neighborhood, etc. It is thus, the best period to visit the site and should not be avoided.



While ascertaining construction quality may not always be possible in an under-construction property, the rainy season is the perfect time to check the quality of a resale house One of the factors to be considered, while finalizing a top-floor flat is the possibility of leakage issues. This is particularly important in a resale property. Go ahead with the deal, only when one is assured that the flat could withstand the elements of nature. The monsoon actually puts any building, even if it is from a reputed builder with a high quality of construction to the test.

Best time to negotiate

Issues like leakages during the monsoons can also be used by buyers to make the deal work in their favor. If a buyer likes a particular property that has an issue of water-logging in and around the building or a leakage problem, then, the prospective buyer has a chance to bargain further and get a fairly good deal and get it solved. This may not be possible in dry weather conditions.


Raining discounts

As the demand for properties tends to dip in the monsoon season, it is an ideal time for discounts. The monsoon is generally regarded as a lean period for the realty sector. However, it is a good time for home buyers, especially for those looking at resalable properties. This is the time when demand is less and sellers are willing to negotiate on lowering the price for the serious buyer. Moreover, with people preferring to invest in real estate during the festival season, which begins in September-October, builders offer attractive discounts around monsoon to boost their sales for that quarter.



Advantages of selecting a property in the monsoons:

  • Buyers can gauge whether the property has problems pertaining to seepage, leakage from the terrace, drainage issues leading to stagnation of dirty water, etc.
  • For a resale home, a final inspection in this season can reveal construction quality and how the house has been maintained.
  • Low-lying areas are prone to flooding, leading to traffic jams and transportation woes. The extent of this problem can be best judged in the monsoon season.
  • In cases, where flaws in the project become evident during the rainy season, buyers can bargain and also ask the developer to mend the same.
  • As it is a lean period, vis-à-vis sales, sellers may be willing to negotiate on the price.


How NRI buyers can buy home in India and financing options for them

Non-resident Indians or NRI’s as they are popularly known as have contributed a lot to Indian Economy with their investments and remittances. To maintain their connections and bonding with their native place, they have generously invested their savings in Real-Estate sector.


Apart from investing in property for self, many of them have bought apartments and villas either for their parents or near relatives. NRI’s have also made use of Home financing options for obtaining a property in India. The government viewing the growing trend among NRI’s to invest in Real Estate sector have made some regulations. The main purpose of these regulations is to firstly save them from any cheating, to ensure that the money coming to the country for the purpose is through neat and clean channel and NRI’s can avail the facility of home financing without hassles.


Home financing options for NRI buyers

Besides regulations for the type of properties that NRIs can purchase in India, legal provisions also exist on the mode through which these purchases can be financed

When a non-resident Indian (NRI) opts to purchase a property in India, there are several regulations that govern how such a purchase can be financed.

Sources, for financing a real estate investment in India

The money for purchasing a property in India, has to come through banking channels only. Consequently, the payment cannot be tendered in the form of traveller’s cheque or foreign currency. An NRI can also use the money in his/her credit, in non-resident external (NRE) rupee or non-resident ordinary (NRO) or foreign currency non-resident (FCNR) account, maintained in India.

nri bank accts

NRIs are allowed to purchase property in India, by availing home loans in Indian rupees, from banks or housing finance companies. The home loan can also be granted by the Indian employer of the NRI employee, for the purpose of financing of the property.

Obtaining a home loan

As NRI investment in Indian real estate is only allowed in residential or commercial properties, banks too, can finance only these properties. Almost all banks offer home loans to NRIs for buying a house or constructing one. One can also get a loan, for purchase of land (non-agricultural), for constructing a house in India.

NRI Image for Anukamapa blog

The application for the home loan can be made online, as well as offline. The nature of documents that need to be submitted, will depend on whether the NRI is a salaried employee or whether s/he is self-employed. It will also vary, depending on the NRI’s country of residence. Nevertheless, copies of one’s passport and visa, passport-sized photographs and proof of residence in the foreign county, will be required in all cases.


Depending on whether the NRI is salaried or self-employed, s/he also has to fulfil a minimum period of stay in the country of present residence, to avail of the home loan. Banks may also insist on an acceptable co-applicant, or an NRI guarantor. The NRI guarantor too, has to submit documents pertaining to identity proof, address proof and income proof.


Servicing the home loan

EMIs on the home loan can be paid through remittances from outside India, through a proper banking channel, or by debiting the NRE, or NRO, or FCNR account. In case the property is let-out, the rental yields can be used for servicing the NRI home loan. Money transferred to the NRO account from close relatives, can also be used for servicing the home loans. In case the property is purchased for self-occupancy, the NRI can avail of a loan against the FCNR or NRE account deposits, of up to Rs 1 crore, for servicing the home loan.


Remittances out of India

An NRI is allowed to repatriate some of the funds, in case the property so acquired is sold.  However, the number of properties (whether purchased or inherited), for which s/he can remit or send money to India, is restricted to two. Moreover, the amount that can be repatriated cannot exceed the amount (denominated in foreign currency) received as remittances from outside India, either for purchase or servicing of the NRI home loan. Under normal circumstances, an NRI is allowed to remit an amount of USD 1 million in a year, out of India, from his NRE, NRO, or FCNR accounts, which includes the amount remitted for sale of a house.



Real estate: Will it appeal 7th. Pay commission beneficiaries

A few days back, Central Government benefitted its employees by accepting the recommendations of 7th. Pay commission. The government gave a generous rise of around 25 % of the current pay structure of its employees and retirees. The recommendations of the commission will come into force from 1st. of January 2016 and accordingly, the arrears of proposed hike will be given from this date. The payment of arrears is expected to be disbursed before beginning of festive season i.e. by the months of September-October 2016. A sum of around Rs. 1.02 lakh crores will be disbursed among one crore employees and retirees of the central government.

7th-Pay commission


The employees will get a substantial amount as arrear payments and with such fat disbursements, they would go for some suitable investment opportunity. There are many investment options such as Bullion, Share market, Bank Deposit and Real estate etc. are available with them and amongst these options, Real Estate is the first choice of investment for government employees, after the hike announced in the 7th Pay Commission.

Real Estate has emerged as the first choice for investment, among serving government employees, as well as those who have already retired, with close to half of the employees in 20 cities of India, preferring to invest in real estate, following the 7th Pay Commission’s salary hike. As many as 44% of government employees across the country, wish to invest the entire salary gains into the Real Estate market. These are the findings of an exhaustive survey on consumer behavior patterns of government employees.


The major findings of the survey are:

44% of the government employees would invest the benefits of the 7th Pay Commission into the real estate.

34% of the respondents would invest in financial schemes for retirement gains; 12% to save money for education and marriage of children; and 10% would opt to upgrade their lifestyle.

Contrary to the general perception that youngsters drive the property market, officials who are close to retirement, are more inclined to invest in property (as many as 78%).

Metro cities with expats to attract more government officials (68%) into the property market.

Peripheral locations and emerging markets are likely to attract more government officials (68%) in Real estate sector.

Lack of affordable housing and the possibility of inflation, are the major deterrents for investing in real estate.

 Preferred locations

The study found that the main city areas are likely to benefit less, as compared to the outskirts, owing to affordability, the urge for a relaxed lifestyle amidst open spaces and appreciation potential. With retirement in mind, as many as 74% of those who are investing in the property market, prefer emerging locations rather than established markets. Even those who have retired, prefer these locations, with a majority of them are already living in such regions.



The quest for Real Estate is more among the older generation, compared to young buyers. While one-fourths of the young generation (as many as 22%), wish to upgrade their lifestyle first and then diversify their portfolios, 78% of those above the age of 45 years wish to invest in the property market. A majority of the employees in the survey were closer to retirement and only a small set was below 30 years of age.

Investment options and concerns

While real estate emerged as the first choice of investment, 34% of the respondents said they would invest in financial schemes with fixed returns, post retirement. Education and marriage of children came next, with 12% saving the 7th Pay Commission’s benefits for it and the remaining 10% said they would like to upgrade their lifestyle. The survey noted that nearly all of the respondents wish to avoid speculation, even with their investment in the property market.

As many as 74% of those planning to invest in property, did not have a house of their own, while 22% said they would be investing in a second property for rental income. Only 4% said they would invest in a weekend home.

Less than one-third of the respondents (30%), felt that the 7th Pay Commission’s benefits would improve consumer sentiment. The biggest deterrent to investing in the property market was the absence of affordable housing options (55%), while 45% were apprehensive that inflation would eat up the benefits.

The survey demography was a carefully chosen mix of government employees across the hierarchy. The survey was carried out in Delhi, Noida, Gurugram, Ghaziabad, Mumbai, Pune, Nagpur, Nasik, Ahmedabad, Bangalore, Chennai, Hyderabad, Coimbatore, Kochi, Kolkata, Bhubaneswar, Jaipur, Bhopal, Lucknow and Patna.





Super Built-up Area in context to Real Estate Regulatory Act

Among the many customer- friendly features of Real Estate Bill (Act), one is the abolition of Super Built up area. Now buyer has to pay only for carpet area which as defined under the Act is:


Carpet Area is the net usable floor area of an apartment excluding the area covered by the external walls, areas under services shafts, exclusive balcony or verandah area, and exclusive open terrace area, but includes the are covered by the internal partition walls of the apartment.

Though implementation of this definition will result in an escalation of per square feet cost of the apartment but the buyer will have the satisfaction that he has paid for the actual area under his possession, not for the superfluous area which he intends to use rarely. In market parlance,

Super Built Area is the built up are plus proportionate area of common areas such as the lobby, lifts, shafts, stairs etc. Sometimes it may also include the common areas such as swimming pool, garden, club houses etc.

Generally, CARPET AREA is around (70 to 80)% of SUPER BUILT UP AREA. But note that this percentage varies from project to project and builder to builder. Payment is made on “SUPER BUILT UP AREA”.
Prior to this act, Super Built Area was calculated in the manner given below:
If CARPET AREA is 600 sq ft. What would be SUPER BUILT UP AREA?
Let’s assume the ratio is 75:25.

SUPER BUILT UP AREA = 600 + 25% of 600 = 600 + 150 = 750 SQ FT

So the payment will be made for 750 sq ft, not 600 sq ft.

Built up super built up area

Thus the buyer had to make an additional payment of 150 sq ft
Any violation in this regard will entitle the buyer to file a complaint against the builder before Real estate regulatory Authority having its bench in every state of India .

Apart from clarification on Super Build up Area in Apartments, Real Estate Regulatory Act has come up with many measures which will strengthen the buyer’s faith in Realty sector in coming days.