Technical Terms of Property: Know Before buying a property
Technical Terms of Property: Buying a property / house or renting it is a tricky issue. When you start looking for it, you come across many technical words. Different types of areas are talked about. All figures are presented. It is quite confusing. For example, real estate portals also list carpet areas and super built-up areas. What is right for you, you fall into the circle.
Technical Terms of Property
Before buying a property, you must know the meaning of these technical terms, you will benefit. Such terminology is not only confusing, but it can also deceive you. The decision to buy a house is very big. This is the reason that buyers should understand and know the technical terms associated with the property. This helps in making better decisions. Here we are telling you about some such terms and concepts: Technical Terms of Property.
Carpet area:
It is a real habitable area that is measured from inside the walls. This means the area of the apartment in which carpet can be laid. It includes a balcony. Now it is mandatory for the developers to tell the carpet area of all apartment units in the brochure and website.
Built-up area:
It tells the total area of the flat. This includes carpet area, thickness of walls and drains. This is usually 10–15 per cent more than the carpet area.
Super Built-up Area:
This is a total ‘salable’ area. In addition to the built-up area, common spaces such as elevators, ladders, entrance lobbies, corridors etc. are included. This includes all common infrastructure (except parking spaces) for which the buyer is not directly charged, but is divided equally in proportion to all flats. Super built-up area is charged per unit price per square foot.
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What is a floor space index?
It is the total plot area in proportion to the total area covering all the floors in the building. This indicates the maximum number of constructions allowed in a given plot. For example, if the FSI for a plot of 4,000 square feet is 1, then the total floor area of the multistory building cannot exceed 4,000 square feet. The total built-up area can be 12,000 square feet if FSI is 3. Projects with more FSI offer the builder more livable area. Then even if the plot is small. The approved FSI varies from place to place. This depends on the size of the plot, the type of building, as well as the width of the road and the availability of electricity, water and sewage lines.
What is a ready reckoner rate?
It is also known by the name of Circle Rate. This is the minimum price at which a property has to be registered in case of transfer. The property needs to be registered at the minimum rate or Declared Transaction Value fixed by the government, whichever is higher. Stamp duty is calculated as a percentage of this value.
What happens when you buy a property below the Circle Rate?
The buyer has to pay extra stamp duty on the basis of higher circle rate. If the difference in price is more than Rs 50,000, then it is taxable in the hands of the buyer. If the price difference is more than 10%, then the seller has to pay additional capital gains tax on the notional value.
First Position
- Purchase / Sale Price: Rs 95 Lakh
- Market Price: Rs 1 Crore
- How much does the buyer pay stamp duty: Rs. 1 Crore.
- How much does the buyer pay the tax: Rs. 5 lakhs.
- Since the discount is not more than 10%, the tax will not be taxed on the seller.
Second position:
- Purchase / sale price: Rs. 88 lakhs
- Market price: Rs. 1 Crore
- How much does the buyer pay stamp duty: Rs. 1 Crore.
- How much does the buyer pay the tax: Rs. 12 Lakhs.
- Since the discount is more than 10%, the seller will also pay tax on Rs. 12 Lakhs.
What kind of documents are mentioned?
No Objection Certificate:
This certificate issues local authority. It is said that the construction plan is according to the terms and conditions.
Encumbrance Certificate:
It is issued by the Registrar of Assurance or the Sub-Registrar Office. It is issued after verification of all the required documents. It is said that there is no arrear on the property.
Occupancy Certificate:
Issues it to a local municipal body builder or a house owner. It is said that the house is fit to live.
Sale Agreement:
This includes the promise of transfer of property in future. Many conditions have to be fulfilled for this.
Sale Deed:
This is a kind of contract. In this, the seller transfers all the rights of the property to the buyer. This makes the buyer fully entitled to the property.