Under Construction Property
A complete guide to what "Under Construction Property" means in real estate and how it applies to property transactions in India.
Definition
An under-construction property is a real estate project that has received building approvals and has commenced construction but has not yet been completed. Buyers purchase these properties based on floor plans, specifications, and the developer's promise of future delivery.
Use of Under Construction Property in Real Estate
Under-construction properties in India are regulated by RERA, which requires developers to register projects, maintain separate escrow accounts, and deliver possession by the committed date. They are typically 10-25% cheaper than ready-to-move-in properties but carry risks including construction delays, specification changes, and developer insolvency. GST at 5% (without input tax credit) applies to under-construction properties, while ready properties are exempt from GST.
Key Takeaway
Understanding "Under Construction Property" is essential for making informed real estate decisions. Always consult a qualified professional for advice specific to your situation.
Disclaimer: This glossary is for educational purposes only and does not constitute legal or financial advice. Definitions may not reflect the most current regulatory changes. Please consult a qualified professional for guidance specific to your transaction.