Planning to buy a house in Delhi? Check factors to consider, other details

What is the procedure to buy a house in Delhi? From home loan to location, here is a step-by-step guide on how to plan such an investment

Buying a house is one of the most important financial decisions for an individual or a family. It requires plenty of planning and several factors need to be considered, including the locality and budget. Delhi, the bustling capital city of India, has a booming real estate market. While buying a house could feel daunting, proper planning can help you out. Here is a step-by-step guide on how to plan such an investment.

What are the key things you should consider before buying a house?

• Construction quality: Ask your builder about the quality of the material used for the construction of the house while considering it for purchase.
• Connectivity: It is one of the most important factors to consider while buying a house. Make sure the property is well connected with the rest of the city and is in proximity to hospitals, schools, market, retail stores, metro stations, bus stops, and other facilities.
• Security: Security is a major concern for those living in a big city like Delhi. Make sure your preferred area is gated and has a security guard before finalising it.
• Car parking: If you own a car or are planning to buy one, it is crucial to buy a property that comes with ample parking space. Ignoring this factor could cost you dearly.
• Future plans: It is important to take into account the estimated duration you will stay at a location before buying a property there. In case you might have to move in the near future, it would not be wise to make such a huge investment.

Step-by-Step guide to buy a house in Delhi

• Check your finances: The first step is to figure out how much you are ready to spend on your new house. Experts say you should never spend over 30% of your take-home salary on loans. So you will have to accordingly work out how much you can afford to spend on a home loan.
• Finalise a location: It is crucial to understand your requirements and finalize a location accordingly. For example, if there are children in your family, it would be wise to look for a house that is close to good schools. Similarly, buying a house near your work location can help you save plenty of time and money.
• Choose a home loan: If you need to take a home loan, check out the loan rates of different banks. Compare them thoroughly and choose the one that suits your requirements and fits in your budget.
• Save up: Once you have figured out how much you need to spend and how much your monthly installments will be, it’s time to start saving up. Of course, you will have to pay a certain amount as a down payment. In fact, the higher the down payment you make, the more you can save on your EMIs.
• Check out options: Once you are done with calculations and savings, it’s time to start looking for options. Patience and flexibility are the key to finding the right house. Make a list of all the requirements that are non-negotiable for you and those you can do without. Check out as many options as possible before making a final choice.

Which documents will you need?

Many legal documents are involved in the purchase of a residential property. Here is a list of important documents that you might need while buying a house in Delhi.

Agreement to sell

It is the first document prepared in the process of a property’s sale. It contains a detailed description of the property and the terms and conditions between the buyer and seller, including the purchase price as agreed upon between the two.

Sale deed

The sale deed contains evidence of the sale and the transfer of property from the builder to an individual. This document is required when a person may want to resell the house in the future.

Title search and report

This document carries a description of the property and the names of property owners, joint tenants, etc. It is an important document while applying for a home loan.

Khata certificate

This document provides proof that a property is registered in the local municipal records. It is needed while applying for electricity and water supply.

Property tax receipts

Such receipts prove that the previous owner or occupier had paid all the due taxes and no dues are left at the time of purchase.

Encumbrance certificate

This certificate states that the concerned property is free from any encumbrances or loans. It is usually required at the time of procuring the home loan.

Bank statement for an outstanding loan

If there is an outstanding loan on the property, it is advisable to procure a statement in that regard from the bank.

Occupancy certificate

This document is issued by the municipal corporation after the construction of a building to state that it was constructed in accordance with a sanctioned plan.

No-objection certificates (NOCs)

You must procure no-objection certificates from various departments such as Sewage Board, Pollution Board, Environment Department, etc., before moving into your new house.

Power of Attorney

A Power of Attorney (PoA) is needed if a person is acting on the authorisation of the owner of the property.

What are the different types of costs while buying a house?

Besides the property price and the utility bills, there are some other charges you will have to pay while buying a property. They include:

Stamp duty

It is a mandatory tax levied by the government on property transactions. The stamp duty varies from one state to another. In Delhi, stamp duty is between 4% and 6%.

Registration fee

It is a cost levied by the government for property sale. In most states, this fee is fixed at 1% of the transaction value. This payment is made over and above the stamp duty payment.

GST

If you are buying an under-construction property, you will have to pay a certain amount for the Goods and Services Tax (GST).

Maintenance charges

These include charges for the building security, lift charges, and other expenses. It could either be a one-time payment or a recurring charge. The maintenance charges for a house depend on its size and location, among other factors.

Parking fee

Several housing societies charge a parking fee. So you must consider this cost while planning to buy a house.

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Can non-resident Indians (NRIs) buy property in Delhi?

• NRIs are free to buy immovable property in India. However, the payment cannot be made in foreign currency. Here are a few things that should be kept in mind.
• NRIs can buy all kinds of immovable property, other than agricultural land and farmhouse. For such properties, they will have to seek approval from the government and the Reserve Bank of India (RBI).
• Since they reside out of the country, NRIs have the option to transfer the power of attorney to their friends or relatives living in India.