LEGAL EAGLE - Buying a house? Here are a few tips
“We had sold off another property at that time, but based on the advice of a lawyer friend, I decided to take a home loan to fund my property purchase,“ he says. According to Sidhu, the bank conducted a series of checks on the property to find out if all the documentation was in order.
SOME LEVEL OF SAFETY TO THE BUYER
Vicky Oswal, managing director of a leading realty group, explains that when a customer comes to a developer or through a broker to purchase a property, he has to mostly rely on their words. “There is a possibility that the broker may not reveal all the points about the property. The bank has to ensure that their funds are safeguarded and so they conduct a thorough check on all the paper work,“ Oswal notes. According to Oswal, a developer who has all the documents in place is more than happy to furnish these papers to the client or the bank officials.
“Once the bank approves the documents, it means that the bank too, has seconded the legitimacy of the project. The developer can then cite the same example to other customers,“ he adds.
However, it is imperative that the buyer also undertakes additional checks on his own into the property's bona-fides and antecedents if any margin of doubt exists, states Sunil Agarwal, associate dean and director for School of Real Estate. “Though all banks do conduct due diligence on the property which borrower intends to purchase, the depth of this due diligence often varies from bank to bank,“ Agarwal adds.
TAX INCENTIVES FOR THE SALARIED CLASS
Home loans are often the only financially viable means for someone from the middle class to purchase a home in the first place. Apart from this fact, there is significant tax benefits involved in purchasing a home through a bank loan.
FIVE YEAR SALE RESTRICTION
If property is sold within 5 years of purchase, all the deductions claimed under section 80C for that property are added to the taxable income of the assessee.