Ultimate Guide to Buying a Residential Plot in India

Best tips for buying a residential plot in India

We live in a status driven society where buying a property is directly associated with your status. Buying a property of your own is considered to be a great achievement, especially a residential property like a plot or an apartment in a gated residential complex. But, as a property buyer, you know that you are not buying a property just to impress the society, but to live or use the property or to get better appreciation of your investment in future.

But, whatever is the case, no one can deny that buying a residential plot in India is not easy. Prices of residential plots in India are already touching sky high. Moreover, before making such huge investments in buying a residential plot in India, you should evaluate everything well, and only when you are satisfied with all the papers, you should take a call on choosing the plot.

Buying a plot of your own to build your dream home can be exciting. But, you should not get carried away and buy a plot that first comes your way. In fact, you should do some research, verify certain things and then if you are satisfied, you should go ahead and book the plot.

If you are planning to buy a plot and you are wondering about what to know and how to verify everything before making an investment then continue reading. As today, in this guide to buying a residential plot in India, I am sharing everything worth knowing about buying a plot.

Best tips for buying a residential plot the right way

Process of buying a flat is much easier and straight forward, especially when you are buying a flat from a reputable builder and you are taking a house loan from a bank. Banks generally verify all the papers and documents and only when they are satisfied with everything, they sanction the loan.

But it’s not that straight forward in case you’re buying a residential plot. There are many things that have to be considered e.g. proper document verification, litigation, value of the property, location of the plot and so on.

If you are buying a residential plot, and you are wondering about how to do the due diligence the right way to avoid any hassles and future issues then here are the things you should consider.

Check the location of the plot

Among all other factors worth considering, the location of the plot you are planning to buy is of highest importance.

Naturally, if the plot is located in the middle of the city or closer to the city then the prices are going to be high.

Similarly, if the plot you are buying is located at the outskirts of the city, the prices are going to be a little less compared to the plots available in the main city.

But as they say, you get what you pay for. If you have the budget, you can consider buying a residential plot in an already developed area and if you want it cheaper you have to find a plot a little away and in an upcoming area.

So when choosing a location, you have to consider your budget.

But that’s not all that matters when choosing a location for a residential plot.

You should look at a potential residential plot of land from a future point of view. If you are buying a residential plot for future or as an investment option to get better returns in future then consider the number of years you are willing to wait.

Localities outside of the city may not look attractive today, but 5-10 years down the line, the same area may become people’s favorite and that’s the ideal plot one should look for.

Size of the plot

Size of the plot is another vital factor that you should consider when buying a residential plot. Whether you are buying a plot to build your own house in future or you are making an investment to get better returns, it’s important to buy a good size plot.

If you are buying the plot for your own use then figure out the kind of house or villa you would build in future. What size of house do you want to build and what are the amenities and features you would like to have in your future house. Depending on whether you want to build a duplex house, a bungalow, a villa or a farmhouse, you may get an idea of the ideal plot size.

Moreover, when you are buying a plot to build your own house in future, consider the buildup area you will get. You can check the local building guide to get an exact idea of the open space that has to be left while constructing a house. Usually 25%-30% of the plot area has to be left as open space at the time of construction otherwise you may not get sanction for your house plan.

However, if you are buying a residential plot for investment purposes, then think of the future appreciation and future buyer’s persona. Because, what kind of building can be built on that size of the plot can directly affect the future value appreciation of your plot.

Think through well and consider buying a larger size of plot, especially if that’s available and if you can afford to invest. After all, you don’t buy a plot of land many times in your lifetime, unless you buy and sell it to make money.

Buying a litigation free residential plot

You don’t want to end up buying a residential plot which is already disputed. And therefore, you have to check and ensure that the person or the builder you are buying from has the freehold of the property and that, there is no litigation or any dispute in the land.

There have been cases where same plot of land has been sold to multiple buyers and that’s the last thing you would want. Checking the credibility of the person or the builder you are buying from can help you to some extent. However, you should also enquire and get information from the local people, and check all the required documents that I will be talking about in the next step.

Verify the title deed of the land

Title deed of the land is one of the most vital documents that you should check before buying a plot. Before booking the plot, you should check for the title deed and ensure that the title deed is in the name of the seller and that the seller has the right to sell the property to any interested buyer.

Dealing of lands and plots in India happen a little differently. Sometimes, you may not get access to the actual owner of the land, and you may have to deal with a broker. Usually, the broker does an agreement with the actual owner at a certain price, and then they sell it to different individuals after keeping his profit.

In such cases, you don’t have a choice, but to deal with the broker, and ideally, you should avoid such land dealings.

However, if the broker is known to you and you know that you can trust the broker, even in that case you should check for the title deed of the land, and ensure that the person pretending to be the owner of the land has his name on the deed and that he is eligible to sell the land.

Secondly, if you are buying land through the dealer then make sure to check the agreement between the actual seller and the broker to know about the kind of agreement they have made.

Check mutation certificate and tax receipts

After checking and evaluating the main title deed of the land, the next important document to check is the mutation certificate and tax receipts. When you check the mutation certificate, you know for sure about the true ownership of the land.

Checking tax receipts of past years and quarters can help you determine if there is any tax due on the land. However, if you find that the mutation is done in the name of the person as per the title deed, but the taxes are not paid then get that paid.

Because, the tax liability can easily become huge, especially in mega cities because the local bodies usually add interest and fine at times on due taxes. And there is no point taking that liability when buying a residential plot.

Verify encumbrance certificate

One of the best ways to verify that the current owner of the land is the same person as mentioned in the title deed is to obtain an encumbrance certificate. You can ask for a certificate which is obtained from the office of the sub registrar where property is registered.

You can ask for details of the past 20-30 years, that way you get to know about who has been the owner of the land since past many years. This is very important and you should not just rely on the title deed, because the title deed might have changed in case the land is already sold to someone. And the best way to double check and verify the current owner or the history is to obtain and verify the encumbrance certificate.

Moreover, you also require the encumbrance certificate to home construction loan from a private or public sector bank. So, think of it as a very vital document that must be checked when buying a residential plot in India.

Approval by local body

This could be an important thing to check when buying a residential plot in India, especially in major city where there are local development bodies like in Kolkata, KMDA (Kolkata Metropolitan Development Authority) approves the layout of a site (of course when the land or the project falls in its jurisdiction). Check for necessary approvals from the local development body in your city before buying a plot in their jurisdiction.

Land use and conversion

Land use is an important aspect to look at when buying a residential plot to build your own house, now or in future. There may be a restricted zone that does not allow new construction and you should verify and ensure that the plot of land you are interested in does not fall in such restricted zone.

Moreover, if the plot is a farm land, then see to it that the land use can be converted and a residential building can be built on the land. This becomes even more important when you want to build a house immediately.

Check for loan against the land

Sometimes, the property may be pledged with the bank and therefore it is important to check that there is no loan against the property. If the plot of land was pledged with the bank, then you should ask for the NOC from the bank or the financing institution to ensure that the property has been freed by the bank.

Registration and boundary

Once you have verified everything and you are ready to buy the plot, you should make payments and get the land or the plot registered in your name. Once the registration is done, the next step is to get the mutation done in your name.

After registration, the next and final step is to get the boundary wall done on the plot of land.

Conclusion

The process of buying a flat is way simpler than buying a residential plot of land. When you are buying a plot of land, there are so many things that have to be checked before buying e.g. location, plot vastu, plot size, price etc. We have already discussed the most important things you should consider when buying a residential plot of land in this post.

Basically the idea is to ensure that the plot you are buying is a free hold plot and the person you are buying from is the true and rightful owner of the plot and that he has the full right to sell the plot. You also check all the documents related to the land and see to it that there are no pending taxes and that there is no bank loan against the land and there is no litigation whatsoever.

Only after verifying all these aspects, you should book and buy a residential plot from a developer or an individual owner or group of landowners.

What else do you think one should check for when buying a residential plot of land? Feel free to share your land buying tips and ideas by commenting below.

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By Editorial Team

The editorial team at Houseyog is a team of experts led by Jay Narayan Prasad with over a decade of experience in designing beautiful homes and spaces. We have been designing modern, space-optimized, functional and aesthetic buildings and homes for over a decade. And, Houseyog has become the fastest-growing platform for all things architecture and design.