What would be a safe and sound approach to buy property?

Do your complete research on the Web and physical survey of the projects. Invest in projects which are at least 25-30 per cent complete as this will be comfortable in terms of approvals. Brokers may sometime offer better rates than the developer'€™s sales team. Bank approved projects are preferred since they give comfort in terms of the approvals.

What kind of return should you expect from your purchase after two years?

It is impossible to predict a return in two years. Property buying as an investment must be looked at in terms of long-term holding capacity. While in the last two years, certain properties in metros have gone up by 20-80 per cent, in some cases that cannot be an indication of what the future holds. An exit after four years usually yields great returns

How to estimate growth in the value of land in future?

Infrastructure development has to keep pace with the swanky townships being planned in most cities. If water supply, electricity, safety or security, law and order, road infrastructure, etc are progressive, we can only expect appreciation in the land value.

How to choose a location that ensures the best return on investment?

Identifying a suitable location is one of the most important tasks of buying a property. Users normally question about choosing best location to reap good returns on their investment. Connectivity of the property with city and other location plays a vital role in boosting the re-sale value. Buyer should ensure that the property is located in an ideal area with good connectivity to the bus station, railway station, airport and super market etc.

1. What are the taxes you have to pay while purchasing property?

If you are buying a new property, you have to pay Service Tax, VAT and Stamp Duty on the total amount of purchase. If you buy re-sale property, then you do not have to pay any of these taxes.

2. When is the transaction of sale considered complete?

The transaction of sale is considered complete when either the possession is given or Conveyance Deed is registered.

3. When are capital gains applicable and how can capital gain tax be saved / reduces ?

Capital gain is applicable when:

The sold property has been withheld by a person for a period of more than three years from the date of purchase / possession.

The sale proceeds are invested in a residential property which is bought one year before the sale of property or two years after the sale of first property.

The new property is bought after the sale of the first propety.

Capital Gains Tax can also be saved by investing the sale proceeds in Capital Gain Bonds.