Which is better, constructing a house in the site or purchase a flat in Bangalore?

Buying property is tough. As if saving money for the goal isn't arduous enough, you have to rack your brain to decide what to buy - an apartment or a built-up house or a plot. Besides lifestyle preferences, one has to look at aspects such as taxation and bank loans as well.

COMFORT ZONE

While buying the best apartment in Bangalore, one does not have to worry about hiring an architect, seeking approvals from local bodies and dealing with contractors. The developer takes care of these things and hands you the house where you can start living immediately.

You also do not have to worry about things such as power backup, maintenance, and security. You get these services as well as common facilities such as a clubhouse and swimming pool. If you buy a plot and build a house on it, you will miss these comforts, unless it's in a gated community developed by a builder.

But plots have a big plus-they are usually ready for possession. Even when part of a big real estate project, you are likely to get possession of a plot much before the flats will be ready.

APPRECIATION

Location is the key to price rise. If the market is stable, the value of a plot will rise over time. As developing a plot is easier than building a structure, the value of your investment is likely to rise faster in a short span. This means you can exit investment bets earlier.

This is not to say the price of an apartment will not rise. Location, infrastructure, and neighborhood push up the value of both plots and apartments. However, the value of a building has to factor in the depreciation due to age.

Tax details

If you live in the apartment, you are eligible for deduction up to Rs 1.5 lakh per financial year for interest paid on the loan (provided the loan has been taken on or after 1 April 1999). You can also claim Rs 1 lakh deduction for repayment of the principal. If you buy a second house, the full interest paid is eligible for a tax deduction. However, in such a case, the rental income is added to your taxable income.

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