Different Types of Ownerships to Consider when Looking for a Home

If you are a first time home buyer, starting your search for the ideal property can be a tough and overwhelming task. With a number of unfamiliar situations to navigate yourself through, the entire process can be a lot more intimidating than you imagined. To be able to work your way around the various technical and legal terminology, here is a great place to start.

Understanding the Different Types of Ownership

Before you start looking at new residential apartments in Lucknow it is important that you weigh your options. Understand that you as home seeker have two property ownership modes to choose from –

 Freehold Property
The more common of the two types of ownership, a freehold ownership is where the buyer essentially has complete legal rights over the property in question. This means that he has the right to transfer the ownership, sell the property or stay in it as per his own needs and whims.

 Leasehold Property
In this form of property ownership, one essentially only owns the building but does not own the land. Furthermore, the ownership of the property is for a pre-defined tenure that can go up to 99 years. At the end of the lease agreement period, the property ownership is transferred back to its original owner.

Which Option must I go for?
The freehold property option proves to be a much more practical investment option since you are securing the future for not only yourself for also your heirs. Furthermore, such property is also a lot more marketable in the real estate market, making it easier to sell, mortgage or rent out in the time of need.

Understanding the Transfer of Property

Furthermore, your leasehold residential apartment in Lucknow cannot be transferred as easily as one can transfer a freehold home. You will be expected to have a Power of Attorney for conducting any form of transaction. Furthermore, this power PoA ceases to exist when the seller or the owner passes away.

Enjoying Absolute Ownership

In case of a freehold property, the complete legal ownership of the apartment in question goes to the buyer. In the case of leasehold, the buyer is essentially a lessee and has extremely limited rights. Opting for a leasehold solution is ideal only if your requirement is a short-term one and you want easy access to a home for a limited period of time. Also, if you intend to delay your decision to buy a new home because of an unfavourable buyer’s market, you can temporarily consider opting for a leasehold ownership at a negotiated price.

Considering that the title is always absolute and clear, most real estate experts recommend that home buyers opt for the freehold property mode of ownership. This option tends to be a lot more stable and owners are able to enjoy the benefit of market appreciations in the long run. These properties are easier to sell, mortgage and maintain as standing security.

Advertisements

Hidden Costs You Want To Be Aware Of When Buying Residential Apartments in Lucknow

Flat in LucknowBuying a home is probably one of the biggest purchases one will make in his or her life. However, when closing a deal on a residential apartment in Lucknow, you need to know that over and above the price tag on the property there are a host of other taxes, fees and charges that you may have to take into account. Here are a few costs that you may want to account for when setting aside a budget –

• Cost of Registration and Stamp Duty
The registration is essentially the final agreement that is signed between the buyer and the selling highlighting the change of ownerships as well as the responsibilities of the buyer. To be able to get your property registered, you will have to pay a charge to the government and also pay a stamp duty. This is essentially a tax that is levied on every property transaction.
This process can be quite expensive and essentially depends on the total value of the property and may vary anywhere between 5 to 14.7% of the property cost. You also may be required to pay a registration fee to the court, fees to the notary and lawyers who process this for you.

• VAT and Service Tax
If you purchase any property that is still under construction, you will be charge a VAT and a service tax. While VAT is charged based on the construction value of the project, you will be levied a service tax of 12.36% of the 25% of the value of the property under construction.

• Preferential Location Charge
This is an additional charge that you pay to book residential apartments in Lucknow that have a better location within a specific society or complex. This charge may differ from one builder to another, but the more premium the project the higher will be the charge.

• Utility Charges
This includes various costs associated with the building you are living in. This could be anything from parking charges, electrification, maintenance, fire fighting and other such expenses associate with utilities that are offered by the local or state government.

In addition to this, you also want to account for external development charges which are essentially applied per square feet and goes into the upkeep and development of the area around your building. Also account for advanced club house charges and maintenance charges which are most commonly levied in lifestyle buildings.