Basic Real Estate Terms

BASIC REAL ESTATE TERMS

 

 

What are long term and short term capital assets?

A capital asset held for not more than 36 months or less is a short-term capital asset. An asset that is held for more than 36 months is a long-term capital asset. For example, a house property held for more than 3 years is termed as a long-term capital asset.

 

 

What is Carpet Area?

Carpet Area is the area enclosed within the walls, actual area to lay the carpet. This area does not include the thickness of the inner walls. It is the actual used area of an apartment/office unit/showroom etc.

 

 

What is Built-up Area?

Includes the carpet area, the wall thickness, balcony area until the inside walls.

 

 

What is Super built-up Area/ Saleable Area?

 Super built-up area is the built up area plus proportionate area of common areas such as the lobby, lifts shaft, stairs, etc. The built-up area along with a share of all common areas proportionately divided amongst all unit owners makes up the super built-up area.

 

 

What is Floor Space Index (FSI)?

 Floor Space Index or Floor Area Ratio is the ratio of the combined  gross floor area of all floors (excepting areas specifically exempted  under regulations) to the total area of the plot. It varies from  locality to locality depending on the surrounding infrastructure to  support the development. A higher FSI will have a higher built-up area.

 

 

What is Per Square Foot Rate?

 Generally developers decide the value of the property based on the per square foot rate of the super built-up area.

 

 

What is Collateral?

 An asset (such as a car/home) that guarantees the repayment of a loan. The borrower risks losing the asset if the loan is not repaid according to the terms of the loan contract. In a housing loan scenario, collateral would mean additional security over and above the security of the property being financed.

 

 

What is a Pre Launch Property?

A property in a project which is in planning stage and does not have all the approvals yet but is soon expected to get all approvals. Generally, in order to raise public funds, many developers offer huge discounts in the pre launch stage. However, investors should be cautious of the risks involved.

 

 

What is a Ready to Move Property?

A property which is ready to occupy i.e. which is complete in all respects including all utility connections and has received completion certificate.

 

 

What are Maintenance Charges?

Charges payable by the owners / occupants of a development (apartment complex / commercial complex / plotted development etc) towards upkeep & maintenance of all common areas and facilities. It is normally a monthly charge and the amount payable is dependent on the kind of amenities that are part of the project.

 

 

Who can purchase immovable properties in Overseas Corporate Bodies (OCBs) India?

Under the general permission available, the following categories can freely purchase immovable property in India:

1) Non-Resident Indian (NRI) – that is a citizen of India resident outside India

2) Person of Indian Origin (PIO) – that is an individual (not being a citizen of Pakistan/ Bangladesh/ Sri Lanka/ Afghanistan/ China/ Iran/ Nepal/ Bhutan), who

• At any time, held Indian passport, or

• Who or either of whose father or grandfather was a citizen of India by virtue of Constitution of India or the Citizenship Act, 1955 (57 of 1955)

3) Overseas Corporate Bodies (OCBs) - OCBs are overseas companies, partnership firms, societies and other corporate bodies predominantly owned by NRIs, directly or indirectly, to the extent of at least 60%. This includes any overseas trust in which not less than 60% beneficial interest is held by NRIs, directly or indirectly but irrevocably. OCBs are permitted to invest up to 100% in six specific areas of real estate development.

4) Foreign Companies And Foreign Nationals - Foreign companies and foreign nationals are required to obtain permission of the RBI to acquire, hold, transfer, or dispose of in any manner (except by way of lease for a period not exceeding 5 years) any immovable property in India.

 

The general permission, however, covers only purchase of residential and commercial property

 

 

Can immovable property held in India, be transferred by way of gift to relatives/registered charitable trusts/organizations in India?

Yes. General permission has been granted by Reserve Bank to non-resident persons (foreign citizens) of Indian origin to transfer by way of gift immovable property held by them in India to relatives and charitable trusts/organisations subject to the condition that the provisions of any other law, including Foreign Contribution (Regulation) Act, 1976, as applicable, are duly complied with.

 

 

What are car parking charges & is it necessary to pay, as I don't have a car?

Car parking charges are different for all properties. Service tax applicable on car parking charges are 3.6%. You have to pay even if you don't have a car.

 

 

Why should I pay for super-built-up area when I get to use only carpet area?

It is by default you have to pay for super built up area. You get to use the common area like stairs, balconies etc.

 

 

How to register your property?

The original property document to be registered along with a copy is to be presented with the concerned Sub- Registrar by the Seller. Both Seller and the Purchaser are present before the concerned Sub- Registrar who admits the execution of the document.

The sub- registrar after making the due inquiry registers the documents and returns the original document to the concerned party.

 

 

What is lease hold property?

A lease hold property is a property held under a lease.

 

 

What is free hold property?