Property refers to any asset—whether tangible or intangible, movable or immovable—over which a person holds legally recognized ownership. In real estate, the focus lies on immovable assets such as land, apartments, and houses. Since these investments often involve substantial financial commitments, it becomes essential to understand their characteristics, tax rules, and potential income benefits before purchasing. 99acres offers a comprehensive overview of various property types to help you make informed decisions.
As per Section 2(6) of the Registration Act, 1908, immovable property includes land, buildings, and hereditary allowances. These assets usually involve significant transaction values, making it important for buyers to be aware of the features, responsibilities, and possible returns associated with each type.
Features of Apartments
General Features
Apartments have become the most commonly supplied housing option across Indian cities. Their rising popularity is attributed to modern designs, updated amenities, and enhanced security systems. Developers often manage essential services like electricity, water supply, and maintenance, making apartments a convenient choice for end users. Moreover, they are widely available across price ranges and locations, offering buyers several options.
Income Opportunities
If you don’t plan to move in immediately, you can rent out the apartment and potentially offset home loan EMIs. Apartments also enjoy higher resale values and attract more buyers compared to individual houses or plots. Although land sees faster appreciation than building structures—which can depreciate over time—apartments still remain one of the easiest assets to liquidate.
Tax Implications
Home loan borrowers can claim tax deductions:
- Up to ₹2 lakh annually on interest for a self-occupied property
- Up to ₹1 lakh on the principal amount
However, rental income from the apartment is taxable.
Features of Plots
General Features
Plots attract buyers who prefer designing and constructing their own homes or seek high capital appreciation. However, building a home requires significant financial planning, covering land cost, construction, professional fees, and labour charges. Loan terms for plot purchases are generally stricter, and the loan amount sanctioned is often lower than that for ready homes, resulting in higher down payments.
Income Opportunities
Plots don’t generate rental income unless you construct a house. However, in a favourable market, plots usually offer better capital appreciation than built properties due to rising land value.
Tax Implications
Loans for plot purchases alone do not qualify for tax benefits. Deductions become available only after you construct a house, and only on the construction loan component. Additionally, vacant plots larger than 500 sq m may attract wealth tax.
Features of Houses / Villas
General Features
Independent houses appeal to buyers seeking privacy without the complexities of constructing a home. While traditional drawbacks include limited security and absence of power or water backup, many modern developers offer villas in gated communities equipped with amenities.
Income Opportunities
Capital appreciation for villas may be lower than that of apartments or plots due to higher initial investment and moderate demand. Rental income can be high, but finding tenants may be challenging due to their higher rental costs.
Tax Implications
The tax benefits available for apartments also apply to independent houses.
Features of Studio Apartments
General Features
A studio apartment consists of a combined living space that includes the bedroom, kitchen, and living area. This format has gained traction, especially among single professionals and frequent movers.
Income Opportunities
Studio apartments generally yield higher rental returns than larger units due to their compact size and fully furnished nature. With increased migration into IT hubs, their demand and capital appreciation potential have risen sharply.
Tax Implications
The same tax deductions applicable to standard apartments extend to studio apartments as well.
Features of Serviced Apartments
General Features
Serviced apartments are fully furnished units designed for short or long stays, providing amenities comparable to hotels but often at lower costs. Their popularity has grown alongside India’s IT boom and rising international travel.
Income Opportunities
These units typically offer attractive returns with low risk. They are often leased for the long term, ensuring stable rental income with minimal involvement from the owner.
Tax Implications
Tax rules applicable to rental apartments also apply to serviced apartments.
Features of Vacation Homes
General Features
The trend of owning second homes in scenic or getaway locations has grown with rising disposable incomes. Vacation homes offer personal leisure benefits while also serving as investment assets.
Income Opportunities
Vacation homes can generate substantial rental income, especially during peak travel seasons. Earnings from short-term stays can help cover loan payments and maintenance expenses.
Tax Implications
Recent reforms eliminated income tax on rent earned from a second self-owned house, provided there is no outstanding loan on it.
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