Is paying a Rs 20L premium for a ready-to-move flat worth it over under-construction?

The Rs 20L difference in base price is just the tip of the iceberg and the actual gap is much smaller once you factor in taxes and cash flow. Let us break down the exact math using your numbers.

For the under-construction property at Rs 80L, you have to pay GST which adds about Rs 4L to your cost. You also have stamp duty, registration, a 1% TDS, and legal fees which bring the upfront extras to around Rs 8L.

Then comes the financing and cash flow problem. If you take an 80% loan of Rs 64L at 9%, you will be paying pre-EMI interest to the bank while the building is being constructed. During this 2yr wait, you are also paying your current rent of Rs 25,000 a month, which burns another Rs 6L.

Add in the mandatory charges for amenities and basic interiors, and your total cost for the under-construction flat lands at roughly Rs 1.14Cr. Now look at the ready-to-move flat with a base price of Rs 1Cr. The biggest advantage here is that fully constructed properties attract zero GST.

While your stamp duty and registration are calculated on the higher Rs 1Cr base, you completely eliminate that Rs 6L rental outgo because you move in immediately. Your full EMI starts right away, but the execution risk is gone. With builder charges and interiors being equal, the ready-to-move flat costs about Rs 1.1Cr in total while the under-construction one costs ~1.15cr

So the real premium you are paying is not Rs 20L, but infact better off by about Rs 5L. Also you assumes the builder actually delivers on time in 24 months. If possession is delayed to 48 months, your pre-EMI interest and rental outgoes double.

In that delayed scenario, the under-construction cost balloons to Rs 1.31Cr, making the ready-to-move property cheaper by Rs 20L. When possession is delayed, you actively lose money every single month. If you value peace of mind and want zero execution risk, the ready-to-move option is often the safer financial choice despite the higher sticker price.

Disclaimer: All information shared above are strictly for educational and informational purposes only. It should not be construed as financial or investment advice.