Definition
Under-Construction Property
An under-construction property is a home still being built and not yet ready for possession, usually bought from a developer before completion.
It is typically cheaper than a ready home and paid in stages linked to construction milestones, which can ease cash flow. The risks are real, though: completion can be delayed, the final product may differ from what was promised, and GST applies to under-construction homes (unlike ready-to-move ones). RERA registration, a deposit of buyer funds in a dedicated account, and disclosed timelines reduce — but do not eliminate — these risks.
Buyers should verify the RERA registration, the developer's track record, all approvals, and the construction-linked payment plan before committing. The potential price advantage must be weighed against delay risk and the cost of paying rent while waiting for possession.
Related terms
- RERARERA, the Real Estate (Regulation and Development) Act, is the Indian law that regulates the property sector to protect home-buyers and bring transparency and accountability to builders.
- Ready-to-Move PropertyA ready-to-move (or ready-possession) property is a completed home you can occupy immediately after purchase, with no construction delay risk.
- Pre-EMIPre-EMI is the interest-only payment a borrower makes on a home loan during the construction phase, before the full EMI (principal plus interest) begins on possession.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.