The short comparison
| Question | Plot | Flat |
|---|---|---|
| What you own | A defined piece of land | A unit plus an undivided share of the land under the building |
| Use from day one | None until you build | Live in it or let it once complete |
| Rent | Nothing until a house is built | Rent from handover |
| Loan | Banks lend on approved plots, usually on stricter terms | Widely available on approved projects |
| GST on purchase | Sale of land is outside GST | Due on an under-construction flat; not on a completed one |
| Upkeep | Fencing, cleaning, guarding against encroachment | Monthly maintenance to the association |
| Control | You decide what and when to build | Building rules and the association decide most things |
| Main risk | Unapproved layout, bad title, encroachment | Delay, poor build quality, missing completion papers |
Neither is better in general. The rest of this article explains each row so you can decide for your situation.
What you actually own
With a plot, you own the land itself, measured and marked, with its own khata (the local body's property record) and survey or site number. You can build within the planning rules, rebuild later, or sell the land as it is.
With a flat, you own the unit and an undivided share of the land the building stands on, called the UDS. You cannot sell or build on "your" share of the land separately. Over the decades the building ages while the land stays; how much of the value sits in the land depends on how large your share is. Ask for the UDS in the sale deed and check it against the project's total land area.
Money: loan, GST and running cost
Loans. Banks lend on plots in approved layouts on converted land with clear title and a proper khata. Terms are usually stricter than for a flat, and some lenders lend only if you plan to build within a set time. Our guide on home loans for a plot explains which plots banks accept. Flats in approved, registered projects are easier to finance.
GST. The sale of land is outside GST, so a plot carries none on the land price. An under-construction flat attracts GST on the price; a flat sold after the completion certificate is issued does not. Ask the builder whether the quoted price includes GST.
Stamp duty and registration apply to both, on the higher of the price and the guidance value. See stamp duty and registration in Karnataka and guidance value and market price.
Tax. Income-tax relief on a home loan relates to a house, and what you can claim depends on the tax regime you choose. An empty plot generally earns no such relief until a house is built on it. Ask your chartered accountant before you count on any deduction.
Running cost. A plot needs a fence, periodic clearing, the property tax, and someone to check it. A flat needs monthly maintenance, a sinking fund, and its share of repairs to lifts, pumps and the structure.
Risk: what goes wrong with each
Plots
- Unapproved layouts. A plot in a layout without approval from the planning authority, or a revenue site, may never get a clean khata or a building plan. See layout approvals in Karnataka.
- Title gaps. Land titles in Karnataka often pass through several generations. Read the RTC (pahani, the land record), mutation and title chain; see every paper to check before you pay.
- Encroachment. An unbuilt, unvisited plot can be fenced or built on by someone else. Fence it and visit or have someone visit.
- Services. Roads, drains, water and power must exist on the ground, not only on the brochure.
Flats
- Delay. Under-construction projects run late. Check the project's K-RERA registration and its quarterly updates.
- Completion papers. Without a completion or occupancy certificate, the flat may face problems with khata, water and power connections, and resale.
- Build quality. You cannot see the foundations or the wiring. Read the specifications and look at the builder's finished projects.
- The association. How well the building is run, and what it costs, depends on the residents' association.
Papers for each
For a plot, the core papers are the RTC and mutation, the conversion order, the approved layout plan and release order, the e-khata or e-swathu record, and the encumbrance certificate. For a flat, ask for the K-RERA registration, the approved building plan, the title of the land the builder holds, the agreement stating your UDS, and, for a ready flat, the completion or occupancy certificate and the khata for the unit. In both cases, get copies before you pay a token and have your own lawyer read them.
Use, rent and resale
If you need to live in it soon, a ready flat is the shorter path. A plot means buying, then designing, getting a building plan, and building, each with its own time and cost.
If you want rent, a flat earns from handover. A plot earns nothing until you build.
If you want to hold for the long term, land does not age, and you keep the choice of what to build. Its value depends heavily on what happens around it: road widening, town limits extending, new services. A plot in an approved layout with a proper khata, good road access and water is far easier to sell later than one that lacks any of those.
Resale. A plot with clean papers usually sells on the strength of the land and its approvals. A flat's resale depends on the building's age, upkeep, the society and the completion papers.
Questions to settle before you choose
- Do you need to live in it or let it within two or three years?
- Can you fund the construction after buying the plot, or only the purchase?
- Will someone you trust check on a plot regularly?
- Are you comfortable with a monthly maintenance charge and an association making decisions?
- Is the plot in an approved layout, or the flat in a K-RERA registered project with a track record?
If you choose a plot, see our site visit checklist before you go. If you want to see what a finished plotted layout looks like, our Kempegowda Layout in Mudigere has approved, DC-converted sites on 9 m cement roads, with water, power and drains brought to every site, and banks lend on the sites.
How we help
We help first-time buyers compare a specific plot with a specific flat, check the approvals and title on either, and estimate what each will cost beyond the price. Start with our advisory service, or tell us what you are weighing up.
