Under-construction vs ready-to-move
Most new launches in Zirakpur, Kharar, New Chandigarh and Mohali are sold before they are built. You usually pay less than for a ready flat in the same area and you pay in stages, but you take on the risk of delay and you wait — often two to four years — before you can live in it or rent it out.
| Under-construction | Ready-to-move | |
|---|---|---|
| Price | Usually lower, paid in stages | Usually higher, paid at once |
| GST | 5% (1% for affordable housing) on the price | None, once the completion certificate is issued |
| Risk | Delay, changes to plan, builder trouble | What you see is what you get |
| Rent or move in | Only after possession | Immediately |
| Home loan | Released in stages; pre-EMI or full EMI | Full disbursement at registration |
| Home loan tax benefit | Interest during construction claimed in 5 parts after possession (old regime) | From the first year (old regime) |
What RERA protects — and what it doesn’t
- Registration first. A project must be registered with Punjab RERA (or Haryana RERA for Panchkula) before it is advertised or sold. Check it yourself — see how to verify RERA registration in Punjab.
- Advance cap. The builder cannot take more than 10% of the price before signing a registered agreement for sale.
- Escrow. 70% of the money collected must go into a separate account for that project’s land and construction.
- Carpet area. The price must be stated on carpet area, the usable floor area inside the walls.
- Delay. If possession is late, you can claim interest for the delay, or withdraw and claim a refund with interest. Estimate it with our possession delay interest calculator and read how to claim delay interest.
- Defects. The builder must fix structural defects reported within 5 years of possession.
Payment plans explained
| Plan | How it works | Watch out for |
|---|---|---|
| Construction-linked (CLP) | You pay in stages as work progresses: booking, foundation, slabs, brickwork, finishing, possession | Ask for a written stage schedule. Pay only when the stage is actually done — visit the site |
| Possession-linked | A small amount upfront, most of the price at possession | Usually priced higher. Check what “possession” means in the agreement |
| Down payment | Most of the price upfront, often for a discount | Your money is locked in; highest risk if the project stalls |
| Subvention / no-EMI-till-possession | The builder pays your loan interest until possession | If the builder stops paying, the bank comes to you. Read the tripartite agreement carefully |
For most buyers a construction-linked plan is the most balanced. Whatever the plan, every payment should go to the project’s bank account named in the agreement, against a receipt.
Home loan: pre-EMI or full EMI?
The bank releases your loan to the builder stage by stage. With pre-EMI you pay only interest on what has been released until possession, then the full EMI starts. With full EMI (tranche EMI) you start repaying principal from the first release.
On a ₹60 lakh loan at 8% for 20 years with 30 months to possession, full EMI saves about ₹9 lakh in interest and finishes the loan about two years earlier. Pre-EMI helps if you are paying rent at the same time. Compare your own numbers with our pre-EMI vs full EMI calculator, or read pre-EMI or full EMI: how to choose.
Checks before you pay a token
- RERA registration — your tower or phase must be covered, and the registration valid beyond the promised possession date.
- Approvals — sanctioned building plan, change of land use (CLU) where needed, and environmental clearance for larger projects.
- Title — who owns the land, and whether it is mortgaged to a lender. Banks that have approved the project are a useful signal, not a guarantee.
- Builder record — visit two of the builder’s completed projects. Ask residents whether possession was on time.
- The draft agreement — read the possession date, the delay compensation clause, the cancellation terms, and what is included in the price.
- All-in cost — add GST, stamp duty, registration, parking, club and maintenance deposits. Use the total property cost calculator.
Taking possession
- Completion / occupation certificate — ask for it before you take possession. Without it, water and power connections and resale can be difficult.
- Final measurement — check that the carpet area matches the agreement. A difference of more than a small margin should change the price.
- Snag list — inspect every room: seepage, cracks, plumbing, electrical points, doors and windows. Write it down and get it signed. Our handover condition report helps.
- Registration — the conveyance or sale deed is registered at the sub-registrar after full payment. See registration in Punjab step by step.
- Defect liability — note the possession date. Structural defects reported within 5 years must be fixed by the builder.
Frequently asked questions
Is it safe to buy an under-construction flat?
It can be, if the project is RERA-registered, the builder has delivered projects on time before, and you pay in line with actual construction. The main risk is delay, so check the builder’s record and the RERA completion date before booking.
How much GST is charged on an under-construction flat?
5% of the price for regular housing and 1% for affordable housing (broadly, up to ₹45 lakh and within carpet-area limits). There is no GST on a ready flat sold after the completion certificate is issued.
Can the builder ask for more than 10% before the agreement?
No. Under RERA, the builder cannot take more than 10% of the price as an advance or application fee before entering into a registered agreement for sale.
What can I do if possession is delayed?
You can file a complaint with Punjab RERA (or Haryana RERA for Panchkula) and claim interest for every month of delay, or withdraw from the project and claim your money back with interest.
Is subvention (no EMI till possession) a good deal?
It reduces your cash outgo during construction, but the loan is in your name. If the builder stops paying the interest, the bank will ask you to pay. Read the tripartite agreement and keep track of payments.
Can I sell an under-construction flat before possession?
Usually yes, by transferring the allotment with the builder’s consent, but builders often charge a transfer fee and the bank must agree if there is a loan. Check the transfer clause in the agreement.
