What is affordable housing and should you invest in it?
Just like clothes and food, a house is a basic human need. Rapid urbanization and migration to cities…Read More
Millions of people migrate every year from villages to cities in the hope of a better life. Cities offer better employment opportunities along with improved civic facilities. With Indian cities bursting at the seams, finding an adequately-sized dwelling has become a persistent issue. The limited supply of real estate in most cities has also led to a substantial jump in property prices, which has made homeownership unaffordable for many. While the government is promoting affordable housing, another alternative can be to opt for a housing unit on the periphery of a city or town. When you leave the city limits, the gram panchayat comes into play.
The Indian governance system works on the concept of decentralization. The third tier of government, also known as local government, like municipal corporations in cities and gram panchayats in villages have been given certain powers like collecting property tax, besides other income avenues. In lieu of the income from various sources, the local bodies take care of community services like education, waste management and transportation. Due to the powers devolved to local bodies, municipal corporations and gram panchayats are the owners of the land falling within their respective jurisdiction. The land falling within city limits comes under the jurisdiction of the municipal corporation, but land parcels on the periphery of cities are generally under gram panchayats.
Gram panchayat property in Maharashtra
Ram Manohar lives with his family of four in Mumbai. He moved to the metro city over 30 years ago and has been living in a rented place since then. Ram Manohar is planning to buy a house, but property rates in Mumbai are unaffordable. A dealer suggested buying a property in gram panchayat jurisdiction on the periphery of the megacity. After thorough research, Ram Manohar realized property rates in gram panchayat areas in Boisar and Palghar are one-fifth of the rates in the city.
A lot of area on the periphery of major cities in Maharashtra comes under the jurisdiction of gram panchayats. Earlier gram panchayats were only allowed to lease the land under their jurisdiction. Several court rulings have, however, come in the favor of allowing gram panchayats to sell land under their jurisdiction for non-agricultural purposes, including construction.
Advantages of gram panchayat property
The most apparent advantage of a gram panchayat property is the low cost of acquisition when compared to a property situated within municipal limits. Besides the low cost, living in gram panchayat areas offers the benefit of living a life beyond the hustle and bustle of the city. Gram panchayat property is a compelling buy for the purpose of investment too as it offers higher capital appreciation potential as compared to the saturated housing markets in the cities.
Disadvantages of gram panchayat property
If you are accustomed to enjoying world-class infrastructure in the cities, gram panchayat property may disappoint you. The level of infrastructure development in gram panchayat areas is generally low and some of the facilities like sewerage, water supply, etc. may not be up to the mark. Connectivity can be an issue too as gram panchayat areas are under-development areas and infrastructure and civil facilities take a few years to normalize.
Points to note
Most of the gram panchayat land is used for agriculture. The first thing to keep in mind while buying a gram panchayat property is the conversion of land use. One cannot construct on a piece of land marked for agricultural activities. The status has to be converted into residential before construction. The authority to convert the land use does not lie with the gram panchayat, but with the collector of the area. Before buying the land, one should verify the name of the jurisdictional authority of the area. The collector generally allows the conversion of the land after the payment of the applicable fees. In many cases, the conversion of land status is not possible. To mitigate the risk of getting entangled in legal processes, one can opt for a zone certificate to prove the land has been demarcated for residential use. While building any structure on the land, do not forget to get all the approvals from the local bodies and follow gram panchayat layout rules and guidelines.
Buying a gram panchayat land may be a suitable investment for many, but one should make a comprehensive analysis before signing on the dotted line. If finance is an issue while buying, you can rest assured as home finance companies provide funds for buying or building a house on gram panchayat property. Hero Housing Finance can help you fulfil your dream of owning a home in a peaceful area. Opt for a home loan from Hero Housing Finance and take a step towards having a place you can call home.