Buying A Second Home
Buying A Second Home In Uttarakhand: Pros And Cons
In the wake of the COVID-19 outbreak, there has been an uptick in the purchase of second homes in the
real estate sector. While Goa has always been a highly sought-after destination for this purpose,
Uttarakhand is also emerging as a preferred choice for those seeking a second home
The picturesque locations, thriving hospitality industry, and the concept of homestays and wellness have
fueled the interest of aspirational buyers in hill stations and vacation home destinations. Uttarakhand,
including areas in Dehradun, Haridwar, Rishikesh, and Mussoorie, has become a favourite investment
destination among buyers and investors from all over the country. Additionally, cities like Nainital,
Rudrapur, and Chamoli are also attracting the attention of many home buyers in search of a second home.
The Uttarakhand government has recently implemented a 15% increase in the circle rates of land across
the state. This change affects the circle rates of agricultural, non-agricultural, and commercial land.
It is crucial to have a comprehensive understanding of the market when purchasing a property in
Uttarakhand. Here, we examine some of the factors that one should consider before making a purchase
decision.
Advantages Of Buying A Second Home
1. Favourable State Regulations For Property Buying
Uttarakhand welcomes investments from individuals residing outside the state. The government has clearly
defined purchasing restrictions for non-residents. Within the municipal limits of cities, there are no
size restrictions for property or plots. However, for agricultural land located outside city areas, the
rule allows the purchase of only 250 sq metres
This means that members of the same family can buy separate 250 sq metre land parcels, either adjacent
or distant. If the agricultural land is within city limits, compliance with the state’s Land Ceiling Act
is necessary.
2. Diverse Options For Prospective Buyers
Uttarakhand offers many property options, including apartments, villas, plots, and agricultural land. In
high-priced locations such as Dehradun, the state capital, and Mussoorie, a popular tourist destination,
two-bedroom apartments can be found in the range of Rs 6,000-6,500 per sq ft. Plots are available in the
range of Rs 30,000-35,000 per sq yard. Villas or plotted developments are priced from Rs 50 lakhs to as
high as Rs 10-12 crores.
The region has developed as a residential-cum-vacation destination, catering to various types of buyers.
The availability of disposable income has attracted new-age buyers who are willing to invest in second
homes, says a real estate broker based in Mussoorie.
3. Steady Appreciation In Property Rates
Developing and established areas in Uttarakhand have witnessed steady appreciation in property prices across various categories, except for land. Investors have experienced significant appreciation in their investments, particularly in locations like Mussoorie, where the hospitality and tourism industries have flourished.
4. Freehold Properties
All plotted developments in Uttarakhand are sold as freehold properties, making the process of mutation and property transfer easier with the required paperwork. This facilitates smooth property registrations for new buyers.
5. Growing Popularity Of Leasehold Model
With the entry of several hospitality chains, rental incomes from second homes have increased. Many second-home buyers and investors now view their properties as a source of rental income.
Advantages Of Buying A Second Home
1. Higher Property Prices In Key Regions
Properties located strategically in the hills of Uttarakhand come with a premium price tag. Additionally, there is a noticeable difference in prices between ready-to-move-in apartments and those under construction. Prices also vary significantly across different regions. While a typical homestay in Mussoorie may cost around Rs 3,000 per night, similar accommodations in more remote locations can be found for as low as Rs 1,000 per night.
2. Limited Availability Of New Properties
Uttarakhand is becoming increasingly popular among investors and vacation home buyers from nearby cities such as Chandigarh, Delhi, Jaipur, and Lucknow, who are eager to invest in this region for personal use or rental purposes. As a result, the real estate market in Uttarakhand has become highly competitive. However, there is a shortage of new properties, especially in key regions. The limited supply of new properties has driven up prices, making it common for second-home buyers to invest in older properties that require renovation, thus requiring additional funds.
3. High Maintenance And Upkeep Requirements
If you plan to use your second home for personal use, likely, you will only occupy it for around 45 days per year. In this case, you can expect to spend at least Rs 3 lakhs annually on caretaker staff and property maintenance. If you decide to rent out your property to short-term vacation rental companies, your guests’ ratings will significantly impact your property’s success. Therefore, you will heavily rely on the services provided by your caretaker. Considering all these expenses, you may end up spending more on the property than you earn, unless you plan to permanently relocate to your second home.
4. Uttarakhand Land Buying Rules For Non-residents
Uttarakhand has regulations that are favourable to property buyers. The state imposes no restrictions on property ownership, allowing individuals from different states to buy properties in Uttarakhand. There are also no limitations on the size of the property. However, there are certain restrictions on purchasing agricultural land beyond the city limits, with a maximum limit of 2,690 sq ft.
What Buyers Should Do When Buying Land In Uttarakhand
Before investing in a second home in Uttarakhand, buyers should conduct extensive research on the
property, including the reputation of the developer, construction quality, location, promised amenities,
and prevailing property prices in the area. It is advisable to seek assistance from reputable property
consultants who can conduct a thorough investigation on your behalf. Buyers should prioritise investing
in RERA-registered projects to ensure the security of their investments. It is important to be cautious,
as there have been instances of fraud where unsuspecting buyers have been deceived by fraudulent
projects. Several companies in the region have also faced legal action from the Enforcement Directorate
for fraudulent practices. Therefore, buyers need to exercise caution, especially when considering
under-construction properties.
Investing in completed projects or resale properties is generally safer. Additionally, buyers should
only invest if they plan to visit the property regularly or have business interests in the region.
Properties in Uttarakhand with the potential for healthy rental income can be a good investment option
at the prevailing property rates.
Stamp Duty In Uttarakhand
When registering a property in Uttarakhand, certain essential documents need to be provided, including
the original property documents with appropriate signatures. Additionally, an encumbrance certificate,
identity proof, address proof, power of attorney, and property valuation certificate are required.
To register the property, it is necessary to first register it on the online portal:
https://registration.uk.gov.in/. The portal also provides the option to calculate stamp duty and
registration fees through the e-valuation tab on the homepage. By providing the necessary details
online, you can determine the applicable stamp duty and registration fees.
| Stamp duty and registration charges in Uttarakhand | ||
|---|---|---|
| Gender | Stamp duty rates | Registration charges |
| Male | 5% | 2% |
| Female | 3.75% | 2% |
| Joint (Male +Female) | 4.37% | 2% |
| Joint (Male +Male) | 5% | 2% |
| Joint (Female + Female) | 3.75% | 2% |