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Buying an Under-Construction Property? Here Are the Key Mistakes to Avoid

With the growing demand for smart living, modern homebuyers prefer under-construction properties for their flexibility, customisation options, and better layouts. Unlike ready-to-move-in homes, under-construction units often come with trendy amenities and more affordable pricing. However, many first-time buyers unknowingly commit errors that can lead to financial and legal hassles later. If you're planning to invest in an under-construction home, here are seven common mistakes to avoid: 1. Ignoring GST Charges Many buyers are unaware that Goods and Services Tax (GST) applies to under-construction properties. The applicable GST varies: 1% for affordable housing 5% for non-affordable housing Ensure you're factoring in GST while calculating the total purchase cost to avoid unexpected financial strain later. 2. Not Verifying Delivery of Amenities It s common to ask about the possession timeline, but buyers often overlook the status of amenities. Promised facilities such as clubhouses, swimming pools, or gyms might still be incomplete when you move in. Always get written confirmation about when amenities will be delivered to avoid future disappointments. 3. Skipping Price Comparison Although new projects can be attractive, don t overlook resale options within the same project. Sometimes, investors looking to exit early offer better deals than the builder. A little research can help you find the same unit at a lower price. 4. No Clear Exit Strategy Buyers often ignore the exit clauses in the builder-buyer agreement. Be aware of the terms related to reselling or cancelling the property. Knowing your rights can protect you if your plans change. 5. Overlooking Payment Terms and Penalties Developers offer various payment plans, including: Down Payment Plans Construction-Linked Installments Each plan comes with clauses that could lead to penalties for delays in payment or possession. Review these terms closely to avoid late payment charges or, worse, losing your initial deposit. 6. Ignoring Flat Cancellation Rules Previously, many builders enforced a strict no-refund policy. However, the Supreme Court now caps the cancellation deduction at 10% of the property s base price. Avoid projects where the builder demands more than this limit. 7. Not Clarifying Customisation Scope Before booking, understand how much customisation the builder allows. Some may let you change: Wall colours Tile designs Fixture finishes Check whether these changes come with extra charges, and get everything in writing to avoid disputes. Bonus: Don t Skip the Expression of Interest (EOI) Details Paying a token amount or EOI helps secure your unit. However, make sure to document this payment and clarify the refund policy in case you decide not to go ahead. This step protects you from potential fraud or confusion with the developer. Final Thoughts Buying an under-construction home offers many benefits, but only if you proceed with caution. Always verify taxes, penalties, customisation options, timelines, and documentation before making a commitment. With careful planning and awareness, you can avoid common pitfalls and make a confident investment in your future home.