Real estate glossary

48 property terms used in India — area definitions, title documents, regulation, taxes, home loans and investment metrics.

Area & pricing Legal & documents Regulation Costs & taxes Home loans Investing & market

Area & pricing

Carpet areaUsable internal area: The usable floor area within the walls of a unit, excluding external walls, shafts, balconies and terraces. RERA requires agreements to state carpet area.
Built-up areaCarpet + walls + balcony: Carpet area plus the thickness of internal and external walls, ducts and usually the balcony — typically 10–15% above carpet area.
Super built-up areaSaleable area: Built-up area plus a proportionate share of common areas such as lobbies, staircases, lifts and clubhouse. Often used in brochures to quote a lower-looking ₹/sqft.
Loading factorCarpet-to-saleable gap: The percentage by which super built-up area exceeds carpet area. Commonly 20–30% in mid-segment projects and 30–40% in amenity-heavy high-rises.
Price per sqft (₹/sqft)Rate benchmark: Property price divided by area. Only comparable when both quotes use the same area definition — ideally RERA carpet area.
FSI / FARBuildable ratio: Floor Space Index or Floor Area Ratio — the permissible built-up area as a multiple of plot area, set by the local development control rules.
Floor rise chargePer-floor premium: An extra charge per sqft levied for higher floors in a tower, often ₹25–₹100 per sqft per floor.
PLCPreferred location charge: A premium for advantaged units — park-facing, corner, road-facing or a preferred block.
Micro-marketSub-locality cluster: A small, internally consistent property market — usually a locality or corridor with its own demand drivers and rate band.

Legal & documents

Title deedProof of ownership: The registered instrument establishing legal ownership of a property, naming the parties, extent and boundaries.
Mother deedRoot of title: The earliest parent document tracing the origin of ownership, from which the chain of subsequent sale deeds flows.
Sale deedTransfer instrument: The registered document that actually transfers ownership from seller to buyer on payment of the consideration.
Encumbrance certificate (EC)Charge history: A sub-registrar record showing registered transactions and mortgages against a property over a chosen period, usually 13–30 years.
Khata / Patta / 7-12 extractRevenue record: State revenue records identifying the assessed owner for property tax purposes. Names differ by state — khata in Karnataka, patta in Tamil Nadu, 7/12 in Maharashtra.
Occupancy certificate (OC)Fit for occupation: Local authority certificate confirming a building was completed per the sanctioned plan and is fit for occupation. Required before possession.
Commencement certificate (CC)Permission to build: Authority approval allowing construction to begin after plan sanction and statutory clearances.
Completion certificateConstruction closure: Certificate that the project has been completed in accordance with approved plans and applicable norms.
Conveyance deedSociety handover: The instrument transferring land and building title from the promoter to the housing society or apartment owners' association.
Power of attorney (PoA)Delegated authority: A registered authorisation for another person to act in a property transaction. General PoA sales carry significant title risk.
DC conversionLand use change: Deputy Commissioner order converting agricultural land to non-agricultural residential or commercial use.

Regulation

RERAReal estate regulator: The Real Estate (Regulation and Development) Act, 2016 and its state authorities — mandating project registration, carpet-area sales, escrow of 70% of collections and delay compensation.
Defect liability period5-year builder warranty: Under RERA, the promoter must rectify structural or workmanship defects reported within five years of possession.
Escrow accountRing-fenced funds: The dedicated project account into which a developer must deposit 70% of buyer collections, usable only for that project's land and construction cost.
Circle rate / Guidance value / Ready reckoner rateGovernment minimum value: The state-notified minimum property value used to compute stamp duty. Known as circle rate in Delhi NCR, guidance value in Karnataka and ready reckoner rate in Maharashtra.
Master planCity land-use blueprint: The statutory development plan setting zoning, road networks and permissible land use for a city over a planning horizon.

Costs & taxes

Stamp dutyState transfer levy: A state duty of roughly 4–7% charged on the higher of transaction value and the government-notified value, payable at registration.
Registration chargesRegistry fee: A fee of about 1% of property value for registering the sale deed with the sub-registrar.
GST on propertyUnder-construction tax: 1% for affordable housing and 5% otherwise, without input tax credit. Ready-to-move and resale homes attract no GST.
TDS on property1% withholding: Buyers must deduct 1% tax at source on consideration of ₹50 lakh or more and deposit it against the seller's PAN.
Corpus fundSociety reserve: A one-time deposit collected by the developer and handed to the society to fund long-term maintenance and replacements.
Capital gainsGain on sale: Profit on transfer of property. Holding beyond 24 months makes it long-term, with reinvestment exemptions available under Sections 54 and 54F.

Home loans

EMIEquated monthly instalment: The fixed monthly payment covering interest and principal, computed as P × r × (1+r)^n / ((1+r)^n − 1).
LTV ratioLoan to value: The share of property value a lender will finance — indicatively up to 90% below ₹30 lakh, 80% for ₹30–75 lakh and 75% above ₹75 lakh.
FOIRObligation to income ratio: The proportion of net monthly income already committed to EMIs. Lenders typically cap total obligations at 40–55%.
EBLR / RLLRRepo-linked rate: External benchmark lending rate — floating home loan pricing linked to the RBI repo rate plus a spread, reset periodically.
Pre-EMIInterest-only phase: Interest-only payments on disbursed tranches during construction, before full EMI on the entire sanctioned loan begins.
Part-prepaymentLump-sum reduction: Paying extra principal ahead of schedule. Free of penalty on floating-rate loans to individuals and most effective in the early years.
Balance transferLoan refinance: Moving an outstanding home loan to another lender at a lower rate, weighed against processing and legal costs.

Investing & market

Rental yieldAnnual rent ÷ value: Gross yield is annual rent as a percentage of property value; net yield deducts maintenance, tax, repairs and vacancy. Indian residential yields typically run 2–4%.
Capital appreciationPrice growth: The increase in a property's market value over time, historically the main source of return in Indian residential real estate.
YoY changeYear-on-year move: Percentage change in ₹/sqft versus the same period a year earlier — the standard way to compare locality momentum.
Unsold inventorySupply overhang: Completed or under-construction units yet to be sold in a market, often expressed as months of inventory. High overhang caps price growth.
Absorption rateSales velocity: The pace at which available units are sold in a market over a period, indicating demand strength.
Pre-leased propertyTenanted asset: A commercial unit sold with a tenant and lease in place, offering immediate rental income and typically higher yield than residential.
REITListed property trust: Real Estate Investment Trust — a listed vehicle holding income-generating property, allowing exposure to commercial real estate without buying a unit.
Ready to moveOC-received stock: Completed property with occupancy certificate available for immediate possession — no GST and no construction risk.
Under constructionPre-possession stock: Property still being built, sold on a milestone payment plan, attracting GST and carrying delivery risk offset by lower entry price.
Freehold vs leaseholdOwnership tenure: Freehold gives perpetual ownership of land and structure; leasehold grants rights for a fixed term from a lessor such as a development authority, needing consent to transfer.

Guides & blog

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