The Konkan region of Maharashtra has emerged as an ideal place for investing in real estate. More people are looking to invest in the area than ever before, whether they are looking for second homes, weekend retreats or long-term capital growth. Many of these buyers are looking at the Ratnagiri, Sindhudurg and Raigad areas and the coastal areas around them as possible options.
Before any purchasing decisions are made, it is important for buyers to be knowledgeable about the differences between NA plots vs agricultural land.
What Is Agricultural Land?
Under the Maharashtra Land Revenue Code, it is generally prohibited for someone who is not classified/included within their Agricultural Registration (Agriculturist or Non-Agriculturist) to acquire Agricultural Land.
So, if you are not an Approved/Registered Farmer, Agricultural Land may be a challenge/disadvantage to buy or hold as an investment due to Legal Restrictions and Barriers to Ownership.
While cost-wise, Agricultural Land today is normally less expensive than NA Land, once converted, there are limitations to how (fully) it can be utilised.
What Is an NA Plot?
NA (Non-Agricultural) land has been cleared with the appropriate authorities for residential, commercial, and other non-farming purposes.
Individuals, businesses, and investors can buy NA plots without the restrictions of agriculture, as opposed to agricultural land.
For those looking to build villas, holiday homes, resorts, homestays, etc., NA plots are available and provide an uncomplicated and legally sound investment opportunity.
Construction Rights: The Biggest Difference
Agricultural Land
Building without prior official request for land conversion, such as to build a house, a farmhouse, or any other type of commercial structure, will result in possible legal penalties and future complications.
NA Plots
Buyers wishing to develop a parcel of land are particularly interested in purchasing an NA plot, since they can begin construction at any time after receiving the local municipality's approval and fulfilling any applicable site plan and zoning requirements.
Evaluating Investment Potential
Farm Land
Typically, farmland has a lower purchase cost and therefore attracts long-term buyers seeking inexpensive places to store capital until appreciation occurs.
Nevertheless, appreciation typically depends solely on future infrastructure development, land conversion potential, and regional growth. Also, as the market for farmland is smaller than that of NA plots, there may be limited liquidity in the farmland market.
Non-Agricultural Plots
Due to their ability to be built on immediately, NA plots are generally priced at a greater premium than farm land. The current growth in the tourist areas of Konkan has created a demand for vacation homes, rental villas and lifestyle investments, causing greater demand and therefore, more opportunity for resale on NA plots.
Loan Eligibility and Financing
Agricultural Property
Most banks do not provide regular home loans for agricultural property purchases. Because of this limitation on financing options, Initial Cash is usually required to purchase the land.
'Non-Agricultural' plots
There are many lending institutions that will offer loans for these types of properties, so they are generally available to a wider range of buyers than agricultural properties.
Watch Out for "Proposed NA" Land
In Konkan, many plots of land have been identified as "Proposed NA", but this generally does not mean the plot is eligible to be rezoned (legally converted from Agricultural to Non-Agricultural zoning). If you are going to make an investment in the area that is identified as "Proposed NA" but has not yet received an approved NA order, then you will want to make absolutely sure you do not pay the price associated with the approved NA order until you have verified the NA order with the responsible government authority.
You cannot depend on CRZ (Coastal Regulatory Zone) regulations to protect yourself from being told that you can build on the plot. Even though most of the CRZ regulations are designed to protect against construction on the water, there are some exceptions if there is a new development project underway. It is critical to check the CRZ boundaries of coastal properties and to confirm through written documentation and/or with the local government whether there are any limitations on your ability to build on the property.
Confirm Road Access and Necessary Utilities
You must confirm that your land has a clear title and legal access by obtaining legal due diligence (land type) on your land from these documents:
* Your latest 7/12 extract (Satbara)
* Documentation proving property ownership
* Mutation documents
* Documentation of any encumbrance(s) on the property
* Documentation showing a history of ownership for the previous 30 years
* Documentation showing the proper subdivision of the property.
Final Thoughts
Prior to any investment, ensure that you know whether or not your investment purchase is legally valid, the type of land to be purchased, how to access infrastructure associated with your investment, and whether your investment is within an area that can expect future growth. A well-documented property that is valid today may turn into a valuable asset over time and may even become one of Maharashtra's fastest-growing coastal locations.