One of the most significant investments you’ll make in your lifetime is a property purchase. But, it is a long-term financial commitment. Whether you are a first-timer or a returning home buyer, you typically face a dilemma while picking a plot or flat – which is the better investment?

Consider critical factors – easy financing, high returns, tax benefits, etc., – before you pick between the two. This article helps you dive deeper into the pros and cons of these two real estate investment options.

Property value

Flats and land both are guaranteed to appreciate over time, depending on various factors. Any new connectivity such as a metro line, transit hub, or road drives growth, brings more people to the area, and ultimately increases demand for your property.

For instance, the under-construction Dwarka Expressway, which aims to improve connectivity from Gurgaon to the NCR region, has increased the value for Gurgaon’s property market. Similarly, localities surrounding the Mumbai metro projects witnessed triple-digit price appreciation within six years.

With rental yields on the rise, the value of flats typically sees an upward trend over time. Similarly, reducing availability of land coupled with rapid infrastructure development, especially in bigger cities, means the value of plots will most likely appreciate.

Flexibility in modification

While age does not affect a plot of land, a flat’s condition can deteriorate with time. Houses often undergo wear and tear and may require remodelling or reconstruction for proper maintenance. Besides, you cannot expand a flat’s area or change its layout in future. Whereas, plots offer higher flexibility in building a structure, be it an office space or a stand-alone residential property.


What is the difference between plot and flat when it comes to income? A readymade house can start fetching rental income immediately after you invest in it. However, a plot will generate no rental income until you construct a house on it. But if you build an apartment on your land and sell the individual units, it will deliver handsome returns in the long run.


Which one is easier to finance between a plot vs flat? If you are purchasing a flat, home finance will easily cover your expenses. However, it can only be used to buy a built-up or under construction home.

While if you are looking to own a vacant piece of land, you can opt for a plot loan. This loan can only finance a plot purchased for residential use.

Tax benefits

If you buy a flat with a home loan, you can avail of tax deduction up to Rs. 1.5 lakhs on the interest paid. Besides, up to Rs. 1 lakh is deductible on repayment of the principal amount. For plots, tax deduction on interest is applicable only after the construction is completed.


Whether you are looking to buy a flat or a plot of land, Tata Capital has tailored home finance offerings for you. Avail of easy loans at attractive home loan interest rates. Enjoy structured EMI plans, flexible repayment options, hassle-free processing, and quick disbursals. To know more, connect today!

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