To buy investment before first house: the big dilemma

One of the most frequent questions first time home owners are face with is: should I buy investment land before a first house? After all, buying land and selling land can be quite important. Well, the answer to this question is a matter of pure priorities.

Here, there are two things at play; one being investment, where you buy land for the same reasons. The other factor is owning a home, a place to hang a hat after a busy day and enjoy quality time with the family. To buy land for investment sure seems like the most prudent choice but well, it might not always be so.

Let’s get into some economics now, shall we?

As tempting as buying investment land seems, there are a lot of downsides to it. I f the land location is in a rural setting, the optimality of the investment reduces. The appreciation rates of its value are pretty low and the costs of developing it like water, road and septic connections are quite high.

Secondly, the speculative nature of land prices make you depend on your ability to predict future price. In the meantime there are taxes and insurance expenses on the land that you have to deal with.

Buying a house after all is not such a bad idea as it may act as an investment in case you sell in future.

Why Outsiders Are Prohibited From Buying Land in Jammu

Jammu and Kashmir is a predominantly Muslim state in northern India. The state forms part of the Kashmir territory that is claimed by India, Pakistan and India. It enjoys a special autonomy within the Indian Union as granted by Article 370 of the Indian Constitution. This special autonomous status allows the state to have its own flag and constitution.

There’s a notion that outsiders cannot buy land in Jammu and Kashmir because of the restrictions placed by Article 370. Well, that’s not entirely true. The Constitutional provision gives the Indian government mandate over the Jammu and Kashmir’s defense, foreign affairs, communications and ancillary matters. The implication of this provision is that the legislations emanating from the Indian Parliament don’t apply in the area, except laws that touch on the Indian government’s mandate over the state.

Article 370 was introduced in 1947 and came into force in 1950. However, the prohibition against Indians from other parts of the Union to buy land in Jammu and Kashmir goes back to 1846 when the Dogra Muslim community bought the territory from the British. These laws called, State Subject Laws, were adopted to prevent outsiders, including the British, from grabbing land in the area. While speaking in the Lok Sabha in 1963, Nehru lauded this old rule stating that Kashmir can be a target by the wealthy who can buy all the available land at the detriment of the locals. According to him, that is the real reason the law has been in application for more than a century and why it should continue.

It’s clear that the special autonomy enjoyed by Jammu and Kashmir has allowed it to retain the laws from the Dogra king era. There are many calls for the abrogation of these laws. However, the Indian government cannot overrule them because its hands are tied by Article 370. The area has greatly benefited from these prohibitive laws. For instance, the state’s government has been able to carry out land reforms that have made the region’s economy inclusive. Today, only 3 percent of the households in the state live below the poverty line as contrasted to 26 percent in the other parts of India.

Jammu and Kashmir is not the first Indian state that restricts foreigners from buying land. Other regions with similar restrictions include Arunachal Pradesh, Himachal Pradesh, Andaman & Nicobar Islands and Nagaland.

About

Is it just us or does it feel like more and more local pubs are closing down every single day? We have heard a lot of people talking about there being a lack of community these days, but when the pubs are all closing down, then what do they expect?

Well, never fear, as we have just revamped and opened a new local pub called The Carousel and we have no plans of shutting it down for quite a long time. We want to bring back that sense of community and the feel of those old local pubs, where everyone is friendly and welcoming. So come on down and say hi, first drink is on us.