Planning to buy a second home in Goa, especially now that the new airport in Mopa is operational? To start with, a prospective homebuyer should know that the Land of Beaches has emerged as a preferred choice among buyers of second homes on account of the high rental yields it offers. These typically range from 4 percent to as high as 15 percent for luxury sea-facing properties.
This tourist destination is immensely popular with Bollywood stars and corporate honchos for the purchase of properties. Media reports say that Abhay Deol purchased an acre of land a few years ago in North Goa. Celina Jaitley had bought a second home in the quaint village of Moira many moons ago. They even say that Priyanka Chopra owns a property located close to Baga Beach in Goa, and Akshay Kumar owns a Portuguese-style bungalow located on Anjuna Beach. Palacio Aguada, a secluded sea-facing property in North Goa is owned by Pinky Reddy, wife of GVK Group Vice Chairman Sanjay Reddy, who purchased it in 2021 for Rs 80 crore, according to media reports.
Before zeroing in on a property in Goa, buyers should keep in mind that unlike some states in North India that offer a partial fee waiver on stamp duty for female owners or joint owners, such waivers are not available for women buyers in Goa. Also, there is a slab system for property registration, which means that the stamp duty is dependent on the cost of the property being purchased.
Most important, make sure that the title of the property is properly vetted by a legal expert, as several land parcels belong to local Goan families and the Church maintains a record of these properties. Buyers also have to be aware of the Coastal Regulation Zone (CRZ) norms and ensure that the sea-facing property that they are buying has a setback of 500 metres from the coast.
"Popular destinations in North Goa are Anjuna, Assagao, Siolim, and Morjim. These locations have become prime owing to easy access to the sea and the presence of cafes and restaurants. These are also easy to buy, rent, and flip. A 3BHK luxury property can set you back by Rs 5 crore to Rs 30 crore. Returns for luxury properties could start at 15 percent per annum onwards," says Ashwin Chadha, CEO, India Sotheby's International Realty.
Upmarket neighbourhoods are those that have access to a beach. The sweet spot is for properties priced at Rs 5 crore to Rs 10 crore. Inventory in this segment is shrinking, Chadha added.
It has been seen that some people who wish to upgrade to a better home in their cities are now preferring to buy a second home in Goa since the rental yield is between 4 and 8 percent, depending on the location of the property.
A 3BHK villa can be rented out for Rs 35,000 a night, while a 6BHK villa can fetch as much as Rs 1.5 lakh a night during the December to January tourist season. Non-season rates are Rs 20,000 a night for a 3BHK villa and close to Rs 80,000 a night for a 6BHK villa, he said.
"These properties find favour among families wanting to holiday together. People don’t want to be closeted in a small hotel room when they visit Goa. They like to bond and socialise in private. Also, social infrastructure in Goa is much ahead of Alibaug or hill stations in North India," he said, adding that almost 50 percent of the people who buy property in Goa are from North India.
Property dealers in Goa say that a 6BHK villa built in traditional Portuguese style with a swimming pool comes with a price tag of Rs 6 crore to Rs 10 crore. These are located in areas such as Nerul, Calangute, Sangolda, and Assagao.
Buyers should look for homes with a clear title and check that the builder has adhered to statutory compliances related to building norms. It is not as easy as buying a floor in Delhi. Knowledge about the local market is important. The loan market is also not as deeply penetrated as other micro-markets. Buyers should be aware that clearances from three government agencies are mandatory ― the CRZ clearance committee, the town planning committee and the panchayat, he said.
The new airport will definitely have a positive impact. "Villa developments will move further north towards Morjim and Tiracol ― close to the Maharashtra border. These areas are bound to see a positive impact," he added.
Locations to consider
Goa offers both independent residences as well as flats or villas in gated communities.
There are villa projects located in Siolim in North Goa. Mapusa is another area where one can look for real estate opportunities. It is a well-developed part of town with good infrastructure facilities in place. Several hospitals, schools, colleges, banks, and public transportation facilities are available in this area.
Candolim is a well-known tourist destination in North Goa. So buying a vacation property there might be an excellent way to earn money from rentals during the busy summer months.
Real estate prices and rentals
Property prices in Goa range from Rs 4,500 per square foot (sq ft) to Rs 12,000 per sq ft. In Goa, a home with a sea view may cost upwards of Rs 2 crore. Properties in North Goa cost more than in South Goa. Rental yields range from 4 to 15 per cent.
"With the Mopa airport becoming operational, North Goa, as well as the nearby Konkan region, is expected to witness price appreciation of around 27-30 percent per annum. Property prices in areas located close to the airport have increased by almost 30 percent. In the past four years, average property prices have risen at a CAGR of 3.9 percent," said Ritesh Mehta, Senior Director and Head - West and North, Residential Services & Developer Initiatives at JLL.
Buyers should also take note that the property dealer may charge a standard commission of 2 percent of the cost of the property from both the buyer and the seller. If you wish to rent out a property, the agent may charge a commission from both parties.
Tax and financial implications on buying property in Goa
Stamp duty and Registration charges: Stamp duty is a compulsory fee that a buyer has to pay to the state government to get the property registered under his/her name. The slabs are as follows:
GST: The GST on under-construction property in Goa is around 5 percent, while for affordable housing projects, it’s only 1 percent. There is no GST on ready-to-move properties or on those projects that have received the completion certificate.
Brokerage fees: This fee is around 2 percent of the total cost of the property. However, some brokers can be expensive and may charge a higher fee.
Maintenance and Society Security Deposit: The maintenance deposit is to be paid to the builders as an advance towards the maintenance of the building and its amenities for up to two years.
Legal fees: Total legal fees can start from Rs 50,000 onwards.
House tax and other fees: If it’s an old Portuguese house, the house tax receipt will show a range of around Rs 500 to Rs 600 a year.
Other taxes include garbage tax, fees associated with the local panchayat, and cleaning fees, among others.
Aspects to keep in mind
Regulatory and legal framework: While Goa has made efforts to streamline its legal framework, navigating the regulatory environment can still be challenging for investors. It's important to be aware of the local laws, regulations, and procedures related to land acquisition, property ownership, permits, and licensing.
Limited land availability: Goa is a small state with limited land availability, particularly in prime locations or areas close to the coastline.
Seasonal nature of tourism: While tourism is a major driver of the Goan economy, it is seasonal in nature. The tourist influx tends to be higher during the peak season (November to February) and lower during the off-season.
This can impact the rental income and occupancy rates of properties, particularly for short-term rentals, say local property experts.
Infrastructure and development disparities: While certain areas in Goa have witnessed substantial infrastructure development, there can be disparities between different regions. Some areas may have limited access to essential amenities such as water supply, electricity, and proper road connectivity. Investors should carefully evaluate the infrastructure development plans and potential growth prospects of the chosen location, they said.
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