Aug 17, 2023

Preferential Location Charges in Real Estate

by Godrej Properties Limited

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What is PLC?

The meaning of PLC in real estate is "Preferential Location Charges," which is a document that provides information about the location, zones, land use, and other legal aspects of a property. It helps potential buyers or investors understand the property's status and any regulations that might apply to it.

What Are The Types Of Preferential Location Charges?

Preferential Location Charges (PLC) in real estate are extra costs charged for specific advantageous locations within a project. The types of PLC can vary depending on the developer and the project, but here are some common types:

  • Corner Unit: Additional cost for units located at the corners of a building, offering better ventilation and views.
  • Higher Floor: Extra fee for units located on higher floors, providing better views and potentially more privacy.
  • Sea or Waterfront: Specific to coastal areas, this charge applies to units with views of the sea, lake, or other water bodies.
  • Road Facing: Extra cost for units that face main roads or arterial streets, offering better accessibility.
  • Premium View: Charge for units with premium views, such as cityscapes, monuments, or other attractive landmarks.

PLC availability varies, subject to developer policies and local regulations, enriching property options with tailored features for interested buyers.

How Is PLC Calculated?

The calculation of preferential location charges for a preferred property location varies based on factors like project type, city location, and climatic conditions. Real estate developers may also charge higher for low-rise floors, luxury projects, etc.

PLCs are calculated as follows:

PLC = Rate on the real estate developer's PLC rate card × Super area of the apartment.

How Does PLC Impact Property Prices?

Here is how Preferential Location Charges (PLC) significantly influence property prices:

  • Enhanced Value: PLCs contribute to property prices by recognising the worth of specific locations within a development.
  • Appealing Advantages: You may be charged a higher PLC for properties with advantageous aspects like better views or proximity to amenities.
  • Buyer Attraction: Buyers are willing to pay more for preferred locations due to perceived benefits, increasing property value.
  • Property Appeal: PLCs elevate the overall appeal of development, making it more competitive in the market.

Conclusion

Preferential Location Charges (PLC) play a pivotal role in real estate pricing, reflecting the added value of specific property locations. While PLCs offer advantages, they contribute to the dynamic landscape of real estate, shaping property values and buyer choices.

 

Frequently Asked Questions

1. How much is GST on preferred location charges?

Answer: Until March 31, 2019, GST was 12% (excluding 1/3rd of land value) for residential property and 8% for select schemes. Starting April 1, 2019, to boost real estate, GST was lowered to 5% (excluding 1/3rd of land value) for residential apartments.

2. What are FRC charges?

Answer: FRC, or Floor Rise Charges, pertain to additional fees that a property owner may charge for a flat/apartment located on one of the upper levels within a multi-story building.

3. What is floor PLC in real estate?

Answer: PLC refers to Preferential Location Charges in real estate pricing.

4. Can you buy a property without paying a preferential location charge?

Answer: Yes, properties can be purchased without paying preferential location charges (PLC).

5. Is there scope for bargaining on preferential location charges?

Answer: Yes, negotiating PLCs with developers is often possible during property purchases.

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