For generations, Indians have parked their savings in residential property, assuming valuations will only climb. Yet, liquidating an older apartment today paints a much bleaker financial picture.
The modern secondary housing market heavily favors new luxury projects, leaving sellers of mass-market resale flats battling a rapidly shrinking buyer pool. A combination of mathematical asset decay and aggressive new tax policies actively depletes the seller’s final payout.
From a standard 5% annual structural depreciation rate to the government’s recent removal of long-term capital gains indexation benefits , holding an aging flat is an increasingly unprofitable strategy. Sellers are further penalized by steep transaction frictions, including standard 1% to 2% broker commissions and arbitrary society transfer fees that often bypass the legal INR 25,000 cap through forced “donations”.
The following analysis breaks down exactly why exiting a real estate investment in India frequently results in severe capital erosion.
