What is plc in real estate?

Hello. I recently encountered this term called PLC while looking for a house. I enquired about the same and understood its importance while buying a property. So, let me help you with the PLC full form in real estate.

PLC meaning in property

PLC, known as the Preferential Location Charges is a term in the real estate industry which refers to the application of additional charges over the basic sale price of a house in a building. This can also be understood as the extra charge extracted by builders for a housing unit in a building based on the better location it offers. 

Let me share an example for you to understand. In Mumbai, apartments on the higher floors are expensive in comparison to the ones on the lower floors. This can be because of factors, such as reduced noise pollution, lower humidity, a better view, etc. An apartment which has a beautiful park face will be costlier. 

Determining factors for PLC

1. The main contributing factor is the floor you select for your apartment. Every floor has a set PLC that is the same for each house on a particular floor. 

2. The PLC is also dependent on the climate and topography of the real estate project. Like I said earlier, higher floors are in demand in Mumbai. While in Delhi, people prefer lower floors for houses. This is because Delhi is prone to earthquakes and leaving the building through the stairs is easier for people on the lower floors.

I hope you now know what is PLC in construction.

PLC is real estate or Preferential Location Charges is an extra amount paid by the buyer to enjoy certain amenities that he/she does not have access to otherwise. The PLC charges are levied by the developers in two cases; either the height of the apartment or flat and the views and other amenities a flat or an apartment enjoys. These charges are also known as floor rise premium. 

The PLC Charges are calculated based on the super built up area of the property. The charges differ for each project, its location and floor of the property. 

The example of the PLC charges in real estate, especially for the residential complex is as follows:

You are looking for a sea-faced apartment in Mumbai and you find one as per your preference, the developer of the property will share the cost of the property with you and additionally intimate you about PLC applicable. If the super-built up area of the property is 1800 sq. ft and carpet area is 1400 sq ft., the PLC will be calculated on the super built up area. The PLC can be applicable between Rs. 100 to Rs. 500 per sq ft in such a case as per developer’s discretion. 

Please note that the PLC is usually applicable on luxury projects. But these days, developers levy PLC on many projects irrespective of its scale and scope. 

Now that we know PLC meaning in real estate, let us look at the taxation on PLC.

PLC is indeed taxable for a full rate of service tax without any abatement.