Preferential Location Charges in Real Estate: How to Calculate PLC?

When you finally decide to buy your dream home, you come across several costs and real estate terms that you might
have never heard in your lifetime. PLC – Preferential Location Charges might be one such term you might not have
encountered until you are completely immersed in the actual real estate game. PLC charges play a crucial role in
determining the overall cost of a property. It is important to learn everything about it in order to make an
informed decision about your real estate purchase.

What Is A Preferential Location Charge (PLC)?

A Preferential Location Charge is an additional price applied to your unit that gives you the opportunity to enjoy
additional benefits within the project. These benefits can range from higher floors for better views to corner homes
for better privacy. For instance, a sea-facing apartment has more appeal than a standard apartment with no
sea-facing balcony in the same project. Similarly, higher floors on high-rise buildings that offer panoramic views
are preferred over the lower floors in the same apartment. PLC charges are levied upon buyers to relish these perks.

Types Of Preferential Location Charges

• Floor-wise PLC: Charged for higher floors that offer spectacular views and other perks that come with elevation
  in high-rise buildings.
• View-based PLC: Charged for desirable views, i.e. for units overlooking parks, pools, sea, lakes, etc.
• Amenities-based PLC: Charged for proximity to amenities within the apartment like clubhouse, pool, etc.
• Accessibility-based PLC: Charged for accessibility to main roads, commercial hubs, etc.
• Corner Plot and End Flats PLC: Charged for privacy, natural lighting, and more ventilation.

Factors Influencing PLC Rates

There are a wide range of factors that influence the PLC charges. Below are a few of them.

1. Location: Location plays a major role in deciding the PLC charges. The benefits of living in a prominent
   location range from easy connectivity to access to exceptional views.
2. Market Trends: An increase in demand for housing projects in certain areas increases the possibility of PLC
   charges too. Buyers, especially investors, are willing to pay higher amounts for projects that align with the
   latest real estate market trends.
3. Project Type: PLC rates for projects vary according to the type of project, i.e., luxury projects and budget
   projects have different PLCs.
4. Builder’s Discretion: Every project would have a different Unique Selling Point(USP). PLC charges can be
   calculated according to these USPs.

Calculating PLC in Real Estate

As mentioned above, PLC charges in real estate are dependent on many factors and therefore they vary from project to
project. Builders have full discretion in deciding the PLC charges. However, to learn how the final PLC charge is
calculated, let us understand the super built-up area and the real estate developer‘s rate card.

The super built-up area can be calculated by adding the carpet area to the area covered by shared spaces like
corridors and elevators. To calculate PLC, the super built-up area is considered per square foot. The developer’s
rate card is the information that real estate builders offer with the details of specific PLC per square foot
decided based on the features provided.

Impact of PLC on Property Value

1. Cost Implications for Buyers

If you select a unit with a PLC applied to it, the overall cost of the property will increase. Buyers need to
account
for these premiums when budgeting for a purchase.

2. Comparison with Base Price

While the base price provides a starting point, incorporating PLCs can lead to substantial increases in total
expenditure. Buyers should compare properties with similar base prices but different PLCs to assess overall
value.

Understanding PLC charges in real estate is crucial for making an informed property purchase. PLCs enhance the overall value of a property by offering added benefits such as stunning views, enhanced privacy, and convenient proximity to premium amenities, making it a worthwhile investment. By knowing the types of PLCs and the factors influencing these charges, buyers can evaluate whether the premium aligns with their preferences and budget. With this knowledge, you can make a confident decision and choose a home that meets your lifestyle needs while staying financially prudent.

FAQs

1. What exactly are Preferential Location Charges?

Preferential Location Charges are additional fees for properties located in premium spots within a project,
offering benefits like better views or proximity to amenities.

2. How do I know if I’m being charged fairly for PLC?

Compare the developer’s rate card with market standards and consult independent real estate experts if needed
to ensure fair pricing.

3. Are there any regulations governing how developers apply PLC?

There is limited regulation on applying PLCs; hence transparency from developers is crucial for understanding
these charges.

4. Do all properties come with a PLC?

Not necessarily; only those with specific preferential features such as prime location attributes will have
associated PLCs.