Floor Area Ratio (FAR) of a project is an important indicator of the density of the project and how much a home there would cost. We explain what exactly the FAR is and its importance for home buyers

RERA Licensed Real Estate Agent in Hyderabad

The floor area ratio (FAR) or floor space ratio (FSR) denotes the maximum floor space that can be constructed on a given piece of land. In other words, it is a ratio between a building’s total constructed floor area and the land area. It is also known as Floor Space Index (FSI) in some markets.

## Understanding Floor Area Ratio and its calculation

The FAR of a project is the total floor area of the building (including the space covered by all the floors in the building) divided by the area of land on which the project is being constructed. The FAR is decided by municipal corporations or the development authority, according to the Development Control Regulations (DCR) and varies from one city or even locality, to another.

### Example

If the size of the plot or land being used for a project is 500 sq ft and the FAR determined for that particular city/locality is 1.5, then, the total floor area that can be constructed will be 750 sq ft (500×1.5). As the maximum space available on the ground floor will be around 500 sq ft, hence, with the remaining built-up area of 250 sq ft, it is possible to construct just one more floor. Therefore, considering the plot area and the FAR applicable in that particular locality, a developer would be permitted to construct a one-storey building.

## The importance of FAR for home buyers

The FAR value is determined by local municipal corporations, to ensure the best possible living conditions for residents in that area, keeping in mind the density of the population, availability of open spaces, environmental impact of the project and preparedness in the eventuality of a natural disaster.

However, the resale value for a project with low FAR, will most likely be higher than for a property that was in a high-FAR project. This is because a low-FAR project usually means shorter buildings, lesser population density and more open areas around the project.