When it comes to buying a home, the buyer is more likely to shell out a lot of money than planned which is ultimately because of the many hidden costs that they’re unaware of. However you look for affordable buying rates, loans and interest rates, you always miss out on the many other bumps that complicate the end-process. Have a look at the extras, one by one here in this blog and plan your budgets accordingly.
#1. Stamp Duty
This is a mandatory fee that is paid to the State Government by the buyer for registering the purchased property in their name. Stamp duty fee usually ranges between 5-7% and it differs from state to state. This is neither skippable nor avoidable as the property won’t be registered under your name unless the Stamp Duty is paid.
#2. Registration fee
Registration fee charges are 1-2% and this fee is basically paid to the court for the change of ownership. However, it can’t be ignored just like that as they together sum up a lot of money. Say, the basic cost of your home is 70lakhs. You roughly ought to pay 1.4lakhs as Registration fee alone.
#3. Maintenance Deposit
This is basically the amount that you pay for the amenities and facilities that you enjoy in your living community. You’re right, the more amenities you’re offered, the more you pay! An advance maintenance is charged by builders in new buildings and in existing buildings, it is charged by the society members. This amount is variable based on every society and the area that the property is located at.
#4. Parking Charges
Again, parking charges are also dependent on the location of your property and availability of the parking space. Sadly, this is never included in the cost of the house. The seller rolls this out for a separate cost and he has all the rights to sell it to anybody in the society who pays the prescribed amount.
#5. Preferred Location Charges
To book a particular unit which is in a better location or position within the particular project, you need to pay PLC. Unlike, stamp duty or registration fee, this is not fixed and it varies from builder to builder and location to location. For instance, if you want to live in the top most floor of a project that has the most beautiful city view, you need to pay extra for it. Yes, you’re basically charged for THE VIEW.
Service charges and Value Added Taxes are charges that are paid to the government. They have to be paid for any under-construction property that is purchased within India. Service tax is generally 12-25% and VAT varies from 1-5.5% of the value of the under-construction property.
#7. Cost of interiors
Some builders might tell it outright to you but in many cases when you get a fully-furnished home, there’s a huge cost that it engulfs. From painting to plumbing to furniture, it all comes with its own price.
#8. Broker Fee
Though this is not a hidden cost, it mostly slips out of your mind when you’re in the urge to booking your dream home and obviously, broker is the one who took you through this and you want to be grateful to him. Most brokers charge 1-2% of the total base cost of your home. It would be better if you fix the exact amount in the onset of your home search itself than bullying around him in the end.
There is no way to avoid or skip these charges. All you have to do is just keep these in mind and draft your final budget and then jump into the process. Happy Planning!