Most people while buying a home do not have a complete idea of the costs involved, most advertisements and brochures do not include the entire cost involved and when confronted with these extra expenses consumers get stressed as these costs are quite substantial.
So, it’s quite important to research regarding all the costs involved and prepare the resources and contingency funds in case of a shortfall.
Stamp duty and registration fee:
Post purchase your apartment needs to be registered in your name to completed the ownership process. For this you need to pay stamp duty and registration fee to the government. The stamp duty is in the range of 5-7% of the property value whereas the registration fee is about 1-2%. Thus, together these charges will add an additional 6-9% to the total cost of your property.
Preferential location charges (PLC):
In case you have bought an apartment in a highrise or a residential complex, then the builder can charge you for preferential location like the top floors or ground floors or an apartment overlooking a water body, or a garden. The charges vary from city to city and also depend on how luxurious the complex is. It can range from Rs 50-500 per square feet, adding quite a significant cost.
Interest-free maintenance deposit:
Interest free maintenance will be charged by the builder at the time of possession; this fee is for the maintenance and repair of the facilities inside the complex and ranges from Rs 50-100 per square feet. Clubhouse membership is another similar charge over and above the price of the apartment that has to be paid, ranging between Rs 50,000- 3 lakh the charge is generally compulsory.
Depending on whether your car parking space is covered or uncovered and the whether the complex is premium or normal, the charge can vary from Rs 1 Lakh- 5 Lakh.
Service tax is paid by the builder to the government; generally this cost is passed on by the builder to the buyer, assuming that the service component is about 25% of the total cost, at 14.5% of this the actual cost to the buyer comes to about 3.5%.
Value-added tax (VAT):
Builders have to VAT (Value Added Tax) to the government on buildings under construction, this tax is charged on the construction material.
In case you have bought the apartment through a real estate agent then you will have to pay a brokerage fee. The fee generally ranges from 0.5-2% of the cost of the apartment.
As you can see there are a lot of costs involved while buying a home and it is advisable to research properly before you consider purchasing property.