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.
Car park:
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:
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.
Brokerage fee:
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.
