Buying a residential space is one of the most important financial decisions. While only 70-80 per cent of the total cost of the entire property is funded by the banks, the rest of the amount you will have to arrange by yourself including the additional charges.
Don’t widen your eyes, because every real estate purchase involves additional costs. Have you considered various hidden charges like maintenance, paperwork, and registration charges? Or have you ever given a thought why there is a star mark on price – What are the hidden costs in buying a house?
With all the fees associated with buying a house, making a decision around the same becomes extremely difficult. But Don’t worry! This article will take you through all ‘extras’ associated with buying a house apart from the base amount of the property.
Sadly parking spaces aren’t included in your home purchases in most cases; you separately have to buy a parking space for yourself. According to your apartment and the location you have chosen the sizes, and the charges of the parking space may vary. You can enquire about all the details to the property seller and pay the amount directly to the seller as a separate cost. If you are not interested, the parking space can be purchased by any other person owning a home in the same society.
The seller has full rights to sell the parking space to another member of the society. Adding to the list of the hidden costs – the parking space usually starts from a lakh and goes up to five lakhs. If you have a car, it’s essential for you to have a secured parking space.
Maintenance deposits are the mandatory amount which you need to pay to the builder once you purchase a residential property. The builders charge an advance maintenance deposit of up to 2 – 5 years.
Maintenance charges are usually taken for the common amenities provided by the builder like a garden, gyms, lightings, etc. For the wear and tear of the existing building, every flat owner is charged by the society members. This amount varies from society to society; clubhouse membership is also included in the maintenance deposits. In elite localities, the charges are expensive.
Brokerage usually slips out of our minds while considering what the hidden costs in buying a house are. This is one of the common charges which we have to pay to the broker for being the middleman and helping crack a better deal for the house.
Brokerage fee again differs from broker to broker. Communicate the percentage charged at the initial stage itself with the broker to avoid further disputes.
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Stamp duty has to be compulsorily paid to the state government by the property owner. This amount is basically paid to get the house registered under the residential property buyers name. A sale agreement that is not appropriately stamped is not acceptable as confirmation in the court of law.
The payment of the stamp duty denotes the legal status of the property deal transaction. As per the registration act, the agreement excited between the owner and the developer has to be compulsorily registered. The stamp duty charges might differ from state to state.
The registration document is the final legal agreement indicating the change in ownership of the property. Depending on the total worth of the property, the registration fee is calculated. Usually, the stamp duty and registration fee cost up to 7-10% of the property cost in most of the states.
In addition to this cost, a separate registration fee of 1-2% has to be paid to the court. Miscellaneous expenses like notary fees and lawyers charges have to be borne to get the court work done.
Goods and Services tax
From 1 July 2017, Goods and Services Tax (GST) is introduced. Like stamp duty and registration fees, GST is also paid to the state Government of India. Under the new regime, a buyer will have to pay a uniform 12 per cent tax on the purchase of real estate and all the other indirect taxes will be subsumed except stamp duty.
It is true for under-construction properties, but the ready-to-move-in apartments are excluded from the GST. Affordable housing attracts only 1% GST while the under-construction property is accounted for up to 5%
At The Bottom
Planning your finances is extremely important while planning your home purchase. Before you take the plunge, take efforts in considering all the hidden costs associated with the property deal. Knowing what you have to pay makes the process tension free and smooth for you.