NEWS

Owning a home is a matter of pride and ambition for many people.It comes a sense of security and freedom. Buying a house can’t be done without detailed financial planning. 

The first step in buying a house needs to be understanding and evaluating the actual cost of ownership of the house. Contrary to expectations, there will be a difference between the cost of ownership projected by the builder or seller and the actual cost of ownership. As the demand increases, developers, who need to survive amidst tough competition, come up with attractive offers and discounts which will not clearly advertise what a buyer needs to pay. 

Some of the additional expenses you may need to pay while purchsing from a builder are :

Registration costs( Stamp duty+GST )

Stamp duty is a mandatory tax levied by the government on property transactions. This authenticates the sale agreement and acts as evidence of a sale or purchase of a property. Stamp duty usually varies between 7-8% of the property value. 1-4% of the property value has to be paid as registration fee to the court. This figure varies with each state.

Also, you have to include the fee for the lawyer or notary who will inspect all the necessary paperwork, verify if the developer has the required approvals, and have the paperwork in place for you. In addition, you may also have to shell out a little extra to cover home insurance (optional), property tax, and bank inspection costs.

 In case you are purchasing an under-construction property, you will also be liable to pay GST on it. The GST is calculated at 1% – 5% of the property value.

Advance maintenance deposit

 Property maintenance charges can significantly impact the cost of the house. Builders may collect these in advance for a year or two, and this amount could run into lakhs depending on the size and location of the property and apartment complex.

Location matters

Once you choose a property with a view, or on a particular floor , the price shoots up. These are Preferential Location Charges (PLC)or Floor Rise Charges (FRC) in real estate terms. This increases your property price by a good 5-10%. 

Parking space

Parking is a vital element, and your own closed parking space increases the value of your house during resale.

Although this ‘additional’ expense is not a hidden cost any more, many people still assume their property comes with free parking.

Depending upon the type of the property, location and other factors, developers can charge you anywhere between Rs 1 to 5 lakhs for a parking space.

Interior design

Your property budget should definitely include an additional interiors cost. This might vary, depending on the type of interiors you want for your house. Plumbing costs, electrical work, painting charges, new furniture, additional design work and fixtures that you may want to install – account for all these and more. Interior design charges could be anywhere starting from 2 lakhs to a blank cheque, depending on how you want your home to look and the type of the materials you choose.

Miscellaneous charges

Other costs that you probably won’t be prepared for when you are saving up to buy a property are the moving charges. When you move to a new house, you will have to pay the movers and packers a reasonable chunk of money.

If you are buying a house with the help of a broker, then 1-2% of the property value has to be paid as brokerage.