NEWS

January 10, 2025

by Franch

Hidden Expenses: Additional Costs When Purchasing a Property

Buying a property is a significant milestone in one’s life, and it often represents a long-term investment. However, when purchasing a property in Chennai, it is crucial to consider not only the purchase price but also the additional expenses that come along with it. These hidden costs can catch buyers off guard if they are not adequately prepared. In this blog post, we will explore some of the additional expenses that buyers should be aware of when purchasing a property in Chennai.

1. Registration Fees: One of the significant expenses involved in property purchase is the registration fee. In Chennai, properties must be registered with the appropriate government authority, and the buyer is responsible for paying the registration fee. This fee is usually a percentage of the property’s value and varies depending on the property type, location, and value. It is important to factor in this cost when calculating the overall budget for your property purchase.
2. Stamp Duty: Stamp duty is another expense that buyers must consider. It is a tax levied by the state government on the property transaction. The stamp duty rate in Chennai is a percentage of the property’s value or the agreement value, whichever is higher. The exact percentage may vary depending on the property type and location. It is advisable to consult with a legal expert to determine the applicable stamp duty for your property purchase.
3. Brokerage Fees: Many buyers engage the services of real estate agents or brokers to help them find a suitable property. While these professionals provide valuable assistance in the property search and negotiation process, they charge a brokerage fee for their services. The brokerage fee is typically a percentage of the property’s value and is usually shared between the buyer and the seller. It is essential to factor in this expense when calculating your budget to avoid any last-minute surprises. Thankfully brokers such as FRANCH  REALTY have transparent pricing which allows buyers to plan their finances better.
4. Legal and Documentation Charges: When purchasing a property, legal and documentation charges are unavoidable. These charges include fees for legal assistance, drafting and registration of agreements, and obtaining various certificates and clearances. The cost may vary depending on the complexity of the transaction and the legal assistance required. Engaging a competent lawyer or legal expert can ensure a smooth and hassle-free property purchase process.
5. Maintenance and Association Fees: After purchasing a property, ongoing maintenance and association fees are additional expenses that buyers need to consider. In Chennai, many residential complexes and gated communities have homeowners’ associations or maintenance bodies that charge monthly or annual fees for the upkeep of common areas, amenities, and other shared services. These fees can vary significantly depending on the size and facilities of the property.
6. Property Tax: Property tax is an annual tax levied by the local municipal corporation on the property’s value. The tax amount is based on factors such as the property’s location, size, and type. It is important to factor in property tax while budgeting for your property purchase to ensure you are aware of the ongoing financial obligations associated with property ownership.

Conclusion: When purchasing a property in Chennai, it is vital to consider not only the purchase price but also the additional expenses that come along with it. Registration fees, stamp duty, brokerage fees, legal and documentation charges, maintenance and association fees, and property tax are some of the key expenses to be aware of. By factoring in these costs during the budgeting process, buyers can make more informed decisions and avoid any unexpected financial burdens. Being financially prepared will contribute to a smoother and more enjoyable property buying experience in Chennai.