It is a great feeling to own a home! It’s no mean feat, by any means. After months of house hunting, comparing properties, sorting out the details and also paying a significant sum of money you think it’s over. You can finally enjoy the sense of security and freedom in the comfort of your own home. But when buying a property, the process hardly ends with just down payments and EMIs.
There are often a few extra charges to look out for, that you will least expect. It amounts to you shelling out more than what you had estimated at the start. To help you navigate the unknown territory of these additional costs, we have compiled a list of six hidden costs that you need to be aware of before buying a property.
Advance Maintenance Deposit
Before sealing the deal by signing on the dotted line, you may be asked by the builder to pay you a maintenance deposit. This substantial amount is asked for in advance for a specified period of time like a year, two or in some cases even up to 10 years. The exact cost may vary depending on the location and the cost of services offered.
Preferential Location Charges
You might have seen property ads that highlight the location or the views they offer. Who doesn’t love a home with a view, right? But, for such properties the price tends to shoot up once you choose those properties. In real estate terms, this is known as ‘Preferential Location Charges’ or PLC. This can result in a 5-10% increase in your property price.
Parking Space Charges
Parking space is vital for any household. While most people assume the property comes with free parking, it’s actually not. Parking spaces can cost you anywhere between Rs 1-5 lakhs depending on the builders and the property. For additional parking space requirements, you need to shell out a few lakhs more. So, while estimating your property costs, add in a couple of lakhs extra.
This one is pretty much a given as you need to legally register your property after buying it. Stamp duty charges are usually between 7-8% of the property value. Additionally, you will have to pay 1-2% of the property value as registration fee to the court. Also, don’t forget about the fee for the lawyer or notary, property tax and bank inspections.
You should definitely include an additional interiors cost to your property cost estimate. The cost will, of course, vary according to the type of interiors you would want. Add to that the basic utility costs like plumbing, electrical works, painting, furniture and fixtures. The cost you would have to bear would start from at least 2 Lakhs and above.
Apart from these five major extra expenses, there might also be a few other costs like moving charges levied by the movers and packers, a brokerage in case a broker is employed in the deal, and other tax-related updates like an elevated tax mandate. These could shoot up your cost by a reasonable amount.
For many, buying a home is a huge milestone. If you keep these concealed costs in mind, you would be better prepared. You can reasonably estimate how much you money you would and thus can plan your savings accordingly. This will help you avoid unwanted confusion and headaches later on.
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