Additional Costs You Must Consider Before Buying A Home
Choose a location, zero-in on the best project, make the payment and take possession.
We wish buying a home was this easy!
If you have a tight budget and you wish to buy a home, you better be prepared for the following additional charges you will have to pay before and after owning a home.
Preferential Location Charges (PLC): These charges are fixes by the builder based on your preferred floor or preferred direction such as East-facing, corner flat, etc. In addition, most developers charge more for amenity-facing units and garden-facing units as well. If you wish to own a flat on the highest floor, in the desired direction and facing the amenities, you will have to shell out a little more.
Parking Space: When it comes to residential projects in big cities, an additional amount is charged for the parking space of your vehicle. The amount to be charged depends on various factors such as the type of property, location and parking space. Usually, this amount varies from Rs 1 Lac – Rs 5 Lac. Though the Supreme Court of India has ruled against charging an additional cost for the open parking space, a few developers might still charge you for the same.
Maintenance Charges: Nowadays, a new trend has emerged where developers charge upfront maintenance charges. These charges may range from a period of 2 years to 10 years and even for a lifetime in a few places. You will have to pay a good lump-sum amount and bear the interest, in case you have borrowed that amount.
Stamp duty, taxes & registration fees: If you are buying a property that’s under construction, you will have to pay the VAT and service tax. The registration charge is based on the actual cost of your property. The registration fees and stamp duty varies from state to state. You will have to pay approximately 6% to 10% of the property cost as registration fees. About 5% to 7% of the cost of the property forms the stamp duty.
For example – If your property is worth Rs 30 Lac, then you will be required to purchase a stamp of Rs 1.5 in order to get the sales deed typed. In addition, the registration fees of approximately 1% - 2% of the cost of property are also charged and are payable to the court. And this is not all. In addition, the legal counsel assisting in verification and registration of the property will also charge around 1% of the property cost. You will have to take into account all these miscellaneous costs while planning the budget for your home.
Brokerage: Brokerage is the fee charged by the broker – the person who is the middleman between the buyer and the seller. On an average, a broker charges 1% to 2% of the property cost. If your property is worth 30 Lac, you will end up paying 30,000 to 60,000 as brokerage. With the amount of information available online today, however, you can easily save on the brokerage and take up the property search yourself.
Cost of Interiors: Very often, your choice and preferences will differ from those of the builder. Once you take possession of the property, you will make a few changes to the interiors and end up spending quite a lot of money. Usually, when we plan on buying a home, we never think about the amount we will have to spend on the interiors. The amount you spend on the interiors will depend on the type and nature of interior work. On an average, approximately 2% of the cost of property, if not more, is spent on the interiors.
And these are not the only things you should budget for. The reputation of a builder is of prime importance as well. When you are investing so much money in a home, you must make sure that you will get a good quality home and there will be 100% transparency in the transactions. If you wish to buy a home with one of the most renowned builders in South India, take a look at the projects by Akshaya Uncompromise. The group is one of the leading developers and has projects across Chennai, Coimbatore and Trichy.