Buying a house is a dream for every Indian, and when the dream is fulfilled, it is obvious for the buyer to rejoice the moment. You leave no stone unturned to do everything right when it comes to buying a home, right from choosing the best location, accumulating downpayment, managing budget to housewarming preparation, but when the possession time arrives, you might get some unpleasant surprises from the developer. You will end up paying a hefty amount in various hidden costs than the planned budget.
Registration & Stamp Duty
You cannot afford to ignore the importance of registration fee and stamp duty in the process of home buying. As per the rule, stamp duty is a mandatory fee that a home buyer should pay the state government to get the house ownership name under his/her name. The charges may vary from state to state, and the new rate of Pune is 8%. You would not get ownership of the house legally unless you pay the stamp duty amount.
Registration indicates the change of ownership through a legal process. The court will charge 1% of property rate for the legal agreement. It would be wrong to assume the amount to be small, given the percentage amount. However, it sums up to a considerable amount. For instance, if the cost of the property is Rs. 60 lakh, stamp duty would be Rs. 48,000 and registration fee would be Rs.6000. Thus, the total cost of the property would be Rs. 610800
Service Tax & GST
As per the property law, a buyer of an under-construction property in India has to pay GST (Goods & Service Tax). GST is also paid to the government in a manner stamp duty, and registration has been paid. In Pune, the GST amount for an under-construction property is 5% while for affordable housing it is 1%. No GST is applicable on ready-to-move properties or on those projects whose completion certificate has been received.
Residents living in apartment societies are bound to pay monthly maintenance charges to meet the utility bills of common amenities, salaries of society staffs and other overheads. An advance of 2 to 10 years of maintenance may ask by the new societies which are generally handled by builders. In existing societies, maintenance is charged as a deposit by society members.
Preferential Location Charges (PLC)
Preferential Location Charges (PLC) are the cost that has to be paid for the unit that has a specific location advantage over other units of the same project. For instances, an apartment with a garden or pool facing terrace and floor rise advantages are entitled to pay PLC.
This article excerpt will show light on the various aspects of 4 hidden costs that may soar up the total cost of the house. Make sure to keep these things in mind while considering the purchase of a home.