5 Charges Related to Purchasing a Home in India
Buying a home is a dream that is aspirational. In fact, purchasing a residential property is one of the most significant investments of a person’s life, and people often go out of their way to buy a property that is ideal for their family. Hence, it is not uncommon to see, that most of the people do not mind using all their financial resources, and even procuring a loan, in a bid to buy their dream home.
However, quite a few people forget the fact that the cost of a home isn’t confined to the one quoted by a real-estate agent. There are numerous other charges that a home-owner needs to take care of. And sometimes, these raise the budget by as much as 25%. It is for this very reason that you must be aware of these costs ahead of the big purchase.
Registration cost is mandatory and one of the most significant expenses related to buying a property. This generally includes:
- Registration Fee: 1-2% of the total cost of property
- Stamp Duty: 5-7% of the total cost of property
- The Fee of the Legal Counsel: 1% of the total cost of property
- Notary Charges: Variable
- The Fee of the Lawyer: Variable
Hence, if you’re planning to buy a house worth 10 Lakhs, then the overall charges for registration may fall anywhere between 70,000 to 1 Lakh.
Given that the amount is a hefty one, you ought to give it due diligence while finalising your budget.
Unless you are planning to buy or construct a bungalow, bear in mind that you will be charged an additional fee for parking space, especially in large residential properties. The amount varies depending on the city and the location of the property as well as the type of parking facility.
While the Supreme Court has passed a law against the sale of parking space in March 2012, most developers still charge the same, either upfront or as a part of the cost of the home.
Loss of Interest, Rental Income, and Tax Rebates
It is often seen that new projects get delayed by months or even years due to a wide variety of reasons. This may lead you to incur certain losses, such as the additional payment of interest towards Home Loan Offers. Moreover, in case you wish to earn rental income from the said property, you will be deprived of the same. Then again, you will only be able to enjoy tax rebates on your housing loan, after the construction is complete, and the property has been handed over to you.
Since most properties get delayed by 6-12 months, you should consider the same, and have the necessary room in your budget.
Cost of Interiors
More often than not, before moving in a new or used residential property, one needs to make specific additions to the interiors, as per the needs and preferences of the family. While most buyers don’t account this cost, this is something inevitable.
Present-day developers levy an upfront maintenance charge ranging from anywhere between 5-15 years. While it is advantageous to the developers as they have access to larger funds for the upkeep of the property, you will be at the suffering end, as it will only magnify the already humongous amount of money that you ought to pay. Hence, it is better to discuss the same with the developer, before purchasing the property.
Above and beyond the charges mentioned above, you may also need to incur other expenses such as civic authority dues, property tax, and so forth. Hence, it is in your best interest to be prepared for the same from the very beginning, lest you will end up biting more than you can chew.
Now that you are aware of the various types of fees that you may be required to pay during the purchase of a home, we hope that you will be better equipped at preparing a budget, and adhering to the same. And once you are done calculating the final costs, go ahead and Apply for a Home Loan that best suits your needs!
Also Read: 5 Ways to Avoid Home Buyer Remorse
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