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Owning a piece of coveted real estate in a prime location is a matter of pride indeed. More so if you’ve slogged the shirt off your back to make that lucrative purchase and hope to reap golden returns on the investment. It also has a flip side to it. Did you know there are some hidden costs involved in your purchase that you should factor in with a magnifying glass before you sign along the dotted line?
Most top developers of repute swear by transparency and spell out each and every clause of property purchase and explain in detail what you need to pay for and what comes to you as an exclusive offer.
Nevertheless, here is some of that fine print you should scrutinize thoroughly as your responsibility as a smart buyer:
Stamp Duty
Stamp duty is a compulsory fee that you have to pay the State Government when you buy any property. This is a mandatory payment in order to enable the registration of your property. Without paying the Stamp Duty, you will not be allowed to register property. Stamp Duty varies between 5 % to 7 % from State to State in India. In Karnataka, the present Stamp Duty fee is 5 % of the total or registered property value above Rs 45 lakhs, 3% for all properties worth up to Rs 45 lakhs, 2%, for properties worth up to Rs 20 lakhs, and 3% for properties worth more than Rs 20 lakhs but less than Rs 45 lakhs.
Registration fee
Registration is the full and final legal agreement between the buyer and seller indicating change of ownership from the builder to you. In order to obtain this crucial legal document, you will need to pay the local court the Registration Fee for it. The Registration Fee in Karnataka is 1 % of the property value.
Surcharge
In addition to the Stamp Duty you will require to pay the cess of 10% and a surcharge of 2% for properties priced above Rs 35 lakhs in urban areas, and 3% in rural areas.
GST
While the Goods and Services Tax (GST) is not applicable on ready homes/property which has a Completion Certificate, you will need to factor in the GST of 12 % on one under-construction. Yes, you will need to factor in this extra hidden cost if you are not clued in with the new GST regulations.
Property inspection charges
If you are planning to obtain a housing loan from a bank, they may want to inspect the property you plan to purchase to ascertain its existence and worth as well as to check if the developer is one of repute and has a good track record of completion of the construction. The bank will, no doubt, charge you for the inspection.
Preferential location charge
Each home with a view comes with its own perks and of course, in tandem, an extra cost. You heard that right. If you yearn to live in a penthouse overlooking the sea, lake or mountains, prepared to pay a prized sum for the unique view. Most developers charge extra for the higher floors; so it makes sense to know this aspect before you buy that home with a scintillating view of the surroundings even if it is worth every bit.
Maintenance/Society Security Deposit:
The apartment owners association or society come together to fix the maintenance charges and vary from society to society. This figure is not usually cited in the cost, but it does make up the final bargain. These costs include payment for security guards in the society, maintenance of roads within the housing colony/society, maintenance of parks and lawns, and lighting fixtures. It can also include club membership in the gated enclave.
Interiors
While some developers are transparent and upfront about the extra costs involved in doing up the interiors exclusively for each homeowner, this is an unavoidable cost you will need to pay if you want to move in soon. This includes painting, plumbing, carpentry, electric appliances, sanitary ware, etc.
Parking space
You will need to pay extra for the car park in your new apartment complex. The cost can depend largely on the location you live in, the size of the available parking space, if it’s a prime slot in the apartment such as near the entrance, etc.
Brokerage fee
If you are planning to buy a property through a brokerage firm or realtor, first ascertain if the company/person is RERA registered. RERA has made it possible for homebuyers to research the credibility of the realtor and if they are legal members of this real estate governing authority. The brokerage fee or commission is usually paid to the realtor by both the buyer and the builder of the project. The prevailing average brokerage rate is 2% which is shared equally by the realty agent and the builder.
Keep these factors in mind when you plan to buy the property and you cannot go wrong in your decision, ever.
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