When it comes to buying an apartment, most individuals are concerned with the price and the interest rate on their mortgage loan. While understanding these fees is critical, they aren't the only charges you'll face on your path to homeownership.
Some costs must be paid in advance, necessitating careful planning and budgeting prior to the purchase of your house. Other charges might be wrapped into your mortgage and paid as part of your monthly payment. It's vital to understand both sets of costs in order to make a successful and economical house purchase.
Purchasing an apartment entails a number of expenses. Before jumping in, it's crucial to understand the various prices and charges that must be paid at various phases of development.
In general, the total property expenses are divided into two parts: one to be paid to the builder, and the other to be paid to the statutory and legal authorities. These are further subdivided into sub-headers. The splits are detailed below.
1) Fees for Stamp Duty and Registration:
Stamp duty is a mandatory tax that the buyer must pay to the state government in order to get the residence registered in his or her name. These fees can range from 5-7 percent depending on the state, and your property will not be registered in your name until the stamp duty is completed. Recording transfer of property with the department of revenue is called registration, it is mandatory, property ownership is a public record, one needs to record the ownership of property with its local sub-registrar of assurances, registration charge is generally 1% of the property value. This may appear to be a modest sum, but it adds up.
2) Deposit for upkeep:
Builders often charge a two-year advance maintenance or maintenance deposit, which is usually categorised under common facilities, parks, and lights. It is charged as a deposit by society members in existing structures in case of any unanticipated damages that may arise in the future. This sum, like other house charges, may add up quickly depending on the quantity of facilities offered or the current maintenance fee. When clubhouse membership is included in the charge, the total sum increases even higher. The quantity varies from city to city, apartment to apartment.
3) Fee for Brokerage:
This isn't technically a secret cost, but it's one of those household expenses that gets overlooked when you're looking for a property. The fee levied by the broker - the individual who acts as a middleman between the buyer and the seller – is known as brokerage. The majority of brokers charge a fee of 1-2 percent of the entire house price; however, certain brokers are more costly and may demand a greater fee. It is preferable to learn about the facts and resolve them with your broker right away. Brokerage, for example, will increase the base cost by Rs 3.75 lakhs in the example above.
4) Ample parking:
With such a scarcity of space in our nation, parking space is unfortunately not included when you purchase a home. This charge may be greater or lower depending on the location you reside in and the size of the available parking spot. This charge is a separate payment that must be paid to the vendor. If you fail to pay this charge, the seller has the right to sell it to another society member. Again, the price of a parking spot is determined by the project's location - it normally starts at Rs 1 lakh and may go up to Rs 4 to Rs 5 lakh, adding to the list of hidden housing costs.
5) Interior Design:
This is the largest and most crucial expenditure - one that cannot be avoided because you cannot move in without suitable interiors. Painting, plumbing, purchasing new or custom-made furnishings, electric appliances, and the list goes on and on. Even with a lot of sacrifice and cutting back, this cost may easily reach Rs ten lakh. While shopping for furniture online may save you money, the cost of interiors is at least Rs 20-Rs 25 lakh if you alter everything and Rs 15-Rs 20 lakh if the basic interiors are already done.
6) GST (Goods and Services Tax):
The Goods and Services Tax (GST) is applied to every under-construction property acquired in India. GST is paid to the government in the same way as stamp duty and registration fees are. The GST on under-construction property is 5%, but the GST on affordable housing developments is only 1%. On ready-to-move-in houses and projects with a completion certificate, there is no GST.
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