Advertisements of properties today only give you a first price that is just indicative of the approximate price that you might be paying for the property. Many of us don’t factor in various other costs which make up the total net cost of the property. In many cases once the hidden costs are added you would be shelling out an additional 15- 20% of the amount that you originally assumed. These costs are aside from the interiors decoration costs and floor rise charges in high rise apartments. Some of the costs that you might encounter are
Stamp Duty and Registration
The registration is a percentage of your agreement value. The loan amount that the bank considers excludes this amount. If a builder says that he has waived off these charges, it only means that it is already included in your quoted price.
Service Tax and VAT
The service tax stands at 14% for under-construction apartments and a VAT of 1% on the construction value. This is eventually borne by the buyer.
Loan and Legal Charges
Banks will charge you a fee for the loan processing and generally it amounts to about 0.2% of the total loan value. In case there is legal help engaged for the property then the cost of the legal assistance is another added expense.
Insurance
Home Loan insurance and Property insurance are essential nowadays and certain banks make them mandatory when you take a property loan.
Clubhouse and Maintenance Fees
This amenity service always attracts a sizeable one-time membership fee which varies with each builder. An advance is taken by the builder for maintenance and this amount will be deposited and handed over to the association or will be kept with the property management company to handle unforeseen repairs and expenses.
These hidden costs are not covered by loans and hence you need to make arrangements for the same on your own. So next time you make an enquiry for property prices ensure you ask for the all-inclusive cost.
