Ever noticed about big display hoardings on the roadside with flashing message?
A 2-BHK (1,000 sq. ft.) residential apartment, with ultra-modern facilities; just 10-minute drive away from the heart of the city @ Rs 3,000 per sq. ft; Book Now!
If yes, it grabs your attention immediately and you instantly do your calculations i.e. 1000×3000, which comes out to be just 30 lakhs. Great! This fits in your budget and you want to grab this opportunity as early as possible.
Beware! This is not the actual cost of the property that you have calculated. In addition to this there are many hidden costs involved that could increase your total property value. As a smart property buyer, you should be aware of all such hidden charges and need to think beyond BSP (Basic Sale Price).
Here we have mentioned some hidden charges that you should consider before investing in property in India.
Infrastructure Development charges:
Infrastructure development charges are one of the most prominent hidden charges and you can easily see them on your cost break up sheet. Usually charged per sq.ft., IDC are utilized for the development and maintenance of infrastructure around the project. These are generally charged at Rs. 50 to Rs. 70 per sq. ft.
Asking for an additional upfront payment in the form of utility charges in large residential complexes has become a trend nowadays. Utility charges cover club membership fee, parking charges and abounding more. The price asked for parking space depends upon type of parking space being allotted to buyer (covered/non-covered/semi-covered). This amount could vary from 2 lakhs to 5 lakhs. Similarly, membership of club houses also accounts for a significant amount. This may be charged on a yearly basis or for a lifetime.
Preference Location charges:
Looking for sea facing apartments or corner apartment? If yes, then get ready to pay preference location charges. These costs are to be paid for the unit that has a certain location advantages over other units in the project. PLC is a premium charge that calculated per sq. ft. of the super area of the flat. It depends on size, project type, number of floors in the building, location, etc. These charges may range between Rs 25 to Rs 100 per sq. ft.
Costs spend on maintenance of society parks, roads, street lights and other basic facilities come under the category of maintenance charges. In addition, power backups and water are also included in this. Maintenance charges are levied on a regular basis, however one can pay on a monthly, quarterly or yearly basis.
Stamp Duty and Registration Charges:
Stamp duty and registration charges are the two mandatory charges that are paid by the buyer at the time of property registration. These charges are levied even if the property is transferred through a gift deed. Generally, the range of stamp duty varies between 5-7% (for most states) and a registration fee is about 1-2% of the property cost. In some states, women buyers benefit because of a concession. All these charges can actually add a staggering 10 percent on your total property value.
Service tax is levied on under construction property. The effective rate on the total cost of a property below Rs.1 crore is 3.50% and for a property above Rs.1 crore, the effective rate on the total cost of the property is 4.2%.
Are these hidden expenses giving you a headache? There could actually be more to it, like the expenses for doing your security, interiors etc. So, be extra careful and plan your budget by adding these addition costs in your total property value.
For more updates about property related matters, visit Superise.com