8 Expenses First-Time Property Buyers Need To Know
Since this is a time of festivities, this finally could be the right moment for those who have been looking for a perfect time to invest in real estate. However, before you decide to invest in real estate, you need to be aware of several hidden costs related to this investment.
Buying a house on your own can be a difficult task since several numbers of technicalities are involved. But you are not the only one who has felt that way, millions before you went through all this and survived and the major factor responsible for their success is an organised plan. If you do your homework, you’ll have the best possible chance of finding a place you can afford for a price you can handle. Here are a number of charges involved in buying a property.
Basic cost: In the initial stage of buying a property, the buyer has to pay the sum to the builder or the seller of the property, depending on the calculated amount based on the are bought. This basic price is computed by multiplying carpet area with the per square feet price.
Other builder charges: after taking care of the basic cost, the next thing that comes is other builder charges. The builder charges involve parking charges, infrastructure development charges including local water, electricity, maintenance and other amenities, power back up, preferential location charges in case of premium view or floor-rise costs etc.
The potential buyer also needs to note that these are not the only charges involved, in fact, the preferential location charges (PLC) can fall anywhere between Rs 25 to Rs 100 per sq. ft. or even higher and form the part of the total apartment cost. The floor rise premiums are based on the climate of the respective city. For example, in NCR region the investor needs to pay more for the flats or apartments closest to the ground, on the other hand, in Bangalore as well as in Mumbai the buyer needs to pay more for the flats high off the ground.
Brokerage: To get the best deal i.e. the final amount of the property you like a broker is needed. The broker will also help you in consulting as well as negotiating. All of this will be done on your behalf and hence you need to pay a commission fee to the broker. Usually, the percentage of his commission is usually based on the price the property has been sold at.
Property tax: The potential buyer is required to pay the property tax, which involves locality, build-up area, basic cost, age criteria etc. At present, real estate is not included in the new indirect GST regime through various proposals to this effect have been made.
Goods and Service Tax (GST): Most of the time the property that you are interested in buying is under construction, under that circumstance the investor is required to pay the GST put forth by the property developer on the property. Currently, GST for such a property stands at 12% of basic sale price of the property.
Stamp Duty: At the time of registration, the buyer needs to pay for both stamp duty and for registration as well. In addition to that, there are other legal charges like the fees of the lawyer and notary.
Home Insurance: This is one of the most significant things an investor needs to consider after buying a property. An insurance will safeguard your property in case of fire, quakes, theft an even natural calamity
Other miscellaneous charges: The miscellaneous charges involve TDS of 1% for properties worth more than Rs. 50 lakhs. In addition to that, there are several other charges such as legal advisory, documentation charges, loan processing etc.