What are the various charges involved when buying a flat ?

If you are a new home-buyer, then you may be totally unaware of the kind of costs that are associated with a new home. Buying your dream home can be an exciting process. Yet, it can be scary when you are bombarded with some hidden charges which you were completely uninformed of. There are certain fixed costs such as stamp duty, registration, property tax, service tax, etc., that is known to most of the home buyers. There are other costs that may vary from each project such as parking, club house and maintenance charges. The world is not perfect as these costs may or may not be disclosed to you at the time of estimating the market value of the house and may create an impact on your final decision-making.

·         We give break-down of the expected payable costs attached to the final cost of the house:

1.              Basic Value of the House - Based on the trends of the real estate industry and the economy, the base market value of your house is usually quoted by real estate brokers in ads. You may find that you will get the estimated market value of the new/old home based on inflationary or recessionary trends in the real estate industry. Each location has a separate value based on location, amenities and value of land. The developer or real estate agent will add to this basic value of the house when you are finalizing the deed of the house.

2.              Stamp duty & Registration Costs - Stamp duty is the tax that is paid on the market value of the house to the Government. The registration process gives you the legal right to the property. Stamp duty charges are mandatory by the Government of India and are levied as a percentage of the property value and are different for different locations. For instance, the stamp duty in Gurgaon is  (5%) For women,(6%) for Joint men & Women ,(7%) is for Men and registration charges (1%) add up to the total property value. Service tax of 3.76 %  applicable based on the recent charges.

3.              TDS - The latest entrant i.e. TDS which is 1% of the property value. TDS is applicable if the value of the property is more than Rs. 50 lakh, the buyer has to pay a sum equivalent to 1% of the total value of the property in sellers Pan account.

4.              Property tax - Property tax is charged by local municipal body where you.ve purchased the property in. This will go towards the maintenance of the civic services in that location.

5.              Transfer Charges - Societies may charge you a transfer premium, also known as voluntary contribution, as may be decided by the general body. It can range from 50-250 per sq ft of the total value of the property in Gurgaon . Generally it is a lump sum amount.

6.              Brokerage Fee - Normally, when you hire a real estate agent or a broker to help with your home buying process, you have to pay him a brokerage of about 1 - 2% of the transaction cost. You may negotiate on this as well. But in case builder flat, one need to know the transfer charges levied by the developer.

7.              Other added costs - Some other places where you usually end up paying extra for area . floor rise, car park, PLC (preferential location cost), maintenance cost. Floor rise increases with every floor. Car parking costs are mandatory, it can be included in terms of stilt-parking, covered parking or non-covered parking. PLC and maintenance cost is added by the builder or developer at the time of purchase in case the society is not formed. In the case of old properties, you may have to add this cost to the existing society.

·         Other costs that are payable after the purchase of the property:

1.              Maintenance Charges - When you purchase a flat, you will be using facilities like lift, parking, club house, and the gym. Some buildings also offer added features like security and intercom system etc. As a result of which, you will have to bear this timely share apart from your total value of the property that shall be billed to you as maintenance.

2.              Cost of Furnishing - If it.s not a fully furnished house, you will also have to bear the cost of home furnishing. Electric fittings, plumbing, gas connection, water purification, air conditioning and other customized items for your home that are needed as per your demands will also add to the cost.

·         These costs need to be kept in the forefront before you sign the papers or commit to paying a huge amount of money. The awareness of these added costs could impact your final decision for buying the house. If you are unaware of any costs, it is always better to consult a professional or a reputed broker. This information will only help you to assess your financial capacity to undertake buying a home.