Purchasing home can be an expensive affair for the family as it is the ultimate aspiration for most of the Indians. There is some hidden or unavoidable Costs To Consider When Buying a House. Most people consider real estate to be an important investment and are willing to spend extra to acquire a quality real estate property. Real estate in India is, in fact, the biggest investment that an average person takes up and, in most cases, it takes the higher scale of the expenditure.
Despite the fixed high expenses, buyers are often taken aback with the hidden costs associated with every property. This becomes extremely difficult to handle. Usually, the initial expenditure put forth by the real estate agent would not include a host of add-on costs which one has to pay for raising the budget to almost 25%. Therefore, its always better to be aware of the additional expenditure that will come across your way when you are purchasing your dream home.
Here’s 5 some hidden or unavoidable Costs To Consider When Buying a House
1. Interiors cost
After you purchase a property you have to shell out from your pocket on getting the interiors done as per your preferences. This cost won’t be revealed initially when you are purchasing your home due to the planning process by the builder. As per your requirements and the exact quality of the interior work it might cost a fortune. On an average, the rough estimate would be 1% of the entire cost of the property.
Aside from these, there will also be interest, rental and tax rebate loss which might cause delays in the project completion and are a common phenomenon in India due to a number of reasons. These delays will not only hinder the purchase of your home but also escalate the overall price.
2. Parking space costs
One of the recent trends in purchasing property is the additional upfront payment for exclusive parking space in huge residential complexes. This amount usually, varies from 2 lakhs to around 5 lakhs depending on the locality, the type of property and the type of parking space provided. Always enquire beforehand about these parking costs and see if it fits within your budget.
3. Registration charges and Legal fees
Always keep in mind the registration costs as this forms a substantial amount. This certainly depends on the size of the party. The legal charges vary from state to state and usually registration fees take about 7% to 10% of the property value. Apart from this, there is also the case of the registration fees which are payable to the court and roughly amounts to 1 or 2% of the property cost. All these expenses have to be managed by the buyer but you must keep in mind that there are other added costs like the fees for the lawyers who get the job done.
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4. Maintenance deposit
Most of the projects have a habit of changing upfront maintenance deposits for a longer period like five years instead of conventional periodic costs. This often falls to your disadvantage as you have to pay a huge amount initially for which you might have paid the interest on the borrowings.
Considering the current trend of inflation, the amount will likely finish earlier so you might be forced to pay another deposit for the maintenance. The reason many developers insist on early maintenance deposit is due to the increased capital flexibility they will enjoy initially.
5. Preferential locality charges (PLC)
PLC is an additional charge which you have to pay for booking a unit in a better location within the existing locality or complex. This differs from builder to builder but normally, premium and reputed projects will have a higher preferential locality charge. For instances penthouses built on top of the buildings and villas with a lake or a garden view command a higher fee. However, it should be noted that unlike stamp duties or registration charges this cost is not fixed and differs from builder to builder.
Aside from the aforementioned costs, there are additional charges such as civic authority dues and other unapproved plans which might add up more. If you want to avoid any complications during the purchase of your home it is advisable to have your overall estimate inclusive of 20 % to 25% over the initial cost of the property. Having a clear knowledge about the add-on costs will assist you in planning your finance properly. Always inquire with the builder and developer about the additional costs before you decide on purchasing your dream property.