Buying Your Dream Home? Here are a Few Hidden Costs to Look Out For

By Lodha

Almost all of us grow up with the dream of buying our own home. Your home is a safe haven that provides security and freedom to build a solid foundation for a good life. However, buying a house is not a walk in the park; it can be a capital-intensive affair requiring detailed financial planning. Whether you save up for a home or apply for a housing loan, having an idea of the costs is a must. What a lot of first-time buyers do not know is that purchasing a home comes with an array of hidden costs that can add up to the buying price. If you want to ensure you factor in such charges while planning your finances and choosing a property, here is a handy guide to all the hidden costs you should be aware of as a potential homeowner.

Stamp Duty:

Just like other purchases, when you buy property, you have to pay tax. Stamp duty is one of the taxes associated with real estate transactions. Since stamp duty is a mandatory tax, there is no hack to avoid paying it. Paying stamp duty also works in a buyer’s favour since it authenticates the purchase and can serve as evidence of the transaction in case of a dispute. The stamp duty charges vary depending on the state and are usually levied at 4-7% of the property’s value. Some states also offer concessions and rebates to make housing affordable and encourage real estate investment.

Registration Fee:

Along with the stamp duty, you also must pay a registration fee when you purchase property. Again, the registration fee is a mandatory tax levied by the government imposed as a charge for updating the records and changing the property ownership in the new buyer’s name. In most states, a registration fee is levied at the cost of 1% of the value of a property. Do note that the registration fee is separate from the stamp duty charges.

Goods and Services Tax (GST):

If you are planning on purchasing an under-construction property, you will also have to pay GST on it. If the property you plan on purchasing counts as affordable housing, the GST due will be calculated at the rate of 1% of the value of the house. Affordable housing is defined as property valued less than Rs 45 lakh and comprising less than 60 square metres in metropolitan cities and 90 square metres in other areas. If the property does not count as affordable housing, the GST due will be charged at 5% of the value. However, if you invest in a ready-to-own or resale property, you do not have to pay any GST. You can also avail of home loan tax benefits to save on costs.

Advance Maintenance Charges:

While buying a house, you also have to contribute towards the maintenance of the overall property. Often, real estate and construction companies collect property maintenance charges in advance to help pay for security, operational lifts, common water and electric supply, and other amenities. Depending on the size and location of the property, advance maintenance charges can be a substantial cost you need to factor into your financial planning.

Parking Charges:

Many buyers do not know that they have to pay parking charges even after they move into their new home. Housing societies and residential complexes often charge for a dedicated parking space. While often the cost of a single parking space is included in the buying price, you may have to shell out extra if you have more than one vehicle. Depending on the society, you must pay one-time or annual parking charges.

At the end of the day, all these costs can add up and increase the amount you will have to pay to purchase property. If you are applying for a home loan, a lender will most likely not factor in such costs, and they will come out of your own pocket. Having an idea of such hidden charges can help you plan better and save up for a property within your budget. If you are looking for a home featuring modern construction quality and interiors crafted by the top designers in India, look no further than Lodha. At Lodha, one of the top real estate builders in India, we create a wide variety of residential spaces, from the opulent to the affordable.

Choose Lodha and invest in more than a home-invest in a beautiful life.