Hidden Costs in Property Purchase

Buying a property is one of the most cherished dreams of an individual. We are ready to go that extra mile to realize that dream. It is also the biggest investment as one stretches his financial capabilities. But a sudden expense can make your finances go awry.  The advertised price is usually the Basic Selling Price (BSP) of the property. But the BSP is not the complete price your pay. There are several other charges that together make up the total cost of the property. Charges for facilities and amenities, parking, floor wise charges etc. add up to form the same. There are some legal charges also so you end up paying 20-25% extra .Make sure you have factored in all these extra costs.Hidden Costs in Property PurchaseSome important extra costs buyers incur while purchasing a property are–

Registration Costs– This will be a substantial cost depending on the net worth of your property. In most states the entire legal charges add up to about 7-10% of the property value. Besides this there is a registration fee which has to be paid in court and several other miscellaneous expenses like notary lawyers’ fees .The legal counsel assisting in verification and registration also charge fees. All this has to be taken into account.

Parking Space- The trend is to charge an additional upfront payment for an exclusive parking space in large residential complex. The amount depends on open or closed parking the locality and type of property.

Interiors Cost- You spend money on doing up the interiors .This amount varies but is an additional expense one has to consider.

Loss Of Interest Rental And Tax Rebates – Delays in project completion are very common in India due to a host of reasons. You land up paying extra interest to the lender. If you are living on rent you have to dig your pockets. Tax deductions cannot be claimed till the project is complete.

Maintenance Deposits– Builders may charge upfront maintenance deposits for long periods instead of charging periodically this further pushes your outgoings as your loan amount increases.

Preferred Location Charge (PLC) – This charge is levied for the choice of floor or orientation of the apartment. The amount varies from city to city depending on the amenities and the view the building offers. For example, high rise apartments in Mumbai that offers breathtaking view of the sea charge significant amount as PLC.

Therefore it is advisable to keep 20-25% extra before going for the purchase. Clear knowledge of the add-ons helps you to budget and plan before buying your dream home.

Read More Abut….. Buying a Property? Make Sure if it is Legally Clear