Owning a home or piece of land is a dream come true for many Indians. You may have spent
several years to save up for that dream house and when you do find the right home, there is
nothing to stop you from paying that initial deposit. However before you do this, it is important
to examine the hidden costs of buying a home. While your real estate agent or builder may quote
you an attractive price, you should know that it is not the final amount you will be paying. There
are always hidden costs associated with buying a home and awareness of them can help you
budget your resources in the right way. Here are the top hidden costs for purchasing a new home.
Registration
It is very important to remember that registration costs on a home form a substantial addition to
the final cost. In most states across India, the average registration fees range from 7% to 10% of
the total property cost, which can often end up in several lakhs of rupees. Typically, stamp duty
contributes an additional 5%-7% on the total property value. Even at a minimum estimate about
Rs 50 lakhs, you may have to pay stamp paper duty of about Rs. 3.6 lakhs. Additionally, you are
also required to pay a 1%-2% registration fee to the court. On top of these common registration
expenses, you may also have to set aside funds for lawyers, notaries etc.
Interiors and/or renovation
It is no surprise than any home you buy requires interior work. Whether you are purchasing
a brand new home or an old property, renovations are a must – and they don’t come cheap.
Although this expense is not planned during the purchase, it is an important cost you must factor
in. Ranging from woodwork, painting, lighting fixtures, furniture and other decor elements,
completing the interiors of your home should be an integral part of your plans.
Parking area
The final quote on any home that you decide is rarely inclusive of parking spaces. In most cases,
you are always required to pay extra for parking, especially if you have more than vehicle.
Large residential complexes offer parking spaces at fixed prices ranging from Rs 2 lakhs to Rs 5
lakhs per spot. Depending on the locality, parking facilities, type of property and the area of the
parking space, these values can fluctuate.
Maintenance and other costs
If you are purchasing a home in a branded residential complex, you should not forget about
monthly or yearly maintenance costs. Large apartment complexes today offer world class
amenities along with clean surroundings and regular upkeep of its facilities, so costs are a given.
When you purchase a new home, it is important to get a fair idea of the maintenance costs of the
project and understand how your money is used for its upkeep and maintenance. If your builder
is offering in-house services like laundry, convenience stores, domestic help etc, you should
expect the maintenance to be higher. With these expenses in mind, you can make better use of
your resources and avoid any nasty surprises in the future.
