Jun 13, 2023Home Ally

Unveiling Hidden Costs Of Homebuying In India: What To Watch Out For

by Godrej Properties Limited

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Hidden Costs Of Homebuying

When buying a home in India, it’s important to consider not just the upfront cost of the property but also the hidden costs associated with the purchase. These additional expenses can significantly impact your budget, so it’s essential to be aware of them. 

Hidden Costs Of Homebuying In India That You Should Watch Out For

1. Registration And Stamp Duty

Stamp duty is a government tax on property sale or transfer in India, varying by state. It’s calculated as a percentage of market value or agreement value. Registration fees are also applicable.

2. Brokerage Fees

Real estate agents or brokers in India charge a commission fee, typically a percentage of the property’s value, for assisting with property search and purchase. Negotiate and understand the fee structure before engaging their services.

3. Legal And Documentation Charges

Hiring a lawyer for property purchases in India is common. They charge fees for services like title search, document preparation, and registration oversight, which can vary based on experience and transaction complexity.

4. Maintenance And Society Charges

When buying a property in a housing society or gated community in India, there may be mandatory maintenance charges or society fees for common area upkeep and shared facilities. Inquire about these charges beforehand, as they can vary.

5. Property Insurance

While not mandatory, it is recommended to get property insurance to protect your investment against unforeseen events such as fire, natural disasters, or theft. The cost of insurance will depend on the value of the property and the coverage you choose.

6. Utilities And Connection Charges

When moving into a new home, you may need to pay for utilities such as water and electricity connection charges. These charges vary depending on the locality and the size of the property. Ensure to inquire about these fees to avoid any surprises.

7. Interior Furnishing And Renovations

If you plan to furnish the property or carry out any renovations, you should account for these expenses. The cost of interior furnishings, modular kitchens, and other fixtures can add up quickly.

In Conclusion 

It's crucial to include these hidden costs when budgeting for your home purchase in India. Being aware of these expenses will help you plan your finances better and avoid any financial surprises along the way. Consulting with a professional such as a financial advisor or a real estate lawyer can provide further guidance tailored to your specific circumstances.


 

Frequently asked questions

1. Are the hidden costs of homebuying the same across all states in India?

Ans. Hidden costs of homebuying in India vary by state. Regulations and taxes like stamp duty and registration fees impact overall property purchase costs. Research state-specific costs before buying.

2. Are there any exemptions or concessions available on stamp duty or registration charges?

Ans. Some Indian states offer exemptions or concessions on stamp duty and registration charges for specific categories like women buyers, first-time homebuyers, or affordable housing. Verify eligibility with local authorities or a property lawyer.

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