Property buying is a big decision. When you plan to buy a residential or commercial property, you have to consider several cost affecting factors and then decide. Without learning all the major areas of real estate rules and policies, one must not invest in a property. And one such thing is to know about the hidden costs. Before you sign a legal statement regarding buying a property, make sure you get the details of all the extra and hidden charges you must pay.
Here is the list of most important hidden costs you should know.
Cost Involving Registration and Stamp Duty
Always keep this in mind that you need to spend for the registration of your property. This is a very important part that will affect your overall budget for the property. So, ask the property seller regarding the registration charges and stamp-duty as it has to be paid to the government so that the property gets into your name lawfully. At present in Gujarat, the registration charge is 1% & stamp duty is 4.9% of the total cost of the property, however these rates change from state to state.
Tax to the Government
According to the revised GST policy, which doesn’t affect the existing GST rule on commercial properties, GST for the affordable housing properties has been slashed to 1% and for the rest of the housing properties GST has been slashed to 5%. These new rates have been in effect from the 1st of April, 2019. This is a really good news for the property buyers as you have to pay minimum GST to the government. But one has to remember that tax has to be paid depending on the current government policy.
When you are buying a property you need to pay certain amount of money as the maintenance deposit to the developer. This includes maintenance involving the lighting, water supply, electricity and common amenities. This is a necessary cost that you need to pay for the property care.
Cost of Parking
For your vehicles, you need to have space where you can park them under surveillance. And for that you will have to pay extra every month. This is not included in your property amount. The money you need to pay for the parking lot depends on how big your space is. Also, if you buy a property in a posh locality, the parking cost will be a little higher.
Other Cost Affecting Factors
Carpet area, which is a gross usable area, of a property is the key factor which the cost of a property is decided upon. Often buyers oversee the carpet area of a property because of number of rooms being offered. However, at the end, the carpet area should matter more, since it ultimately tells you how big of a property you are purchasing.
Property prices majorly depend on the location in which the project is developed. Well-developed areas tend to have a higher cost for properties in comparison to the areas that are not so well developed. That is partly because well-developed areas have better access to shops, restaurants, schools, hospitals and other outside amenities.
Last but not the least, the quality of project also dictates the property prices. Projects using better architecture, better quality of raw materials for construction and interiors and offering better amenities than the market standards tend to have a slightly higher price.
With everything being said, it is best to ask about your doubts directly to your property developer, as pricing practices differ from one developer to another.
Hope these tips help you to set the right budget before you decide to buy a property.