The Hidden Price of Homeownership - Check 5 Crucial Costs Before Buying

Buying a home is a significant milestone, but the advertised price is just the tip of the iceberg. There are several hidden costs that can catch buyers off guard.

Here’s a breakdown of essential expenses to consider before making your purchase:

1. Stamp Duty and Registration Fees

Stamp duty, a government-imposed tax, typically ranges between 5-8% of the property value and varies by state. For instance, in Maharashtra, it stands at 6-7%. Buyers often forget to account for this cost, which can strain budgets if unplanned. Include it early in your calculations. Additionally, registration fees—about 1% of the property’s market value—are required to legally register the property in your name.

2. GST on Under-Construction Properties

GST (Goods and Services Tax) applies to under-construction properties at 5% for most residential units and 1% for affordable housing. Ready-to-move-in properties are exempt from GST, making it a cost-effective option for some buyers. Consult professionals to verify the construction stage and clarify GST applicability to avoid financial surprises.

3. Utility Connection Charges

Setting up electricity, water, and gas connections often incurs separate fees. Developers may not always include these charges in the sale agreement. Ensure these costs are reviewed and clarified in the agreement to avoid unexpected out-of-pocket expenses later.

4. Parking and Club Membership Fees

Parking spots are usually sold separately, with costs varying by location and property type, often running into lakhs. Access to amenities like gyms, pools, or clubs may require a one-time membership fee. Always confirm with the developer whether these are included or additional.

5. Miscellaneous Costs

Some agreements may exclude charges for maintenance deposits, legal documentation, or premium location fees. Read the fine print carefully and seek clarity to ensure your budget reflects the full picture.

Plan Smart, Invest Wisely

Hidden costs can significantly increase the overall price of your dream home.

To avoid surprises: Budget comprehensively for all potential expenses.

Seek guidance from property and financial experts.

Verify all inclusions in the sale agreement before signing.

By staying informed and prepared, you can turn your dream home into a sound and satisfying investment.