What Expenses to Expect When Purchasing your Home ?
Purchasing a house is usually one of the greatest decisions of one’s lifetime. Here is Property Purchase Guide for Expenses to Expect When Purchasing your Home. Usually, it can’t be completed without considering detailed financial planning. The foremost step in purchasing a house involves understanding and determining the actual cost of the house’s ownership. In addition to the house’s actual costs, there would be additional expenses and hidden charges that you will end up paying for. If you ignore making provisions for these costs, the actual costs will inflate at the time of purchase. Consequently, it can disrupt your financial planning. If you are planning to buy one of your dream properties in Gurugram, then you can consider the expenses discussed below.
1. Stamp Duty
Stamp Duty refers to a mandatory tax imposed by the government on property transactions. It validates the sale agreement and works as evidence of a purchase or sale of a property. Keep in mind that the stamp duty charges can fall in the range of 4%-7% of the property value based on the state where you are purchasing a house.
2. Registration Fee
In the majority of states, the registration fee is 1% of the value of a house. For example, if your luxury property is valued at INR 40 lac, you would have to pay INR 40,000 as a registration fee.
3. Goods and Services Tax (GST)
You are liable to pay GST if you are buying an under-construction property. The GST rate is 1% of the value of the house if that property is included within the specification of affordable housing. Otherwise, the GST rate is 5% of the property value.
4. Advance Maintenance Charges
Property maintenance charges can considerably affect the total cost of the house. Usually, the maintenance charges include fees for the house’s maintenance, lift charges, security charges, and electric and water charges.
5. Interior costs:
After purchasing a house, you will have to spend a certain amount on interiors as per your requirements and preferences. This expense can cost a fortune based on the type of interior being chosen. It is assumed that the average interior costs can be at least 1%-2% of the overall cost of the house.
6. Preferential location charge:
Preferential Location Charge refers to the additional cost that you would pay for selecting a better site in an apartment complex. Its fee depends on the project type, city’s location, climatic conditions, floor number, etc. Moreover, if you are planning to buy a builder floor in Gurgaon or any other house property, the preferential location charge depends on the location, alignment, size, and construction quality. It is charged on a per-square-foot basis.
7. External Development Charges (EDC):
External development charge(EDC) is charged by the house’s developers. It involves maintenance of roads, street lights, sewerage, and water and electricity supply. You must not neglect EDC because it accounts for up to 10% of the base cost.
Conclusion:
Keep in mind that the mortgage payment represents only a fraction of the costs you ought to pay as a new homeowner. You must acquaint yourself with all potential related expenses, and overall budget carefully before purchasing a house.