Hidden cost of buying a Home, Flat or Apartment
There are several charges that go into making the total cost of an apartment. From parking space charges to club membership costs, here is more. We have compiled a list of the general hidden cost of buying a home, flat or apartment.
One must be aware that there are several hidden cost of buying a home over and above the advertised price of the property. While the hidden costs may vary from one society to the other, inevitably every property will have several cost factors. In some cases, these costs may even make up more than 20 percent of the advertised cost. Here is a list of the different over and above charges one needs to pay in order to own an apartment:
Basic Sale Price (BSP): This is normally the advertised price by the developer. The base sale price of a property is calculated taking into account the size of the apartment and the rate of real estate per square feet in the area. For example, if the size of the apartment is 1,500 sq ft and the real estate price in the area is Rs 5,000 per sq ft, then the BSP of the property will be 5,000 X 1,500 or Rs 75 lakh.
Preferential Location Charge (PLC): This cost is paid depending upon the location of the apartment in the building. For example, if you need to own a flat in the first few floors of a high-rise building, you may be asked to pay the preferential location charge by the developer. This is normally calculated as four percent of the BSP. But there is no hard and fast rule, and it may differ from one floor to the other.
Stamp Duty and Registration Charges: This varies from one state to the other. It is again a subjective charge that can also vary depending upon which municipality you wish to own the property in. It also depends on factors such as gender and disability status. It is calculated as a percentage on the registered value of the property. For example, the stamp duty charges in Delhi are five percent and three percent for males and females respectively. The additional registration charges are one percent for both the genders.
Development and Infrastructure Charges: These costs are paid by the developer to the government but they may finally be incurred from the buyer of the apartment. These charges could be levied on any kind of development or infrastructure construction done by a developer outside the society complex. This could include developing a park, installing street lighting, etc. The value of these charges is subjective and may entirely depend on the expenditure over the development or the new infrastructure.
Goods & Service Tax (GST): The service tax is charged only on the cost of construction. It is 5 percent of the cost of construction.
Club Membership: While one may have to pay a monthly amount in the name of club membership, irrespective of whether one uses the services or not, many developers also charge a one-time hefty amount for this facility. This again is not dependent on whether you wish to use the club or not.
Parking Charges: One may be charged parking charges dependent on the number of vehicles one has. In other cases, it may be a flat amount, charged equally from all apartment owners, not concerning the number of vehicles you own.
Water, Electricity and Fire Facility Charges: While you may be charged a monthly maintenance amount for these facilities, several developers also incur you a one-time fee for work done related to water supply, electricity, and fire facility in your apartment.
