While buying a property, be it a residential, commercial, or space sold in one of the commercial-cum-residential projects which offer a combination of both, many buyers overlook some taxes and hidden charges which should not be ignored. These play a vital role in deciding the final cost of the property, and knowing all the costs in advance helps manage the budget better. Here are 4 important hidden charges and taxes that should be considered when buying a property:
1. Service Tax and GST
Any under-construction property bought in India requires the buyer to pay the Service Tax and GST. This is especially considered when a buyer is buying a brand new property. These taxes are levied on the base cost of the property.
2. Stamp Duty
These are charges that are to be paid to the government. Stamp duty is paid to the state government to register the house in the new owner’s name. The stamp duty charges differ from state to state and are generally between 5-7% of the base cost of the property.
3. Registration Fee
Registration is the full and final agreement signed by the builder and the buyer and concludes that the ownership has been transferred from the builder to the buyer. The Court charges a minimal of 1-2% as the registration fee, after which the property is legally yours.
4. Maintenance Fee
When buying a property, especially a house in a residential society built by the developer, buyers often forget that they are not just paying for the house. A monthly fee is charged for the maintenance and provision of amenities provided by the builder which often includes parking space, elevators, club membership, security etc. Since these are not charges that involved in the base cost, buyers tend to overlook them. However, they should know in advance how much will be the maintenance charges each month.
Other hidden charges include brokerage fees as well. Although these are important too, the above-mentioned charges are crucial and should be considered within the budget.