Don’t ignore these 5 hidden costs when buying a house

Buying a new home is a significant decision for most Indian families. It gives a sense of security and freedom, especially from the fact that you don’t have to rent anymore which seems to increase each year. You must note that there are various hidden costs involved in the property buying process. 

Consider a scenario where you see an advertisement for a newly built property for INR 3500 per square feet, where the total area of the property is 1250 square feet. It immediately grabs your attention because this is the most pocket-friendly option you have seen in a while. This amount is not the total property price as the ones who gave that advertisement have a goal to lure in potential customers. You must know the additional hidden costs that you have to pay to buy a house. 

Hidden costs included in property buying process

Real estate developers throw in extra charges when their customers least expect it. Therefore, you must be aware of these charges beforehand to avoid getting shocked later.

Infrastructure Cost

Infrastructural costs are significantly hidden from the customers and are only told while signing papers. These hidden costs can vary from INR 50 to 70 per square foot. However, you must confirm it beforehand with your real estate developer to avoid paying higher charges. They are referred to as IDC/EDC/Rent lease.

Administration and Club Membership

Property buying in a gated society accrues administration and club membership charges. They may vary anywhere between INR 1 to 3 lakhs or even more if it is a premium location society. Your real estate developer might keep these hidden costs for the last moment when you won’t be able to refuse to pay. 

Preferential Location Charge (PLC)

One of the significant hidden costs during property buying is preferential location charges. This is the charge you must pay for your preferred location like corner house, park facing, extra garden space etc. While this is not typically included in hidden costs of the property buying process, you must be aware that it can significantly raise the overall cost.

Parking Space

In 2012, the Supreme Court of India ruled out real estate developers charging extra parking costs that would significantly raise the overall property price. However, if you don’t pay attention to the price calculation and details mentioned by your real estate developer, you might end up paying it in the form of multiple hidden costs. 

Especially if this property buying process is occurring in metro cities, there are chances that you may end up paying for parking space. Even if you are buying flats in Mumbai, remember that their costs already cover the parking space charge and you do not have to pay extra.

Interior Design

Your property buying budget must include an additional real interior design cost as you might have to get some work done or buy furnishing. Apart from buying your preferred type of furniture, some additional costs like plumbing, painting and extra fixtures like lighting you may want to install to enhance the overall look.

Wrapping it up

Property buying is definitely a feat for an average Indian household as not many can achieve it. If you have bought a house anywhere in the city or outside, pat yourself on the back for achieving a milestone. If you are the one considering property buying in the upcoming days or months, look out for these hidden costs. Keep a little extra budget for registration and service tax as well.

When you are going down the brass tracks of property buying, beware of all these hidden costs and plan your savings accordingly. Research beforehand as much as you can to avoid unwanted confusion and surprises later.  

Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. PropertyPistol does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.