Buying a home can often seem like a complicated and laborious financial dealing, only because it entails more than just the cost of the property in question. As a homebuyer, you are likely to incur many charges while purchasing a property that you may not always remember to account for. Being aware of these ‘hidden costs’ can help you plan your purchase and your budget in a more effective manner.
Here are 7 hidden costs homebuyers should watch out for:
1. Stamp duty & registration fee: It is mandatory for homebuyers to have the sale deed legally registered, and this process entails two charges—stamp duty and registration fee. These two charges together amount to approximately 5-10 per cent of the cost of the property.
2. Property tax: Property tax is applicable on the purchase and ownership of any kind of property—residential or commercial—in India, and the taxation slab varies from state to state. Remember to account for this in your purchase budget.
3. Home insurance: As a homebuyer, one of the most important things that you can invest in—alongside your home—is a good home insurance policy. Take your time to select a policy that best safeguards your home and your interests as a homebuyer.
4. Interest rate: When repaying your home loan, make sure to account for the interest rate that will be applicable. In case you have opted for a floating rate of interest, this amount will reflect marginal fluctuations with every EMI.
5. Repairs and upkeep: Whether it is the maintenance fee charged by the residential society, or the variable costs incurred by you for regular repairs and upkeep, these expenditures are almost unavoidable.
6. Parking charges: Some residential societies may charge you a one-time fee for allocating covered car parking space to your vehicle.
7. Furnishings: As a first-time homebuyer, you may forget to account for the expenses that will go towards doing up your home. Of course, how much you spend on décor and furnishings is fairly flexible and can be tailored to your budget.