You don’t just pay the property’s value when buying a house. Several other costs contribute to the purchase price of your home. It would help if you accounted for these additional expenses in your budget. This is particularly true for those on a tight budget with a home loan with an equated monthly instalment (EMI). If you are searching for a house for sale in Gurgaon, you must know the different taxes and additional charges you will need to pay before finalising a home.
GST – Goods And Service Tax
The Goods and Service Tax is one of the major costs that you cannot avoid if you buy a property that is still being built (GST). Affordable houses in metro cities have a carpet area of up to 60 square metres and a value of up to Rs 45 lakhs, unlike non-metro houses, which cover 90 square metres and have a value up to Rs 45 lakhs.
So keep in mind that if you’re buying a house that’s still under construction, you’ll have to pay GST. No Goods and Services Tax is charged once the residential complex is completed and the developer has obtained an Occupancy Certificate (OPC). “There is no GST on the sale of a completed property because it is neither a good nor a service,” Jalan explains.
The government not only charges GST to home buyers; you must also pay stamp duty and registration fees to have the property documents registered in your name. Depending on the state, stamp duty and registration fees can amount to up to 8% of the purchase price. For a Rs 50 lakh residential property, it could cost as much as Rs 4 lakh. On the other hand, some state governments offer discounts or concessions if the property is registered in a woman’s name. In Delhi, for example, the stamp duty is 4% if the property is registered in the name of a woman and 6% if the property is registered in the name of a man. If the property is registered jointly, the stamp duty in Delhi is set at 5%. The state government also charges a registration fee. In Delhi, it is 1% of the property’s cost.
A buyer should calculate the exact amount of stamp duty and registration fees and budget accordingly.
You may have to pay transfer fees if you buy an apartment in a housing society. During the construction stage of development, the developer is usually the one to levy transfer fees. It usually costs between Rs 100 and Rs 250 per square foot. Even if you have a completed property, you may be required to pay transfer fees to the society, particularly if you live in a cooperative group housing society (CGHS). Furthermore, if you purchase a completed property in the resale market in some cities, such as Noida in the National Capital Region (NCR), you may be required to pay transfer fees. These allegations are forwarded to government officials.
Be prepared to pay a commission if you buy a residential property with the help of a real estate agent, especially in the resale market. Property agents typically charge 1 to 2% of the property’s cost for their services. It is, however, frequently negotiable. Agents do not charge home buyers when purchasing a property from a developer in the primary market because sellers (developers) pay a higher commission than in the resale market.
If you purchase a house, you must conduct thorough due diligence on the property documents. The cost of legal services varies depending on several factors. According to Gupta, the cost is determined by the lawyers’ due diligence scope, the nature and size of the property, and the number of intervening transfers. It also depends on the location of the property documents; sometimes, it is easier to locate property documents in municipal towns and metropolitan areas, but other times it takes longer.
Compared to an individual practitioner, the larger or more prestigious the law firm, the higher the fees. Legal experts may also be required for registration work at the sub-office. According to a conservative estimate, the registrar’s Legal assistance could easily cost Rs 25,000 or more.