Additional costs incurred while purchasing a property

Q: Hey, I plan to invest in the near future in Hyderabad. This would be first ever investment in a property. I have seen a couple of places and I’m trying to set a budget for my investment. Can someone please elaborate on the additional fees and charges I might incur when I buy a house. As far as I think I just know of the property’s cost itself and maybe corpus fund. I have no idea about what other costs goes into buying a property.

Ramesh Gullapalli, Hyderabad

25th June 2014

Legal in Hyderabad

buying property charges

buying property hidden charges

investment hidden costs

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To cite a few more costs in addition to what is already mentioned, you will have to pay maintenance charges in lump sum before you buy a property. These are mainly for the additional amenities like gym, pool, clubhouse etc. And let’s not forget the cost that come while availing the loan services for a property, on the top of my head I can think of a processing fee that is charged around 0.5% to 1%. These might vary, I’m not so sure about the percentage. I’m sure there are more charges involved. I just can’t think of any more right now. If anyone can think of more, feel free to add to this.

Kamala Reddy, Hyderabad

25th June 2014

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Hi there! I was just like you a couple of years back. I used to think that the price quoted by the builder is the only expense. But, as I learnt more and more about investments, lot of obvious and few hidden costs came up. The most basic ones that follow the purchase price of the property are stamp duty and registration fee. These are mandatory, you cannot evade them.Stamp duty here is 5% unless the new state of Telangana decides to change it. If you go for an under-construction property, you might have to pay VAT as well at 3% of the property price, you will have to borne a service tax of around 3.7%. I’m not so sure about the service tax though, someone please confirm the percentage, please?

Krishna Rao, Hyderabad

25th June 2014

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There are few more charges than these which are subjective to your purchase. If you are going through broker, then you will incur brokerage charges, ideally varies 1 to 4% of property prices. If you are investing a huge sum, title of transfers might include some lawyer conveyance costs. You will also have to pay an yearly property tax, this is something a lot of buyers do not pay attention to. But, if it’s me, I’d consider this a part and parcel of the cots of my home.

Govind Naidu, Hyderabad

25th June 2014

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