Hidden Real Estate Charges You Should Know Before Buying a Property 

Planning to buy a residential property in Gurgaon? Are you aware about the charges involved in purchase of the property? No! Then you should get your calculation right. It is because, when you look for a property, the marketer or developer only showcases the price of the unit, not the charges that come along with it. These charges add up to the original price of the unit and if you are not aware about them, you might end up in a financial emergency, or worse leave the opportunity altogether and wait. 

In this blog, we will tell you about 13 hidden real estate charges  in Gurgaon, so that you know what you have to actually pay towards your new house. 

13 Real Estate Hidden Charges For Buyer

1. GST (Goods and Services Tax)

The GST rates on real estate purchases vary depending on the type of property being bought. Here’s how they break down:

• Affordable housing projects valued up to Rs. 45 lakhs – 1%
  
• Residential properties – 5%
  
• Commercial properties – 12%
  

For example, if you’re purchasing a Rs.40 lakh affordable housing property, you’ll need to pay Rs.40,000 as GST, adding a notable cost to the initial property price. For a Rs.1 crore commercial property, the GST will amount to Rs.12 lakh, which is a significant additional cost.

2. TDS (Tax Deducted at Source)

If the value of the property exceeds Rs.50 lakh, buyers are required to deduct 1% TDS from the total property value and deposit it with the Income Tax Department. While this tax is technically deducted from the seller’s proceeds, it indirectly impacts the buyer since the seller might raise the sale price to recover the cost of the TDS deduction.

For example, on a Rs.60 lakh property, the TDS will be Rs.60,000, which may be added to the final sale price, increasing the buyer’s costs. 

3. Registration and Stamp Duty

When buying property in Gurgaon, you’ll need to pay stamp duty and registration fees:

• 6% stamp duty for men.
  
• 4% stamp duty for women.
  
• 5% for joint ownership.
  
• 1% registration fee.
  

The combined cost of stamp duty and registration can total 7-8% of the property value. For a Rs.50 lakh property, expect to pay around Rs.3.5 – 4 lakh in registration and stamp duty charges.

For example, if you are purchasing a Rs.1 crore property, the total stamp duty and registration fees would amount to Rs.7 lakh – Rs.8 lakh. Keep in mind that while women enjoy a reduced stamp duty rate, the charges can still be significant. 

4. External Development Charges (EDC) and Internal Development Charges (IDC)

When buying property in Gurgaon, you’ll also incur EDC and IDC.

• EDC covers the cost of developing infrastructure outside the project area, such as roads, street lighting, and drainage.
  
• IDC covers the cost of developing internal infrastructure within the project, like water supply and landscaping.
  

Both of these are typically charged per square foot or square meter and are added to the overall cost of the property. These costs are often not included in the basic sale price, but can add substantial amounts. For instance, in a large residential project, EDC and IDC charges can range from Rs.50 to Rs.200 per square foot or higher, which can add up to Rs.2 lakh – Rs.5 lakh or more to the total cost of a property.

5. Preferential Location Charges (PLC)

If you’re eyeing a property located in a premium area of the project, like a corner unit, pool-facing, or park-facing property, be prepared to pay additional PLC. The charge varies depending on the builder and location but can add a significant premium.

For example, PLC charges for a park-facing unit could range from Rs.1 lakh to Rs.5 lakh or higher depending on the location and builder’s pricing structure.

6. Car Parking Costs (CPC)

Car parking spaces are usually not included in the basic property cost. Most builders charge separately for parking spaces, which can range from Rs.1 lakh to Rs.5 lakh or more per parking spot in Gurgaon. This is a common hidden cost that many buyers overlook until it’s time to finalize the deal.

7. Interior and Furnishing Costs

Another hidden cost is interior furnishing. Many properties in Gurgaon are sold as bare-shell units, meaning you’ll have to budget for interior work such as flooring, painting, plumbing, and electrical fittings. These costs can vary greatly based on your personal preferences but can add Rs.5 lakh to Rs.10 lakh or more for a small 2-BHK apartment, especially if you opt for high-end finishes.

8. Maintenance Charges

Once you’ve bought the property, you’ll also have to account for maintenance charges. There are three types of maintenance-related costs:

• IFMS (Interest-Free Maintenance Security): This is a refundable deposit collected at the time of purchase. It’s meant to cover the property’s maintenance until the Resident Welfare Association (RWA) takes over.
  
• Maintenance Deposit: Similar to IFMS but may be used directly for maintenance and may not always be refundable.
  
• Advance Maintenance Charges: Paid periodically for regular upkeep of the property.
  

For a 2-BHK apartment in Gurgaon, maintenance charges can vary from Rs.2,000 to Rs.10,000 per month or more, depending on the amenities and the overall size of the property. Keep in mind that these charges can increase over time, especially with luxury developments that offer more amenities.

9. Brokerage Charges

Brokers or real estate agents typically charge brokerage fees on the property value. For a Rs.50 lakh property, this can translate into a few lakhs in brokerage fees. While some agents may be willing to negotiate this fee, it’s something to keep in mind, especially for high-value properties. 

10. Home Loan Processing Fees

If you’re taking a home loan to finance your property purchase, be prepared for additional costs like loan processing fees, which typically range from 0.5% to 3% of the loan amount, depending on the lender’s policies. Additional legal and technical expenses may also arise, adding to your overall investment. Do compare offers provided by lenders before taking a home loan. 

11. Property Inspection Charges

A professional property inspection is a critical step in ensuring that the property is in good condition. While this step is necessary to avoid future repair costs, property inspectors usually charge around Rs.5,000 to Rs.15,000 or more, depending on the size of the property.

12. Legal and Due Diligence Fees

Before finalizing your property purchase, you must conduct legal verification to ensure that the property title is clear and free of any encumbrances. Legal consultants charge a fee for due diligence. You may have to pay a hefty fee, depending on the complexity of the property documents.

13. Utilities and Amenities Charges

At the time of possession, you’ll need to pay for utilities like, water, gas, and internet. Moreover, certain amenities such as power backup, gym, swimming pool, and clubhouses come with their own set of charges, adding to your monthly maintenance costs.

For instance, if you opt for power backup, it could cost Rs.2,000 to Rs.3,000 per month, while premium amenities like a clubhouse or gym may increase your maintenance charges by Rs.5,000 – Rs. 10,000 per month.

These are some of the hidden charges in real estate. However, before you book a property in Gurgaon or any other city, do consult with your property advisor and ask about all the involved charges. So that there are no unwanted surprises for you in the middle of the transaction. 

If you don’t want to go through the hassle of doing all the paperwork on your own, just visit Inframantra or connect with an Inframantra property advisor. Inframantra is one of the top real estate consultancy firms in Gurgaon that offers premium home-buyers services that too without any brokerage. You get guided site visits and enjoy hassle-free documentation, avail best loan options, and experience hassle-free transition into your new home. Explore the best properties in the prime locations of the city with Inframantra.  

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