When you decide to buy a home in India, it’s easy to overlook the smaller, hidden fees that come along with the property’s price tag. Expenses such as stamp duty, registration fees, and society maintenance deposits often catch buyers off guard. By getting familiar with these costs, you’ll be better equipped to make informed financial decisions.
Stamp Duty & Registration Fees
Stamp Duty is a mandatory tax you pay to the state government for legally transferring the property into your name. Each state sets its own rate, typically between 5% and 8% of either the market value or the agreement value of the property.
Registration Fees cover the official registration of the sale deed and generally amount to around 1% of the property’s value.
Why These Matter:
- You cannot register your property without paying these fees.
- Even a small percentage can translate into a large sum on high-value properties.
- Some states may offer temporary reductions in stamp duty during specific periods, so stay updated on local regulations.
Suggested Read: Stamp Duty in Top 10 Cities
Brokerage & Agent Commissions
A brokerage fee applies if you enlist a real estate agent to help you find a home. This commission usually falls between 1% and 2% of the property’s total cost, but it can vary based on location and the agent’s services.
How to Manage:
- Negotiate the rate upfront. You have more leverage if you’re buying a high-value property or if you plan to work with the same broker for multiple transactions.
- Ask for a written agreement detailing all services to avoid misunderstandings later.
Suggested Read: Fractional Ownership in Real Estate
Maintenance Deposits & Society Charges
In many housing societies and gated communities, you will pay a maintenance deposit and regular society charges. The deposit serves as a reserve fund for major repairs or future upgrades, while the recurring charges cover day-to-day operational costs such as cleaning common areas, waste disposal, security, and landscaping.
What to Note:
- Builders often collect advance maintenance for up to 1–2 years.
- Different complexes set their fees based on the number of amenities they offer, so compare these charges across multiple projects before deciding.
Suggested Read: Home Loan Negotiation Tips
Parking Space Fees
Builders or societies may treat parking fees as a separate charge from the apartment’s base cost.
- Covered Parking typically costs more than uncovered spots due to added protection from the elements.
- Prime Location Parking (near elevators or entrances) may command a higher rate because of its convenience.
Tip:
- Confirm whether the cost includes one or multiple parking spots.
- If you need extra space for an additional vehicle, clarify the rate for the second spot.
Suggested Read: Parking Allotment Rules in Housing Societies
Preferential Location Charges (PLC)
Developers often add a Preferential Location Charge (PLC) for units with premium views or prime positions, such as higher floors, corner flats, or apartments facing gardens or lakes. The charge varies based on the uniqueness or desirability of the location within the complex.
Considerations:
- PLC can significantly inflate the final property cost.
- Weigh the benefit of a panoramic view or strategic position against the added expense.
Suggested Read: What to do if the builder delays the possession date?
Goods & Services Tax (GST)
GST applies to under-construction properties but does not apply to ready-to-move-in properties that have already received a completion certificate.
- The usual GST rate is 5% (without input tax credit) for non-affordable housing.
- Affordable housing units attract a lower rate of 1% (without input tax credit).
Budgeting for GST:
- Check whether the builder has already included GST in the quoted price.
- Confirm the applicable GST rate based on the property’s status (under-construction vs. ready-to-move-in).
Suggested Read: GST on Flat Purchase
Loan Processing Fees & Interest Rates
When you finance your home, banks and housing finance companies charge various fees, such as:
- Processing Fees for evaluating your loan application.
- Legal & Document Charges for preparing paperwork and verifying property details.
How to Prepare:
- Compare loan offers from multiple banks to find the best interest rate and lowest processing fees.
- Ask for an itemized list of all charges before you finalize your loan.
Suggested Read: How to Reduce Home Loan Processing Fees?
Property Insurance (Optional but Recommended)
Many homebuyers in India overlook property insurance, but it safeguards your investment against fire, theft, or natural calamities. The premium depends on factors like the property’s location, value, and the coverage limit you choose.
Why It’s Worth Considering:
- Protects the structure and contents from unforeseen events.
- Offers peace of mind, especially if you have a mortgage on the property.
Suggested Read: Should You Get a Home Loan Insurance?
Interior Furnishings & Renovations
Interior costs can rise quickly as you customize your new home. You might want built-in wardrobes, modular kitchens, or simply a different coat of paint.
Estimate These Expenses:
- Plan a separate budget for furniture, fixtures, and appliances.
- If you hire an interior designer, clarify the scope of work and costs beforehand.
- Large-scale renovations, such as altering layouts, can increase your expenditure significantly.
Suggested Read: Best Home Renovation Loans
Miscellaneous Charges & Utilities
Utility deposits for water and electricity connections, legal advisor fees, and miscellaneous administrative charges can add a final layer of cost to your home purchase. While these expenses may seem minor on their own, they add up.
Examples of Miscellaneous Costs:
- Meter Installation for electricity or gas.
- Legal Opinion & Title Verification if you hire a separate lawyer.
- Khata/Property Tax Updates in certain states, ensuring official records reflect you as the owner.
How to Prepare for Hidden Costs When Buying a Home?
| Budgeting Step | Action Steps |
|---|---|
| Evaluate Your Finances | – Track your monthly income and expenses – Set aside savings or investments specifically for home-related costs |
| Determine Your Borrowing Capacity | – Research home loans, focusing on interest rates, processing fees, and eligibility criteria – Plan for a down payment of at least 20% of the property’s cost, if possible, to secure better loan terms |
| Account for Hidden Costs | – List every possible fee mentioned in this guide – Consult with experts, such as financial planners or real estate professionals, for precise estimates in your region |
| Negotiate Where Possible | – Discuss fees and add-ons with builders, brokers, and lenders – Request reductions in brokerage or PLC charges if you’re buying a high-value property |
| Plan for Ongoing Expenses | – Be prepared for recurring maintenance, property taxes, and eventual repairs – Adjust your monthly budget to accommodate predictable long-term costs |
Conclusion
Buying a home is a big step. Getting a home loan can be hard, but we make it easy. Choosing Credit Dharma for your home loan simplifies this process. We offer expert advice and personalized assistance to make everything hassle-free. You’ll receive timely updates on your loan application and disbursement progress.
From the initial application to the final disbursement, we provide comprehensive support. Enjoy clear and honest communication at every stage, with no hidden surprises.
Frequently Asked Questions
Stamp duty, registration fees, brokerage, and parking costs are common add-ons.
They can quickly escalate the overall cost of your home purchase.
Renovations and interior work often claim the largest share post-purchase.
Maintenance deposits or society fees also add to ongoing expenses.
Typically, the buyer bears stamp duty to register the property in their name.
Ideally, aim for 20–30% of the property’s value to cover the down payment and other fees.
This helps manage stamp duty, registration, and any unforeseen costs comfortably.
GST applies to under-construction properties, typically at 5% or 1% for affordable housing.
Completed properties with a completion certificate generally fall outside GST’s scope.
Some builders levy a No Objection Certificate fee for transferring rights or ownership.
Buyers must deduct 1% TDS if the property value exceeds ₹50 lakh.
This amount goes to the government under the seller’s PAN.
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