6 hidden costs of buying a home in India that buyers should be aware of before investing in a property

Purchasing a home is often considered an “once-in-a-lifetime” dream, but the price tag of the home is not the only thing that matters. Many homebuyers are often focused on the down payment and the loan amount while overlooking several other costs that come up before, during, and after the purchase of the home. These hidden costs can be quite detrimental to your budget if you do not plan for them in advance. It is essential to understand these costs early on to make a well-informed, stress-free investment.

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Stamp duty and registration charges are government fees that need to be paid during the registration of the property. These fees can vary from 5% to 8% of the property’s value, depending on the state and are a significant expense. Since banks do not provide financing for these charges, homebuyers need to pay them from their own pockets. Overlooking this cost often results in last-minute financial stress during the final stages of the home-buying process.

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In many housing societies and projects, a maintenance deposit is also charged at the time of possession. This amount is utilsed for future maintenance and repair work of the property. Moreover, the monthly maintenance charges can also be substantial, particularly in the case of gated communities with various amenities.

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Though home loans simplify the buying process, they also involve certain extra expenses like home loan processing charges, legal verification charges and technical valuation charges. Though these charges appear to be nominal, they can collectively result in a substantial amount.

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A new property is hardly ready for occupation without further expenditure on interior work. Costs like wardrobes, modular kitchens, lighting fixtures, curtains and furniture are usually not included in the purchase price. Even minimal customisation can run into several lakhs of rupees, especially in bigger properties. Such costs are usually incurred at the time of purchase and are not included in most home loans.

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Once you have purchased a property, property tax is an expense that has to be incurred on a yearly basis. This tax has to be paid to the respective local authority. The amount of tax depends on the location, size, and type of property. Alongside this, home insurance, although not mandatory, is a very good precautionary step against possible risks such as fire, natural disasters or burglary.

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When you are moving to a new house, there are some expenses that you will have to incur, such as packers and movers, internet and gas connections and even some small repairs or painting. These expenses, although small, can be a burden on your budget if you do not plan for them in advance.

Purchasing a home is not just about paying for it and the EMIs. There are some hidden costs such as taxes, fees, interiors, and maintenance that can quietly increase your expenses. By being aware of these costs and planning for them in advance, you can have a stress-free experience of enjoying your new home. A knowledgeable buyer is always better equipped to turn a house into a home.

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