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Additional costs involved in buying a house
Additional costs involved in buying a house
Following are some additional costs associated with owning a home that one must include while calculating the house's total cost.

The decision of purchasing a new house is important in the sense that it may have life-long implications. Naturally, such a decision involves a very detailed financial planning. However, more often than not, people base their planning on the cost of the property, as it appears on paper. In reality, there are some additional costs apart from the cost on paper that must be taken into account while calculating the estimate.

Maintenance deposit

Often, developers put forward the condition of paying a maintenance deposit in advance. This deposit is for a fixed period of time, which can be one year or ten years. The maintenance deposit may vary for properties at different locations.

Most home-buyers are hesitant in paying this amount, but developers insist on this deposit as it offers an influx of funds.

Location charges

Most hotels charge extra for a room with a better view than the rest, maybe that of the sea or the hills. The same principle applies to home-buying also. In most projects, buyers have to often pay an extra charge for buying a house at a preferred location. One can choose to buy an apartment facing the main road, or an apartment facing the hills, or in Mumbai, an apartment facing the sea. The extra charge that he consequently pays is called the Preferential Location Charge (PLC). This may increase the property price by 5 - 10%.

Floor rise

Floor rise charges arise from a concept similar to that of PLC. In most projects, the prices of apartments on lower floors are less than the prices of apartments on higher floors. In such cases, home buyers have to pay a floor rise charge. However, some developers may provide waivers on this floor rise as part of various schemes.

Registration and Stamp Duty charges

Often, buyers calculate the cost of the property without including stamp duty charges. But, stamp duty (or the cost of stamp paper) amounts to 7 - 8% of the property value, and so, makes a calculable difference to the total cost of the house. Buyers must also include the registration fee of the house, which amounts to around 1 - 2% of the price. Added to this is the fee of lawyer or notary for all required paperwork.

Therefore, buyers must expect a 10% extra cost for registering the property.

Parking space

When buying a house, people often mistakenly assume that the house will come with a parking spot. But, this is not the case. Depending on the type of property, its location, its area size, developers will charge a small percentage of the property's total cost for providing a parking spot.

Interior decoration costs

While preparing an expected estimate of a new house, one should not forget to add the costs of decorating the interiors of the house. While there is no fixed cost that can be allocated for this purpose, one must still keep reserved a significant amount of money for essential things like new furniture, installation of gadgets, additional design work or fixtures etc.

Miscellaneous charges

One can undertake a more accurate financial planning if he also adds the miscellaneous charges involved in the purchase of a house. These charges include the charges one would pay to the movers and packers. If one is making the purchase through a broker, then he/she will also be liable to pay some percentage (negotiable) of the property value as commission.

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