What are Maintenance Charges?

Buying a New Home doesn't mean it is the end of your spending. Nurturing and sustaining the investment for an uninterrupted convenient & cheerful lifestyle calls for maintenance charges. Owners or Tenants of a flat(s) finance the upkeep of the building or the gated community, either monthly or annually. It ensures that the vertical establishments and their facilities sustain longer. Maintenance costs are assumed to be cheaper for houses that are affordable, and higher for houses, that are moderately affordable to expensive.

Realtors and Societies in India typically charge between Rs. 2 to Rs. 25 per sq. ft. or more monthly. It means if you're looking for affordable housing, it is as low as Rs. 2. And under various schemes in India for certain income and age groups, one can achieve the dream of staying in a quality affordable home. Let us understand in brief about Maintenance Charges.

What are the factors for calculating Maintenance Charges in India?

Maintenance Charges are directly proportional to the number of facilities, their quality, and the carpet sizes available in a residential society. An affordable housing project with few to no facilities charge Rs. 2 per sq. ft., whereas a luxurious housing project with many facilities can charge as much as Rs. 25 per sq. ft. or more.

After receiving the project from the realtor, the Residents Welfare Association (RWA) mutually decide among themselves and modifies the Maintenance Schedule that suits their everyday living supported by the facilities.

Below is a generalized format for calculating the maintenance charges by the Royal Institution of Chartered Surveyors, South Asia.

What are the Calculation Methods of Maintenance Charges followed by realtors and societies in India?

• Per Square Feet Method

This method simply involves calculating the amount of carpet area (in sq. ft.) held by an owner/tenant while the maintenance rate per sq. ft. is constant. It is because a project may have varying carpet areas and configurations.

For instance, if an owner has a flat with a carpet area of 500 sq. ft., and the rate is Rs. 5 per sq. ft., then the owner must pay Rs. 2500 monthly.

• Equal Maintenance Charge Method

If a stand-alone residential building or a gated community has the same configuration and almost the same carpet area, then every owner/tenant has to pay the same maintenance charges.

• Hybrid Fee

As the name implies, this is a hybrid of the methods above. The per square feet method is used for the apartments' maintenance based on their respective sizes, and the equal maintenance charge method is used for all the facilities of that residential project. This is a reasonable and unbiased method of calculating the maintenance charges.

Is GST applicable on Maintenance Charges?

An 18% GST is levied on maintenance charges exceeding Rs. 7500 (monthly) per flat or an annual turnover of the entire society through the supply of goods and services is Rs. 20 Lakhs. Assuming that affordable housing projects that offer minimum facilities and small-sized homes, their maintenance charges are exempted from GST.