Buying a property in Bengaluru is a significant financial milestone, especially with the city’s booming real estate market. However, beyond the advertised price per square foot, several hidden costs can catch homebuyers off guard. Whether you’re purchasing an apartment, villa, or a plot, being aware of these additional charges can help you plan better and avoid budget overruns.
Here’s a detailed look at the hidden costs associated with buying property in Bengaluru:
1. Maintenance Deposits
When buying a flat or villa in a gated community, developers often charge a maintenance deposit upfront. This one-time payment, which typically covers one to three years of maintenance costs, is meant to fund the upkeep of common areas and facilities such as lifts, gardens, swimming pools, and security systems.
• Typical range: ₹100 to ₹500 per sq. ft.
• Purpose: Future maintenance of common amenities.
2. Goods and Services Tax (GST)
GST is applicable on under-construction properties, which can add a substantial amount to your total cost. While ready-to-move-in homes are exempt from GST, under-construction projects attract 5% GST (without input tax credit) for residential properties.
• Applicability: Only on under-construction properties.
• Rate: 5% for residential units (as per current norms).
3. Legal and Documentation Charges
Legal due diligence is crucial when buying a property. Buyers often need to pay legal experts to verify title deeds, sale agreements, encumbrance certificates, and other important documents.
• Lawyer fees: ₹10,000 to ₹25,000 depending on complexity.
• Documentation costs: Also includes notary and stamp paper charges.
4. Registration and Stamp Duty
Property registration is a mandatory legal step. In Karnataka, stamp duty is around 5% of the property value, and registration charges add another 1%. These are government-imposed charges and can significantly impact your overall budget.
• Total: Approximately 6% of the property value.
• Note: Varies slightly for first-time women buyers (concessions available).
5. Interior and Furnishing Costs
While this isn’t technically a hidden developer cost, many homes in Bengaluru are delivered as bare-shell units. The cost of furnishing, painting, and installing modular kitchens or wardrobes can quickly add up.
• Estimate: ₹3 lakh to ₹10 lakh or more depending on your preferences.
• Tip: Budget for this separately if the property is not semi-furnished.
6. Home Loan Processing Fees
Banks and NBFCs charge processing fees for sanctioning home loans. While this may seem minor, it adds to your initial outlay.
• Typical charges: 0.25% to 1% of the loan amount.
• Additional fees: Legal and technical evaluation charges.
7. Clubhouse and Amenities Charges
If you’re buying in a township or premium housing complex, you might have to pay additional charges for access to amenities like the clubhouse, gym, sports courts, or community halls.
• One-time or annual charges may apply.
• Check if this is included in your maintenance deposit or billed separately.
8. Parking Fees
Parking is rarely included in the base price of the property. Most developers charge separately for covered or basement parking spaces.
• Cost: ₹2 lakh to ₹5 lakh per parking slot, depending on the location and builder.
9. Preferential Location Charges (PLC)
Want a corner flat, a unit with a better view, or one closer to the elevator? These often come with Preferential Location Charges (PLC).
• Common in high-rise developments.
• PLC: ₹100 to ₹500 per sq. ft. depending on the advantage.
Buying a property in Bengaluru is not just about affording the advertised price. Factoring in these hidden costs can help you make an informed and stress-free decision. Always ask the builder for a detailed cost breakup before signing the agreement and consult a legal expert to ensure transparency. By accounting for these expenses upfront, you can better manage your finances and avoid unpleasant surprises.
