Major Cost Parameters You Should Know About While Buying a New Property

Major Cost Parameters You Should Know About While Buying a New Property

Having your own home in a city like Pune is a dream for so many people. Since there are so many real estate developers in Pune, there are thousands of options for buying a house.

But the real estate deal should be done with someone very trustworthy. For that, you should prefer only RERA registered developers in Pune.

Costs involved while the property is the major concerns for all of us and to clear the fog about it, we are bringing you a small guide.

Read this if you are confused if suppose the price of a certain property rises by 5 to 6 Lacs than what was mentioned.

The major costs involved in ongoing residential projects in Pune are:

Before we jump to the major costs involved in buying a property, let’s have a look at the overview of the costs.

Let’s assume you decide to buy a home at Wakad, Pune. The builder has negotiated the price to Rs.80 Lacs.

  • Purchase price of the property: Rs.80 lakhs
  • Registration and stamp duty: Rs.4.80 lakhs
  • Interiors: Rs.6 lakhs
  • Shifting Rs.20,000
  • Total Funds required: Rs.91 lakhs

Finance

  • Home Loan : 70% of cost ( Rs.80 lakhs) : Rs.56 lakhs
  • Funds to be put in by buyer: 91-56 = Rs.35 lakhs

The complete breakup of the 2 BHK flat of 1000 sq. ft. the saleable area with a rate of Rs.5,500 per sq. feet

  • Basic Cost : 55,00,000
  • Car Parking : 2,00,000
  • Preferred Location Charge : 1,50,000
  • Agreement Value : 58,50,000
  • Infrastructure(Gas, Electricity) : 1,00,000

Total Cost : 59,50,000 

  • Stamp Duty @5% : 2,97,500
  • Registration Charges : 30,000
  • Service Tax 3.09% of Basic Cost including car parking: 1,76,130
  • Service Tax 12.36% on other charges: 12,360
  • VAT 1% of Agreement Value : 58,500

Total Cost : 65,24,490 

Here is the explanation for all the costs a developer will charge you when you are buying a property and sign the agreement:

Major Cost Parameters You Should Know About While Buying a New Property

Basic Sale price (BSP)

BSP is the value that is promoted by the developer and it’s the main price of your property.

Preferential Location Charge (PLC)

You will need to pay the higher price if you wish property in a location preferred by most of the people. The PLC charges are usually 4% of BSP. So, add 4% to the overall price if you want a preferred location for yourself.

External Electrification Charges (EEC)

Developers charge this price to get down cables and wires from electricity consumption meter to the flat.

Fire Fighting Equipment Charges (FFEC)

This is quite obvious. All projects, be it a residential or business are meant to install fire safety devices and fire fighting instrumentation.

Infrastructure Development Charges (IDC)

These charges are paid on to the state government by the developer for developing the infrastructure for the project. The fees vary from state to state.

External Development Charges (EDC)

These charges are again paid on to the state government by the developer for developing the external areas around the project. The fees vary from state to state.

Car Parking Space (CPC)

Have you ever bought a parking lot in India? If this is often the first time you are buying a flat in a society, then this could come as a surprise to you. If you want you can purchase both covered and open parking.

Club Membership

This has become a standard norm these days to form a club inside a society itself for recreational activities. Your society might or might not have this facility however if it has, it doesn’t come FREE.

You need to pay a price for it and its NOT optional.

Power Back-Up Charges

A power failure is also an alien term in developed countries but India actually wants a good power back-up. There are charges for setting up the power back up plant inside your society and keep your air conditioners running even when there is a power cut from the state electricity board.

Electric connection charges

Do not be under the impression that if you have paid the EEC and power back up charges, you are finished your electricity needs. EEC is an amount charged by developer only to line up the infrastructure for getting electricity to your apartment.

You will need to pay the particular application fees for putting in the electricity meter and a connection to the electricity board of your state for actually getting electricity.

Water, drainage and sewerage charges

Hmm…fed from all the charges? How can we miss the most precious resource on earth? You would be needed to buy water facility set up in the complex too. The fees are paid to the government and can vary in line with your state.

Stamp duty and registration charges

These charges are paid to the state government for registering property on your name. This fee is charged as a share of the registered price of the property and varies from state to state.

GST on Real Estate

GST Tax

This is an absolute killer as far as shopping for a property is concerned. Government charges you GST tax (Earlier service tax was charged) on the under-construction property at the present prevailing rate on the overall price of the flat.

The affordable housing GST rate is 8%.

This might seem a little tough but it is very simple once you understand the story. So if you are thinking of investing in ongoing residential projects in Pune, you should get a clear idea about the various costs involved in buying a house. Find a trustworthy real estate developer in Pune for a secured future. To know more in details, visit us at Kasturi and get the transparent experience of property dealing.

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