Where your money goes when making a property purchase |
Posted: May 5, 2017 |
Buying a property is a tedious task today, especially when you have to incur several hidden costs. And with the government now imposing several taxes on different property types one has to be aware of the list of taxes that are charged on properties in India. Below are the list of taxes a home buyer has to incur while purchasing a property in the country. Registration fees Cited to be a document that settles the home buying agreement registration is very important. It names the new owner as the legal owner of the property and it has signatures of both parties that confirm the same. And to get the property transferred to your name, you have a pay a small amount as registration fees. The process begins when a draft is prepared on a stamp paper and copies of the transaction documents are registered with the Sub-Registrar of Assurance under the provision of the Indian Registration Act. A registration fee for properties costing more that Rs 30,000 is fixed to be at 1% of the agreement value/market value whichever is higher. Tax Deducted at Source Very recently implemented under Section 194-IA, TDS is surcharge that has been levied to those whose home/property cost Rs 50 lakhs or more. Apart from an agricultural land, a total of 1% TDA of the entire transaction is charged while transferring or selling the immovable property. The owner has to submit the PAN number details and provide a permanent address of the seller otherwise the TDS rate could go up to 20%. The TDS has to be submitted in the same of the seller of the property and not the owner. Parking Space fees Charging an additional upfront payment for spaces that let you exclusively park your vehicle has become the latest trend. Developers who build large apartments usually ask for an amount ranging anywhere between Rs 2 lakhs and Rs 5 lakhs as parking space fee. Although the Supreme Court ruled that stated that no additional cost can be charged for parking within the residential project, however most of the property developers today try to bypass the provision and charge an extra amount to the overall cost of the property. Down payment of maintenance deposits Off late several property developers have begun to very blatantly ask owners to deposits maintenance charges for as long as 10 years in advance for apartments. Although the charge is not levied on every property, but if the property has been purchased in a gated community or an extravagant residential project you might have to pay a lump sum as maintenance advance. Apart from these major charges there are other costs like unpaid civic authority dues and unapproved plans that need to be paid by a home buyer. It’s really essential for a home buyer to add a surplus of 25% of the cost of the property to the current property budget. This will not only help you meet all the last minute hidden and unexpected costs it will also help your plan your home loan better.
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