FAQ: Are There Hidden Charges in Property Purchase?
Beyond the base price, expect stamp duty, GST, registration, legal, and miscellaneous charges. Here's the complete cost breakdown.
The advertised price of a property is rarely the final price you pay. There are several additional charges — some mandatory, some discretionary — that can add 12–20% to the base price. Knowing these upfront prevents budget overruns.
Mandatory charges:
1. Stamp duty: 4–8% of the property value, varying by state and gender of the buyer. This is the largest additional cost.
2. Registration charges: 0.5–1% of the property value, paid to the sub-registrar for registering the sale deed.
3. GST (under-construction only): 1% for affordable housing, 5% for regular residential, 12% for commercial. Not applicable on ready-to-move property.
4. Legal and documentation: ₹15,000–50,000 for title verification, sale deed drafting, and legal opinion. Engage an independent lawyer — don't rely on the builder's lawyer.
Builder charges (often in the agreement, sometimes overlooked):
5. Preferential location charges (PLC): A premium for specific units — corner units, park-facing, higher floors, or units with special views. Typically ₹100–500 per square foot.
6. Clubhouse and amenity charges: A one-time payment for access to the clubhouse, gym, pool, and other amenities. Typically ₹1–5 lakh.
7. Car parking: Open, stilt, and covered parking slots are charged separately. Covered parking can cost ₹3–10 lakh per slot.
8. Corpus fund: A one-time contribution to the society's maintenance corpus, typically ₹1–3 lakh. This is held in a fixed deposit and the interest is used for major repairs.
9. Maintenance advance: 12–24 months of maintenance charges paid upfront. Typically ₹2–5 per square foot per month, so for a 1,500 sq ft apartment, this could be ₹36,000–90,000 per year.
10. Electricity and water connection charges: ₹25,000–75,000 for permanent connections.
11. Interior fit-out deposit: Some builders charge a refundable deposit (₹25,000–1 lakh) during the interior work period, to cover potential damage to common areas.
12. Home loan processing fee: 0.25–0.5% of the loan amount, charged by the bank.
Total impact: For a ₹1 crore under-construction property in Bengaluru, the additional charges typically total ₹12–18 lakh — stamp duty (₹5 lakh), registration (₹1 lakh), GST (₹5 lakh), PLC (₹2–5 lakh), clubhouse (₹2 lakh), parking (₹5 lakh), and miscellaneous (₹1–2 lakh). That's a 12–18% premium over the base price.
Our rule: always ask the builder for an 'all-inclusive cost sheet' that lists every charge. Compare the all-inclusive price across projects, not just the base price per square foot. The base price comparison can be misleading if one builder has higher PLC, parking, and amenity charges.
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