Purchasing a property is often one of the most significant financial decisions a person will make

While the advertised price might appear within your budget, many buyers are blindsided by a series of
unexpected expenses that arise during and after the transaction.

These hidden charges, if unaccounted for, can inflate your total investment substantially. This article
breaks down the most common property buying traps and provides clarity on what to expect beyond
the base price.

1. Stamp Duty and Registration Charges

While not technically hidden, these government levies are often underestimated. Stamp duty varies by
state and can range between 5% to 7% of the property’s registered value. Registration fees, typically
around 1%, add further to this cost.

Solution: Always check the current rates applicable in your location and include them in your budgeting
from the outset.

2. Goods and Services Tax (GST)
If you're purchasing an under-construction property, GST applies at 5% on the base value (excluding land
cost). Ready-to-move-in properties are exempt, which is why many buyers prefer them.

Solution: Clarify whether the property is GST applicable and whether the quoted price is inclusive or
exclusive of tax.

3. Legal and Documentation Fees

Many buyers overlook the cost of legal due diligence. Services like title verification, agreement drafting,
and compliance checks typically incur fees ranging from ₹10,000 to ₹50,000.

Solution: Hire a certified property lawyer to verify ownership and documentation before signing any
agreement.

4. Loan Processing and Financial Charges
Banks and housing finance companies charge a loan processing fee, usually between 0.25% to 1% of the
loan amount. Additional charges may include technical valuation, legal verification, and administrative
costs.

Solution: Request a detailed fee structure from your lender and explore if any of these charges are
negotiable.

5. Maintenance Deposit and Advance Charges
Most residential developments require buyers to pay a one-time maintenance deposit, often covering
1–2 years. This amount is collected upfront and is separate from monthly maintenance fees.

Solution: Confirm the exact amount and duration of advance maintenance charges at the time of
booking.

6. Parking and Amenity Charges
Parking spaces are often sold separately, and amenities such as clubhouse access, gym, or community
halls may come with an additional price tag. These charges can add several lakhs to your total cost.

Solution: Ensure a detailed breakup of what is included in the quoted price and what comes as extra.

7. Interior and Furnishing Costs
Sample flats are usually showcased with elegant interiors, which are rarely part of the actual sale. From
modular kitchens to wardrobes and lighting, interior setup can significantly raise your final expense.

Solution: Request the specification list of what will be delivered and allocate a budget for postpossession furnishing.

8. Utility and Infrastructure Fees
Many builders pass on charges for electricity, water, gas connections, and infrastructure development to
the buyer. These are often presented as "miscellaneous" or "other charges."

Solution: Ask for a complete cost sheet from the builder that outlines all fees apart from the base sale
value.

9. Shifting and Setup Expenses
Post-purchase costs like movers, utility setup, advance society contributions, and temporary rentals
during shifting are rarely considered in the initial budget but can quickly become a burden.

Solution: Set aside a contingency amount of at least 2–3% of the property value for such costs.

Conclusion:

The journey of buying a property does not end at negotiating the best rate per square foot. The true
cost of ownership includes several hidden or overlooked charges that can disrupt your financial planning
if not anticipated.

Understanding these potential traps ensures that your property purchase remains a sound and stressfree investment. Always request a detailed cost breakdown from your builder or broker and seek
professional advice before finalizing any deal.

Need Expert Guidance?

If you're planning to invest in real estate, Dhanbhumi offers transparent consulting and end-to-end
assistance to help you avoid costly surprises. Get in touch today to ensure a smoother, smarter buying
experience.