5 Hidden Costs to Watch Out for When Buying Property in Chennai

Buying property in Chennai is an exciting yet complex process. While most buyers focus on the property price, there are several hidden costs that can impact your budget. Understanding these expenses will help you plan better and avoid unexpected financial strain. Here are five hidden costs you should watch out for when purchasing property in Chennai.

1. Stamp Duty and Registration Charges?

Stamp duty and registration fees are mandatory government charges that can significantly increase your property purchase cost. In Tamil Nadu, stamp duty is approximately 7% of the property's market value, while registration fees add another 4%.

Example: If your property costs ₹50 lakhs, you may pay an additional ₹5.5 lakhs in stamp duty and registration fees alone.

Tip: Verify the correct market value of the property and budget for these expenses accordingly.

2. Legal and Documentation Charges

Many homebuyers underestimate the importance of legal verification. Engaging a qualified lawyer to verify title deeds, encumbrance certificates, and property ownership records is crucial. Legal fees may range between ₹5,000 to ₹20,000 depending on the complexity of the documents.

Tip: Always hire a trusted legal advisor to ensure your property has a clear title and is free from disputes.

3. Maintenance and Society Charges

Once you move in, maintenance charges become a recurring cost. Housing societies may charge upfront fees for maintenance, security, and amenities like elevators, parks, and clubhouses. These costs can vary widely based on the property size and amenities offered.

Tip: Clarify the monthly maintenance fees before purchasing and assess if they fit within your budget.

4. Utility Connection and Deposits

Setting up utilities such as electricity, water, and gas often requires initial deposits. For instance, electricity deposits can range between ₹5000 to ₹20,000, depending on the property's size and load requirements. Water connection fees may also vary depending on the locality.

Tip: Ask the seller or builder about pending utility deposits or connection fees before closing the deal.

5. GST on New Properties

For under-construction properties, the Goods and Services Tax (GST) applies at 5% of the property value without an input tax credit. This cost can significantly increase the final purchase amount.

Example: For a property worth ₹60 lakhs, you may need to pay an additional ₹3 lakhs as GST.

Tip: Consider whether buying a ready-to-move-in property may save you GST costs compared to under-construction options.

Bonus Tip: Miscellaneous Costs to Consider

• Home Loan Processing Fees: Banks may charge 0.5% to 1% of the loan amount as processing fees.
• Interior Design and Furnishing: Post-purchase expenses for interiors and furniture can add up quickly.
• Moving Costs: Relocation expenses can vary based on distance and belongings.

Conclusion

While property prices are a major consideration, these hidden costs can impact your overall budget. By being aware of these expenses, you can plan effectively and make a well-informed decision. For expert advice on property investments in Chennai, consider consulting Chennai Anna Nagar Co-operative Housing Society Ltd. With the right knowledge and guidance, you can secure your dream home without unexpected financial surprises.