Table of contents:
- Introduction
- Unfold The Overheads
- Down Payment
- EMI
- Registration & Stamp Duty
- Goods and Services Tax (GST)
- Homeowners Insurance
- Property Tax
- Maintenance Charges
- Utilities
- Furniture and Interiors
- Factors Affecting Property Prices From City to City
- Location
- Economic Growth
- Regulations and Zoning Laws
- BENGALURU
- CHENNAI
- MUMBAI METROPOLITAN REGION (MMR)
- KOCHI
- Decision Of A Lifetime
Introduction
Are you all set to embark on the exciting journey of finding your dream home? Well, we are sure that, like every first-time home buyer, you have plenty of questions on your mind. Buying a house is not only life’s biggest financial investment, it’s an emotional milestone, too. There are many costs to consider beyond the purchase price. To begin with, what other expenses come into play when buying a house? Let’s explore the additional factors that contribute to the total cost of homeownership!
Well, the ‘true’ cost of owning a home is much more, and it includes expenditures of various kinds – some of which you may have factored in and some of which you may not have been aware of. Read on, and you will get an in-depth understanding of how much buying a house will really cost you in some of India’s major cities, including Bengaluru, Chennai, Mumbai, and Kochi.
Unfolding The Overheads
Several expenses go into owning a property – both one-time charges and recurring costs. Let’s take a look:
- Down Payment: Down payment is the bulk sum you pay when finalising your home deal. This one-time payment is a percentage of the property price. In India, a down payment is usually 20 per cent of the total price. For example, if your apartment costs Rs 1 crore, you will have to pay Rs 20 lakh as the down payment. However, this could vary as different developers come up with different offers for the benefit of home-buyers.
- EMI: Once you make the down payment, you can get a home loan for the remaining amount. Interest is levied on the principal amount of the loan, and its rate varies between 8.35 per cent to 12 per cent. Your EMI depends on multiple factors like the loan amount, the interest rate and the tenure amount. The shorter the repayment tenure is, the higher your EMI will be. You can pay it off as Equated Monthly Instalments (EMI) over a certain number of years. While the minimum tenure for repayment of a home loan is two years, the maximum can go up to 30 years.
- Down Payment: Once you make the down payment, you can get a home loan for the remaining amount. Interest is levied on the principal amount of the loan, and its rate varies between 8.35 per cent to 12 per cent. Your EMI depends on multiple factors like the loan amount, the interest rate and the tenure amount. The shorter the repayment tenure is, the higher your EMI will be. You can pay it off as Equated Monthly Instalments (EMI) over a certain number of years. While the minimum tenure for repayment of a home loan is two years, the maximum can go up to 30 years.
- Registration & Stamp Duty: These are one-time charges that need to be paid when the transfer of property ownership happens. These charges are levied by the respective state governments and, hence, vary across the country. However, generally speaking, while the stamp duty is between five and 10 per cent of a property’s market value, registration charges tend to be between one and two per cent. Apart from the market value of the property, these charges are also based on the location (of the property) and age and gender of the buyer, among others. Registration charges may differ by state. Some states offer lower rates for female buyers.
- Goods and Services Tax (GST): If you are buying a house/apartment for which the Completion Certificate (CC) has already been obtained by the developer, you need NOT pay the GST. However, if you are buying an under-construction property for which the CC is yet to be obtained, you have to pay the GST. The GST is one per cent of the property value in the affordable housing segment and five per cent if it’s not in that segment.
- Homeowners Insurance: It’s a must to insure everything that’s precious to you, and a house is no different. Insurance coverage will protect your property from damage due to unanticipated, unforeseen circumstances. Apart from the house, other valuables like portable equipment, household items like kitchen appliances, furniture, lights, artworks, jewellery and even clothes are covered. The premium of your home insurance policy depends on the location of the property, its type, age, value and the extent of security measures installed (which makes it safe from thefts and robberies).
- Property Tax: These taxes are levied annually by your local government bodies , depending on where your property is located. The tax is a percentage of the market value of the property.
- Maintenance Charges: This monthly charge is determined by your housing society. It’s for the regular upkeep of the property, including repairs, cleaning, and landscaping. The expenses for potential replacements of common amenities and appliances (lighting) and roofing over time are also included. According to the Real Estate Regulatory Authority (RERA) rules, maintenance charges can vary from Rs 2 to Rs 25 (per sq. ft) and even more, depending on factors like the location of the property.
- Utilities: When buying a house, also calculate monthly expenditures like electricity, water, gas, trash collection, and internet charges. All these will vary depending on your usage and local rates.
- Furniture and Interiors: While not a frequently recurring cost, decorating your new home to fit your taste and liking can be a significant upfront expense. When planning your finances to buy a new house, make sure to take into account all the above-mentioned expenses.
Factors Affecting Property Prices From City to City
When it comes to realty prices, there are many factors that influence the market value of a property. Let’s take a quick look at them:
- Location: Prime locations within a city will typically have higher property value due to land scarcity and desirability.
- Infrastructure Development: Cities with well-developed infrastructure like good roads, reliable power supply, and efficient waste management often see higher property prices as these features enhance property value.
- Amenities and Facilities: Proximity to parks, schools, hospitals, and entertainment options can significantly increase overheads.
- Economic Growth: A city’s overall financial health plays a major role. Cities with good employment prospects lead to higher property values and overheads.
- Regulations and Zoning Laws: Stricter construction rules or limitations on development might push costs up due to limited supply. For example, properties near environmentally sensitive zones like national parks, wildlife sanctuaries, mangroves and coral reefs, monuments, etc. Zoning laws also tend to increase property rates because they can create desirable neighbourhoods with specific amenities. For example, zoning laws might designate an area for single-family homes, which can be more expensive than multi-unit dwellings.
Now that you know the common overhead expenses involved in buying a house and the external factors that affect its price, let’s look at the true cost of homeownership in the following Indian cities. We have included both prime localities and localities that are becoming increasingly popular among homebuyers owing to the expansion of these cities. The tables below will give you an idea of how much a 1,000 Sq.Ft house will cost, along with stamp duty, registration charges, and GST.
BENGALURU
| Location | Price Per Sq.Ft | Stamp Duty & Registration (On property above Rs 45 lakh) | GST (percentage of property price in the non-affordable housing segment) | Maintenance (Per Sq.Ft) Depending On Amenities | Total Cost for a home with a sale value of 1,000 sq,ft (Excluding maintenance as that’s a monthly expense) |
|---|---|---|---|---|---|
| Indira Nagar | Rs 14,843 | 5% and 1 % | 5% | Rs 2 to Rs 25 | Rs 1,64,75,730 |
| Sadashiva Nagar | Rs 17,911 | 5% and 1 % | 5% | Rs 2 to Rs 25 | Rs 1,98,81,210 |
| Kanakapura Road | Rs 7,150 | 5% and 1 % | 5% | Rs 2 to Rs 25 | Rs 79,35,500 |
| Whitefield | Rs 9,600 | 5% and 1 % | 5% | Rs 2 to Rs 25 | Rs 1,06,56,000 |
Source: 99acres and magicbricks
CHENNAI
| Location | Price Per Sq.Ft | Stamp Duty & Registration (On property above Rs 45 lakh) | GST (percentage of property price in the non-affordable housing segment) | Maintenance (Per Sq.Ft) Depending On Amenities | Total Cost for a home with a sale value of 1,000 sq,ft (Excluding maintenance as that’s a monthly expense) |
|---|---|---|---|---|---|
| Adayar | Rs 15,700 | 4% & 0.5% | 5% | Rs 2 to Rs 25 | Rs 1,71,91,500 |
| Pudupakkam | Rs 5,906 | 4% & 0.5% | 5% | Rs 2 to Rs 25 | Rs 64,67,070 |
| Anna Nagar | Rs 10,050-17,800 | 4% & 0.5% | 5% | Rs 2 to Rs 25 | Rs 1,10,04,250 |
| Besant Nagar | Rs 20,651 | 4% & 0.5% | 5% | Rs 2 to Rs 25 | Rs 2,26,12,845 |
Source: 99acres, magicbricks, housing.com, nobroker
MUMBAI METROPOLITAN REGION (MMR)
| Location | Price Per Sq.Ft | Stamp Duty & Registration (On property above Rs 45 lakh) | GST (percentage of property price in the non-affordable housing segment) | Maintenance (Per Sq.Ft) Depending On Amenities | Total Cost for a home with a sale value of 1,000 sq,ft (Excluding maintenance as that’s a monthly expense) |
|---|---|---|---|---|---|
| Cuffe Parade | Rs 63,450 | 5% & Rs 30,000 | 5% | Rs 2 to Rs 25 | Rs 6,98,25,000 |
| Worli | Rs 62,200 | 5% & Rs 30,000 | 5% | Rs 2 to Rs 25 | Rs 6,84,50,000 |
| Powai | Rs 34,600 | 5% & Rs 30,000 | 5% | Rs 2 to Rs 25 | Rs 3,80,90,000 |
| Kalyan (W) | Rs 10,550 | 6% & Rs 30,000 | 5% | Rs 2 to Rs 25 | Rs 1,17,40,000 |
Source: 99acres and magicbricks
KOCHI
| Location | Price Per Sq.Ft | Stamp Duty & Registration (On property above Rs 45 lakh) | GST (percentage of property price in the non-affordable housing segment) | Maintenance (Per Sq.Ft) Depending On Amenities | Total Cost for a home with a sale value of 1,000 sq,ft (Excluding maintenance as that’s a monthly expense) |
|---|---|---|---|---|---|
| Edappally | Rs 6,500 | 8% & 2% | 5% | Rs 2 to Rs 25 | Rs 74,75,000 |
| Kadavanthra | Rs 7,477 | 8% & 2% | 5% | Rs 2 to Rs 25 | Rs 85,98,550 |
| Marine Drive | Rs 9,007 | 8% & 2% | 5% | Rs 2 to Rs 25 | Rs 1,03,58,050 |
| Kaloor | Rs 6,994 | 8% & 2% | 5% | Rs 2 to Rs 25 | Rs 80,43,100 |
Source: 99acres, magicbricks, housing.com, nobroker
Decision Of A Lifetime
Ultimately, owning a property is a journey, not a destination. By taking a well-informed and financially responsible approach, you can transform your dream home into a source of pride, stability, and lasting value for years to come. Always remember that the ‘true’ cost of owning a home involves much more than what is obvious. So, go forth, explore the options in your chosen city and make your dream of homeownership a reality!
