Be wary of the hidden charges while buying property in Delhi

Description: Hidden Charges increase the actual cost of the property; therefore, it’s better to keep in mind these charges while preparing the budget for a new property.


Buying a property in Delhi is one of the most important decisions for those who want to settle in the capital. The buyer goes out of his or her financial capabilities and prepares the budget to buy the property. But often, the buyer ends up paying extra which he or she does not realize. There are a number of extra charges in the form of extra taxes and other fees which comparatively makes the property much costlier than its actual price. This extra amount other than the actual cost of the property hurts the buyer’s pocket as it gets out of the buyers allocated budget for the property. Hence, the buyer needs to be aware of these hidden charges to prepare the budget accordingly, before investing in a new property.

1. Stamp duty and registration fees: 
Getting a property in Delhi registered is an important aspect in the property buying process. It is a final agreement between both the parties that indicate the change in ownership of the property. In order to get the registration done, one has to pay a certain amount to the government. The registration form costs a particular amount, depending on the total property value. Though the charges for stamp duty and registration for Property in India varies from state to state, but usually it is between 4% to 10%. Typically, in a majority of the states, this registration and stamp duty fee adds up to 5% - 14% of the cost of the property. In addition to this expense, there is another registration fee that is payable to the court which differ from state to state and varies between 1% to 2% of the value of the property.  And, above all, there are additional costs that include lawyers and notary fees, who get the agreement done in the court.

2. Service Tax and VAT:
The service tax is applicable on the purchase of any property in India that is under construction while the VAT is charged over the value of the construction of the project. The imposed service tax is 12.36% of the 25% value of the under constructed property. Whereas the imposed VAT is between 1% to 5% of the under constructed property value. Altogether, the service tax and VAT can add up to 8% to 10% of the entire property value.

3. Preferred Location Charge (PLC):
The term Preferred Location Charge, commonly known as PLC refers to the extra charge that is levied from the buyer to buy property in Delhi in their choice of location. This is applicable specifically in a housing complex, layout or residential community. Though this charge differs from builder to builder and project to project. Lavish villas, penthouses facing the sea or garden are most likely to have higher PLCs.

4. Utility Charges:
The charges referring luxury amenities or those linked with the building come under utility charges. This includes parking in open or closed space, clubhouse membership for a lifetime or yearly, firefighting provision, electrical and various other charges associated with Government utilities as well. Apart from these there are other charges involved while buying property in Delhi such as maintenance, security charges, and others also. Security charges refer to the expense for employing security personnel, installing and maintaining security arrangements like CCTVs camera, intercom among others. These extra charges add up to the initial cost of the project in a huge way and become a burden on the shoulder of the buyer.

5. External Development Charge (EDC):
EDC is usually meant for the maintenance of roads, water, sewage, electric supply, lights and development of the surrounding area. It varies from location to location and adds up to 10% of the entire cost of the project. Sometimes the government also levies development charge on the developer. These charges also are also charged in the form of maintenance fees in advance for a longer period of time. This is a great disadvantage the buyer as he has to shell out extra amounts for which he does not prepare himself.


This is a guest post by Seema Chauhan

The Real Property Market of North India - an Insight

The property market of northern India has scaled great heights in the last few years. From Gurgaon to Noida and now Bharatpur to Bhiwadi in Rajasthan, the property market of northern India has evolved to a great extent.

Decades after the real estate giant DLF developed Gurgaon, the realty boom in northern India has been creating ripples ever since. Initially it was Gurgaon that emerged as the hottest property destinations in Delhi/NCR during the mid 2000s. Then on the other part, Noida in Uttar Pradesh also started gaining popularity as a realty destination. As the country’s economy started gaining new grounds, the real estate landscape also underwent tremendous changes. Now, in the last five years, major cities across north India has joined the realty boom bandwagon. Among them tier II cities like Chandigarh, Jaipur and Manesar are worth mentioning. The real estate market, especially the residential segment in these cities has proliferated rapidly over the last five years. Affordable Flats in Chandigarh, Jaipur and even Manesar have been experiencing a huge demand among the end users.

Coming back to the real estate scenario of the nucleus, that is Delhi/NCR, surrounding areas have been developing at a great pace; so much so that new areas are being included with each passing day, though most of them are nondescript. Mahendragarh and Bhiwani in Haryana have been announced to be a part of NCR. Developers are queuing up and investors are banking on the capital values of these regions. At a more recent event, Bharatpur in Rajasthan, known for its famous Keoladeo Bird Sanctuary has also been declared to be included within NCR. Though the property market in the region is yet to develop, but industry experts opine, that the market will develop pretty soon. It is estimated that these areas will experience at least 15 percent rise in the property prices. So, properties in Bhiwani and Mahendragarh, now available at a price of INR 3000 on an average are bound to increase to at least INR 4000 in the next four years.

Barely a year or two old, the residential property segment of Bharatpur, is already selling at INR 1500 per square feet while the industrial plots come at a cost of nearly INR 200 per square feet. The government’s plan for the development of a rapid rail transit system is expected to add to the realty market of these areas.

On the other hand, Bhiwani, 125 kilometres from Delhi and Mahendragarh about 70 kilometres has already witnessed the foraying in of top international brands in retail; and some leading finance companies have also set up operations in these regions. These are all signs of a bright future of the property market of these areas. At the Rajasthan front, in Bharatpur, builders have already started constructing in-roads. Demand for residential apartments has increased in areas like Manesar, Bhiwadi and even Bharatpur.

The industrial hub of Bhiwadi in Rajasthan is one of the fastest emerging residential townships in northern India. Spread over nearly 5300 acres of area, Bhiwadi has long attracted a lot of attention from investors and developers. Real estate developers have been highly instrumental in developing the property landscape of Bhiwadi. The township today boasts of the presence of well-known developers, like Omaxe, Avalon and Ashiana.

Moreover, the rapid infrastructural developments, like the expansion of the Honda factory has seen an increase in the workforce of the area which in turn has had a positive impact on the real estate market.

So, initially restricted to Gurgaon, Noida, now the real property market has spread to areas like Punjab, Haryana and Rajasthan. Towns like Manesar and Faridabad in Haryana, Bhiwadi and now Bharatpur in Rajasthan; and of course the state capitals like Jaipur and Chandigarh have raised the bar when it comes to the property market of northern India. Following the current status, it can be said that the property market of north India has loads to offer in the coming ten years.

This is a guest post by Sampurna Majumder. Currently she is writing about latest trends related to real estate.