What Makes Up the Complete Cost of a Property in India?

Buying a home is one of the biggest investments in life. While the **Basic Selling Price (BSP)** forms the foundation of property costs, several additional charges—both developer-imposed and government-mandated—can significantly increase the final amount a buyer pays. Let’s break down the total property cost and its components.

What is BSP (Basic Selling Price)?

The BSP is the core price of a property and does not include taxes, registration, or maintenance charges. It primarily consists of:

1. Undivided Share (UDS) of Land – This refers to the portion of the land assigned to an apartment within a society, which is legally registered in the owner’s name.
2. Construction Costs – This covers labor, materials, and other expenses related to building the apartment.

Essentially, when you purchase a property, you are paying for both the land and the construction work.

Additional Charges by Developers

Apart from the BSP, developers often levy other costs. Some of the common ones include:

1. Preferential Location Charges (PLC)
   • PLCs are added for apartments in premium locations such as corner plots, units facing parks, roads, or golf courses.
   • In Delhi NCR, lower floors are more desirable, while in Mumbai, higher floors are preferred. PLCs are calculated per square foot and vary depending on the location.
2. Parking Charges
   • Many developers charge for covered parking spaces, typically ranging from ₹2 lakh to ₹5 lakh per unit.
   • Charges may also apply for additional parking spaces if required.
3. Maintenance Fees
   • Societies levy maintenance charges for amenities and upkeep. These may be collected monthly or as a bulk payment when moving in.
   • Charges exceeding ₹7,500 per month attract an 18% GST on maintenance fees.
4. Club Membership Fees
   • Modern housing societies often provide club facilities like gyms, swimming pools, and party lawns.
   • Buyers usually pay a one-time membership fee, and in some cases, recurring charges apply.
5. Civic Amenities Charges
   • Developers may charge for facilities like fire safety, water supply, and electricity backup.
   • Examples include External Electrification Charges (EEC) and Fire Fighting Equipment Charges (FFEC).
6. External Development Charges (EDC) and Infrastructure Development Charges (IDC)
   • These are government charges paid by the developer for developing infrastructure like roads, parks, and drainage.
   • The cost is ultimately passed on to the buyer.

Government-Imposed Costs

When buying a property, buyers also pay certain fees directly to the government:

1. Goods and Services Tax (GST)
   • Applicable to under-construction properties.
   • Properties above ₹45 lakh: 5% GST (without Input Tax Credit).
   • Affordable properties (up to ₹45 lakh): 1% GST.
2. Stamp Duty and Registration Fees
   • Stamp duty and registration fees legally transfer ownership of the property to the buyer.
   • Stamp duty: Usually 4–8% of the property value.
   • Registration fees: Typically 1–3% of the property value.
   • Some states offer reduced rates for women or rural property buyers.

Key Takeaways

• The total cost of a property is the sum of the BSP, developer charges, and government fees.
• Buyers should also consider potential project delays and inflation, especially for under-construction properties, as these can increase overall costs.

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