Investing in luxury real estate is a crucial milestone in everyone’s lives. To buy a place you can call your own comes with a sense of comfort, security and stability. However, purchasing a luxury home is no cakewalk. Apart from finding a home that is the right fit for you and your family’s needs, it is also important to analyse the total cost of your forever home. In the end, these charges could significantly raise the price of your luxury home above the quoted price. If you are someone for whom a budget is important this could be something you may not be prepared for. Here are some hidden additional costs you should know of before you consider buying a luxury home:

Preferential Location Charges (PLC)

Preferential Location Charges or PLC, have become a standardised cost inclusion in property prices. These charges are levied by builders on reserving a property at a location of your preference. A sea-facing luxury apartment on the 10th floor would be priced higher than a similar apartment on a lower floor or a non-sea-facing apartment on the same floor. These charges are generally mentioned on the builder’s website and the final property price can be calculated accordingly. They are not regulated by any authority and hence, are completely subject to the builder’s discretion. Choice of the floor, climatic conditions, amenities such as private terraces for apartments, Vastu shastra compliance, urban or rural location, and apartment view are some factors that can all heavily influence the PLC. Read more about our blog post on upscale, upcoming areas ideal for property investment. 

Advance Maintenance Deposit

While purchasing a luxury home, you will be required to pay an additional sum as a deposit towards maintenance charges. This money will be utilised for the upkeep of your residential complex through timely repairs, upgrades and maintenance of swimming pools, gyms, parks etc. For most luxury properties, this cost can go upward of ₹50,000 per month. Most builders prefer charging 2-3 years’ worth of maintenance costs in advance as it creates a stable influx of funds. This can considerably raise your final property price.

Registration Costs

When you’re purchasing a property, it generally comes with an additional cost of registration and stamp duty. This amount is directly dependent on your property’s price and varies with each Indian state. Throughout India, stamp duty costs around 5-7% of the property’s price on average. Along with that, 1% of the property cost will be payable to the court as a registration fee. In luxury homes, this amount could come to lakhs and could easily affect your budget. Moreover, you should also consider the charges for a notary and any other legal services that you may need. 

Cost on Interior Designing

Luxury homes do come with some wonderful, elaborate amenities and decor. However, it may not always match up to your tastes and needs. You can take into account factors such as addition or modification of the security systems, introducing tech into your home, fine-tuning the decor to your taste etc. If you’re looking to spruce up your forever home, you will need to consider an interior designer’s fees that could go upwards of 2 lakhs. Read our post on interior design trends for 2022.

Taxes and Other Charges

The taxes are only applicable to properties that are under construction. The Goods and Service Tax (GST) and Value Added Tax (VAT) vary with state and are payable to the government. Additionally, if you’re considering getting home insurance, that could add to the property’s cost as well.

Realtor’s Charges

This one’s a no-brainer. If you’ve found your luxury home through a broker, their fees will amount to a good 1-2% of your property cost, maybe more. Brokers tend to generally charge more when luxury properties are involved, something you should definitely be mindful of. It would be wise to have some written contracts in place while dealing with brokers to avoid any unforeseen changes.