What are the Hidden Costs in Buying House in India ?

When you are planning to buy a house, you consider all the essential costs. You look forward to affordable home prices, good housing loans and low mortgage rates, etc. However, there are some hidden costs involved in the process as well. The price that builders advertise or tell you is only fixed base price, but there are lot of things apart from this that you have to inoccur, which increase your house cosrt by 20-30%. It is important for a buyer to have information about these costs, too, so that they prepare their budget accordingly and have a clear idea about what the total costs will come out to be. So, enlisted below are the hidden costs that are usually involved in house buying in India:

EDC Charges:

External Development Charges are imposed by the developer of the property for maintenance of electricity supply, water, sewerage, roads and street lights. It is up to 10% of the base cost.

Infrastructure Development Charges:

These are levied by the government on developers for the development and maintenance of the infrastructure of the project. It generally ranges from INR 37.50 to INR 100 per sq. ft.

PLC (Preferential Location Charges):

Preferential Location Charges depends on the alignment, size and price of the apartment, the city and the climatic conditions. It can range from INR 25 to INR 100 per sq. ft. Builder use to charge for particular floor, particulat view. E.g. First Floor, Park facing, Road facing etc. Are PLC charges builder use to charge.

Utility Charges:

These charges are levied by developers for providing ultra-luxurious amenities, such as parking or club membership. It is generally charged either annually or for a lifetime.

Maintenance & Security Charges:

These are levied for maintenance of street lights, parks, roads, electricity and water backup and other such common facilities. They are charged on monthly, quarterly or annual basis.Security Charges are charged on a monthly basis for providing security personnel, installation and maintenance of security arrangements, etc.

Stamp Duty and Registration Charges :

Stamp Duty is mandatory to be paid to the state government to get the house registered. The charges may vary depending on the state though it is generally 5-7%. Registration Fee is paid to the court and is generally 1-2% if the total cost of the house. It includes the expenses related to the lawyer, notary and the broker as well.Service Tax and Value Added Tax are some other charges that you will have to pay.

Parking and Extra Charges:

Builder use to charge for Parking space, commercial prospects, independent houses, location, construction quality are other features that may demand for extra charges.


The lender may require home insurance. It can be a little costly as it is influenced by a number of factors, such as the location, quality of construction material used, etc. With time, insurance costs of your house may rise. If you are living in an area that is prone to earthquakes and flood, it is suggested to take up supplemental insurance.


If you are going through a broker then brokerage is paid to the dealer as commission from the one buying the house. It is usually 1 to 2% of the total cost of the house.


Fixed Cost is levied per sq. ft. It is the total sum of the cost of the plot and the constructed portion of the property. It also includes the cost of renovation and refurbishment.

Recurring Costs include the registration charges, property taxes, charges for civic amenities, water and electricity charges, etc.