4 EXTRA COSTS YOU PAY WHEN YOU BUY A HOUSE

16 Dec 2020

KEY OBJECTIVES

The objective of this blog is to:

• What are the extra charges to be paid while buying a flat?
• What is a capital gain tax?
• How extra charges are connected to capital gain tax?
• What is PLC?

Home purchasing entails not only simple property costs, but also some of the long-term add-ons that are very essential.

Your dream home has just been completed and you are all set to lock in the payment. But do you know that you have to pay extra costs?

FOUR EXTRA COSTS WHEN PURCHASING A HOUSE THAT YOU END UP PAYING FOR:

• This payment would be unavoidable if you own a car. The total number includes the car parking area when you reserve a home. Its size, whether in an open area or not and its location are the points that essentially decide the price of the parking area. The builder can sell it to some other resident of the project if you plan to let go of this space.

• Let us assume you want to book a flat which is garden facing or on some particular floor, then you will be entitled to pay anything known as a Preferential Location/Locality Fee (PLC). What’s that PLC? To book a home that is in a better position inside a specific layout or complex, it is the extra cost that one must pay. Although the price tag on this is not fixed, there appears to be a greater Preferential Location Charge for luxury projects.

• All societies charge maintenance deposits and there is no escape from paying this extra fee. It is a deposit for potential damages to be incurred by members of the neighbourhood of the house. It also includes the cost of facilities offered, and the wider the list of amenities, the higher the cost.

The deposit for maintenance also depends on the venue. In prime locations like Alipore or Ballygunje, it becomes more costly, whereas areas like Joka or Rajarhat charge negligible amounts.

• Banks run a background check on you before you apply for a home loan to see if you will be able to repay them. They often pursue home inspector services to verify whether the residence is worth its cost. Eventually, you would pay the expense of hiring these services through the bank. It’ll be deducted via your EMI every month.

Kolkata-based realty brand Magnolia has been transparent on all their extra charges in their payment schedule. Check their new HIRA approved project Magnolia Merlion

HOW THE COST OF FACILITIES WILL REDUCE CAPITAL GAINS FROM FLAT SALES?

Capital gains are determined by the selling consideration minus the acquisition cost (adjusted by applying the cost inflation index). The higher the purchase rate, the lower the portion of taxable capital gains.

Capital gains are determined by the selling consideration minus the acquisition cost (adjusted by applying the cost inflation index). The higher the purchase rate, the lower the portion of taxable capital gains. If the consideration for the sale is smaller than the purchase cost, it results in a capital loss.

The capital gains that result from the selling of a flat held for more than two years are considered as long-term and subject to a 20 per cent tax. It is, therefore, necessary for sellers to consider what can be included as the acquisition cost, usually the purchase price, stamp duty, registration cost, and broker fees.

Tax specialists say it is a fact-based exercise to assess what can be applied to arrive at the overall acquisition cost. An I-T official said builders are increasingly offering buyers different facilities, usually at an extra cost. All range from special bathroom fittings, modular kitchens, imported marble floorings, and so on. To escape lawsuits at a later point, when they sell this flat, taxpayers need to obtain a proper separation.

SUMMARY

4 extra costs you pay when you buy a house that you end up paying for. Preferential Location/Locality Fee (PLC) is to pay for a home to be in a better position inside a specific layout or complex. Banks run a background check on you before you apply for a loan to see if you will be able to repay them. They often pursue home inspector services to verify whether the residence is worth its cost. Eventually, you would pay the expense of hiring these services through the bank. Capital gains are determined by the selling consideration minus the acquisition cost. The higher the purchase rate, the lower the portion of taxable capital gains.

Kolkata-based realty brand Magnolia offers the lowest PLC as compared to its competitors. Their project prices are also reasonably priced to promote affordable housing and that’s why their projects sell very fast. Check their new HIRA approved project Magnolia Merlion

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