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Purchasing a property is a significant milestone for many individuals, as it represents a lifelong investment and the realization of a dream. This holds especially true for those looking to buy properties in Mumbai, a city known for its real estate market's complexities and high prices. While the cost of the property itself, along with expenses related to construction and furnishing, are typically at the forefront of one's mind during the initial planning stages, it is crucial to be aware of additional charges that can catch you off guard. By understanding and considering these four key factors, you can better prepare yourself for the financial aspects of acquiring a property in Mumbai.

1. Registration Charges and Stamp Duty:
   
   Upon identifying a house or flat that suits your needs, the next step is to complete the property registration process, officially transferring ownership in your name. To accomplish this, you will be required to pay a registration fee to the state government. In Mumbai, as well as throughout Maharashtra, the stamp duty amounts to 5% of the property's value, while registration charges typically constitute approximately 1% of the stamp duty. By budgeting for both the stamp duty and registration fee, you can proceed with confidence, knowing that the property will soon be legally registered under your ownership.


2. Goods and Services Tax (GST):
   
   GST is a tax imposed by the Central government, encompassing both the previous VAT (Value Added Tax) and service tax. However, it is important to note that GST only applies to properties under construction. The applicable rate is currently set at 12%, which allows for full input tax credit. If you are considering the purchase of a completed flat in Mumbai, provided the builder possesses a Completion Certificate, you will be exempt from paying this tax. On the other hand, if you opt for a property still under construction, you will be subject to the 12% GST.


3. Maintenance and Parking Charges:
   
   Living in a society or housing complex has become commonplace for most residents of Mumbai, as independent houses are typically only affordable for the affluent. If you choose to purchase a property within a society, you will be responsible for maintenance charges, covering the upkeep of shared amenities such as gardens, swimming pools, clubhouses, gyms, and more. In some cases, these charges may also encompass common utilities like water and electricity. If the society is newly developed, you will pay these charges to the builder, whereas in pre-existing societies, payment is made to the existing society members.
   
   Additionally, it's important to note that the cost of parking space is typically not included in the house price. You will need to separately purchase a parking space, with the price varying based on factors such as size, location, and whether it is covered or uncovered.


4. Preferential Location Charges (PLC):
   
   Mumbai, despite its allure, is known for its crowded nature. If you have dreamed of owning a sea-facing flat or one with a unique aspect, it's essential to be aware that such features often come with additional costs. Certain flats within a building may demand Preferential Location Charges (PLC). These charges could apply to flats with desirable views, those located above a certain floor, or units boasting other exceptional characteristics. While there are numerous flats available in Mumbai for sale, they are not created equal, and you may find it worthwhile to pay a premium for the property that aligns with your preferences.

By keeping the aforementioned charges in mind as you establish your budget for purchasing your dream house, you can avoid any unexpected financial surprises along the way. Being well-prepared and informed ensures a smoother and more transparent property acquisition process, enabling you to fully enjoy the fruits of your investment in the vibrant city of Mumbai.

Also read: Why Every Home Needs Home Insurance

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