So you've finalized a flat that you want to buy after thorough research and consideration. The next important thing to take care of is the pricing. Understand all kinds of costs involved in the whole transaction before finalizing the deal. This article covers all kinds of fixed and recurring costs that will help you make an informed decision. Watch out for Hidden Costs The final cost of a house usually involves a lot more than what it appears to be. Besides the base price, always factor in the additional costs associated with the buying the house. More often than not, buyers consider and budget only the base price and ignore additional costs that are substantial. The costs incurred while purchasing an apartment can broadly be divided into two categories: Fixed costs and Recurring costs. Fixed Costs

1. External Development Charges (EDC): EDC is levied by the developer and includes installation and maintenance of street lights, roads, sewerage, water supply etc. EDC can add up to 10 percent of the base cost.
2. Infrastructure Development Charges (IDC): The Government levies IDC on the builder which may be passed on to the consumer. Hence, it is important to budget for IDC.
3. Preferential Location Charges (PLC): PLC is a premium charge that the developer levies on the flat when he offers the consumer a housing unit with some advantages over others in terms of location. For example, the apartment may have a good lake facing view from the balcony or it may have better flooring. PLC is generally a percentage of the base price and varies as per project, quality, alignment of flat, size, developer etc.
4. Car Parking Charges: Although it is still a moot point whether the developer can legally charge for parking, these charges have now become a common practice among developers. You might have to pay Rs. 50,000 – Rs 1 Lakh based on whether it is an open or covered parking.
5. Club Membership/Society transfer charges: Club memberships in the society also add up to a considerable amount in the cost of buying a house.

Recurring Costs

• Maintenance Charges: It could be levied on the owners on a monthly, quarterly or yearly basis, for maintenance of roads, lawns, street lights and other common facilities of the society. It may also include the charges for water and electricity backups.
• Security Charges: This is charged to aid the deployment of security personnel and maintenance of security systems like CCTVs and intercom. These charges may be levied on a monthly basis.

Other General Charges and Transaction Costs

1. Stamp Duty and Registration Charges: The stamp duty varies from state to state and may also differ for males and females in some of the states. For example, Mumbai has a flat stamp duty of 6 percent, while in Delhi, stamp duty for males is 6 percent and for females is 4 percent. The registration charge is 1 percent in both the regions.
2. Registration Fee: In addition to the stamp duty and registration charges, there may be a registration fee (1-2% of property cost) to be paid to the court and expenses related to broker, lawyer, and notary.
3. Service Tax: The service tax (only for flats) is calculated as 12.36% on 25% of gross value of the property. The effective rate comes as 2.575 per cent.
4. VAT (Value Added Tax) on Property: VAT in the case of realty transactions is generally paid for under construction properties and may vary from 3-5 in different states. VAT is not payable if a fully constructed flat has been sold to the buyer.