Seven Hidden Costs that You Will Come Across While Selling Your Property
Jul 17, 2017 Real Estate News
We are all aware of the hidden costs when you buy the property, but are you aware that there are hidden costs to selling the property as well.
We discuss all of them for you:
1. Foreclosure charges:
If you are planning to sell the property you are still paying the loan for you might decide to pre- repay the loan before starting the sale process. In this case, the bank may ask you to pay the ‘foreclosure charges’ for pre paying the loan.
2. It is taxable:
Selling a property in India is not free of taxes. You have to pay the tax on the profit you’ve made by selling it. If you sell the property within three years of its purchase then you have to pay the short term capital gain tax (STCG). In this case, the profit is combined with the income of the individual and taxed as per the IT slab rate.
If you sell the property after three years of buying it, then you have to pay the long term capital gain tax (LTCG). In this case, the individual has to pay 20 percent (plus surcharges and cess) after adjusting the gains for the inflation.
3. Commission:
When you decide to sell the property, you might hire an agent who can help you in finding the right buyer for the property, complete the paperwork for you, etc. He might also charge you a good fee for his service.
4. Transaction charges:
When you sell the property you pay transactional charges as well. It is similar to the charges an individual pays while buying a property. This would include stamp duty and registration charges. These charges are divided between the buyer and the seller.
5. Repair costs:
Before you put the house on market for selling, you will have to do some fixing and repairs so that you can fetch a good price for the property. A fresh coat of paint and pipe repairs are the main areas that a seller fixes for selling the property.
6. De cluttering:
When you decide to sell the house that was previously occupied by tenants, you will find some stuff that you don’t need and should be disposed of. It is better to get rid of them before you show the place to the potential buyer.
7. Moving out:
If you were living in the property that you wish to sell, you will have to hire a professional mover and packers to help you move your stuff. This will also cost you some money.
We discuss all of them for you:
1. Foreclosure charges:
If you are planning to sell the property you are still paying the loan for you might decide to pre- repay the loan before starting the sale process. In this case, the bank may ask you to pay the ‘foreclosure charges’ for pre paying the loan.
2. It is taxable:
Selling a property in India is not free of taxes. You have to pay the tax on the profit you’ve made by selling it. If you sell the property within three years of its purchase then you have to pay the short term capital gain tax (STCG). In this case, the profit is combined with the income of the individual and taxed as per the IT slab rate.
If you sell the property after three years of buying it, then you have to pay the long term capital gain tax (LTCG). In this case, the individual has to pay 20 percent (plus surcharges and cess) after adjusting the gains for the inflation.
3. Commission:
When you decide to sell the property, you might hire an agent who can help you in finding the right buyer for the property, complete the paperwork for you, etc. He might also charge you a good fee for his service.
4. Transaction charges:
When you sell the property you pay transactional charges as well. It is similar to the charges an individual pays while buying a property. This would include stamp duty and registration charges. These charges are divided between the buyer and the seller.
5. Repair costs:
Before you put the house on market for selling, you will have to do some fixing and repairs so that you can fetch a good price for the property. A fresh coat of paint and pipe repairs are the main areas that a seller fixes for selling the property.
6. De cluttering:
When you decide to sell the house that was previously occupied by tenants, you will find some stuff that you don’t need and should be disposed of. It is better to get rid of them before you show the place to the potential buyer.
7. Moving out:
If you were living in the property that you wish to sell, you will have to hire a professional mover and packers to help you move your stuff. This will also cost you some money.
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