News: Hidden Costs That Shrink Property Gains in India-09-06-2026

A flat bought under construction in Noida for Rs 1 crore in 2020 and sold five years later for Rs 1.8 crore looks like an Rs 80 lakh profit. An X user recently pointed out that the real figure is much lower once all costs are counted, reviving a debate on how buyers confuse appreciation with returns.

According to the post, the buyer paid around Rs 5 lakh in GST, Rs 7 lakh in stamp duty and registration charges and Rs 3.6 lakh in brokerage. Capital gains tax of about Rs 10 lakh at the time of sale reduced the gain further. The net profit came to roughly Rs 54 lakh over five years.

Financial experts describe this as a common "optical illusion" in real estate. Most buyers compare only purchase and sale prices and ignore the cost of ownership, which includes GST, stamp duty, registration, maintenance, repairs, brokerage, property tax and loan interest. They also seldom compare the returns with alternative investments, experts said.

Another example involves a 2BHK near Mumbai bought for Rs 1.15 crore and now possibly worth Rs 2.2-2.4 crore. After approximately Rs 18 lakh in stamp duty, registration and brokerage, nearly Rs 42 lakh in loan interest, around Rs 28 lakh in maintenance and about Rs 12 lakh in repairs and upgrades, total outflow exceeds Rs 2 crore.

Costs to factor in

Home loan: Experts advise looking at the full cost of borrowing. On a standard 20-year loan at 8.5%, repayments can be nearly double the principal. If the property appreciates at 5% a year while borrowing costs 8.5%, the owner may be losing wealth in real terms.

Maintenance: Monthly charges are often overlooked. A bill of Rs 5,000 a month may seem manageable but can weigh heavily during unemployment or after retirement, so buyers should assess the lifetime cost. GST applies to society maintenance when the monthly charge exceeds Rs 7,500 per member and the society’s annual turnover exceeds Rs 20 lakh. If both conditions are met, 18% GST is levied on the entire amount.

Stamp duty and registration: These vary by state, are paid upfront and are generally non-recoverable, raising the effective acquisition cost.

Hidden charges: Development charges, approval fees, infrastructure levies, clubhouse memberships, parking fees and other amenity-related costs can add 8-10% to the final price in some cities, experts say.

Beyond EMI eligibility

Financial planner Suresh Sadagopan said buyers should look past income and EMI eligibility before buying an expensive property. They should consider their commitments, whether they have or plan to have children, and whether they intend to settle in the city or might relocate for work. Buying a house, he said, is a lifestyle choice that "reduces flexibility", not only a financial decision.

He added that even when income is enough to service a loan, health and life insurance, travel, leisure spending and emergency savings can cut into what is available for EMIs. Buyers should therefore weigh the total cost of ownership and their long-term financial stability.

This report is based on user-generated content from social media; HT.com has not independently verified the claims and does not endorse them.