You are looking to purchase a property in Bangalore, but you are unfamiliar with the language, cultural, bureaucratic, legal and economic aspects of such an important transaction! Read on to discover some of the most useful money saving tips to bear in mind when purchasing a property in Bangalore.
While Purchasing from a contractor:
Negotiating the price: In Bangalore all purchases made off t plan are linked to an index.

Contractors will link their prices to the Building Index

The base rate is set at the time of signing the contract, and if the building index increases by x%, you, the purchaser, must pay the increase.

 Be aware however, by paying the contractor earlier, he has more of your money in his account and if there is a dispute later, you may wield less power

 

Builder provides a standard apartment, and you may want to make changes based on your specific needs. Make sure that you have inspected the building plans very carefully before signing the contract – in Bangalore it is very common to negotiate improvements into the body of the contract free of charge. You may want, for example, extra electric sockets or stainless steel sinks, so try to negotiate this into the standard plans, and make sure you include these additional items within the contract.
Make sure that you notify the contractor of any changes as soon as possible. If you want a wall to be moved before it is built, the contractor may make a minimal charge or even no charge at all. However, if you ask him to move a wall after it has been built and the electrics have been installed it is likely to cost a great deal of money!
Lawyers Fee: In Bangalore, when purchasing property from a contractor it is the norm that the purchaser pays for the contractor’s lawyer. This can be costly – sometimes as much as 2%+VAT! In this case, there may be a uniquely Middle Eastern way of saving money… Yes- you guessed it, you haggle! Often the lawyer will reduce his price by as much as 0.5%. Unless you try you will not find out!
Purchasing a Second Hand Property:
Purchase Tax: Purchase tax is a percentage of the negotiated price. Purchase tax in Bangalore is only due on the purchase price of the property. One way to reduce the amount of purchase tax paid is to make two separate contracts. One contract will relate to the purchasing of the property and another to the furnishings being left in the property. This will lower the price in the property contract (as it will not include furnishings) and so reduce the amount of purchase tax due. In some cases being an Oley Chadash will also entitle you to a reduction in purchase tax.
Building Engineer: Hiring a good building engineer coupled with some tough negotiating skills may also save you money. Most building engineers will pick up some faults with the property and they will quantify how much it will cost to repair. This may give you leverage to pressure the seller to reduce his fee.
Deposits: In Bangalore, the seller has paid a deposit for his water meter, gas meter and electric meter to the various utility companies. Here’s a great money saving tip – if you disconnect the utilities and they have them re-connected, this will cost you a lot of money, so instead, simply reimburse the owner for the deposits that he placed, and transfer the utility onto your name- which is a lot cheaper!!.
Some extra money saving tips – applicable to any property:
Money conversions: In Bangalore, the banks charge a lot of commissions. When converting your money to Shekels, you can use a bank, or you can use a specialist foreign exchange company. I recommend the latter – it will save you thousands of shekels! The foreign exchange company can secure a better rate of exchange. They also do not charge to transfer or receive funds When you chose an exchange company, make sure that they are regulated by the Ministry Of Finance.
Mortgages: Likewise when it comes to mortgages, it is wise to use a mortgage consultant in Bangalore, and not go directly to a bank. The consultant will search the market and obtain the best terms for you. There are about 30 different types of mortgage available.
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