Thinking of investing in real estate? If yes, then you must be aware of the term ‘BSP.’ This is a term that is very important for you to understand. After all, what does BSP mean in real estate, and what is its importance in real estate?
In this blog post, we will tell you everything about BSP—its full form, its meaning, and how it works. We will also tell you how understanding BSP can help you make better real estate decisions.
Full form of BSP
The full form of BSP is Basic Selling Price. This is the basic price of any property, which does not include any additional charges. These charges are added later, which determines the final price of the property.
Why is it important to understand BSP?
When investing in real estate, it is very important to understand BSP, because:
- Transparency: BSP tells you the property’s actual price. Then you can be sure of what you are purchasing.
- Comparison: You can compare the BSP of properties from different developers. You’ll be able to find the finest offer this way.
- Budgeting: BSP helps you with your budgeting. You can know how much money you will have to spend and how much money you can save.
What is not included in BSP?
BSP does not include the following things:
- Stamp duty: This is a governmental fee that must be paid when purchasing real estate.
- Registration fee: When registering a property, this government charge must also be paid.
- Maintenance charge: This is a monthly or annual fee. It is paid to the society or developer to care for the property.
- Parking charge: If you avail yourself of the parking facility, then you will have to pay separately for it.
- Club membership charge: You will also be required to pay individually for any clubs that are part of the project.
- Preferential location charge: If you purchase a house in a desirable area, you could have to spend more.
BSP Example
A developer launched a project with a BSP of Rs 5000 per sq ft. If you buy a 1000 sq ft flat, you will pay Rs 50 lakh as the basic price. You will also be required to pay additional fees. Stamp duty, registration, upkeep, parking, club membership, and privileged placement costs are a few of these.
How to calculate BSP?
The BSP is calculated by multiplying the property’s total square footage by the BSP.. For example, if the total area of a property is 1200 sq ft and BSP is Rs 4000 per sq ft, then the basic price will be:
1200 sq ft x Rs 4000/sq ft = Rs 48 lakhs
What is the difference between BSP and allotment prices?
Often, people consider BSP and allotment price to be the same, but there is a lot of difference between the two. The allotment price includes BSP as well as all more charges. Hence, the allotment price is always higher than BSP.
Conclusion
Understanding BSP is very important for real estate investors. It helps you with transparency, comparison, and budgeting. Hence, whenever you go to buy a property, make sure to ask about and understand BSP.
FAQS
1. Does BSP include all charges?
No, BSP does not include all charges. You must pay stamp duty, registration charges, VAT/GST, and other fees. Do this as separate payments.
2. Is BSP the same for all properties?
No, BSP is not the same for all properties. It could change based on the property’s features, size, and location.
3. Can BSP change over time?
Yes, BSP can change over time. It may change with demand, supply, construction costs, and other factors.
4. Is BSP a good indicator of whether a property is expensive or cheap?
Yes, BSP is a good indicator of whether a property is expensive or cheap. But it is only an indicator. Also, consider location, size, and amenities.
5. Is there any scope for negotiation in BSP?
Yes, there may be room to bargain in BSP. This is true if demand is low or if you are buying a large quantity of property.