What Buying a Second Home Really Costs
What a Second Home Costs — The Complete Indian Guide
Buying a second home is often seen as the ultimate lifestyle upgrade — a peaceful escape from the city, a legacy investment, and sometimes, a potential income source. But before you sign that agreement, it’s essential to look beyond the sticker price.
At Gupta & Sen, we’ve worked with dozens of buyers who dream of owning second homes in scenic places close to Mumbai like Alibaug, Karjat, Lonavala, Khandala, and Khopoli. Many are surprised to discover that the true cost of ownership goes far beyond the sale price.
This guide will help you understand what a second home really costs — from taxes and registration to maintenance, utilities, and hidden lifestyle expenses — all contextualised for Indian buyers today.
1. The Purchase Price: The Obvious, Yet Misleading Starting Point
When people talk about buying a second home, the first figure they mention is the “price.” But the price you see quoted by the developer is only the beginning.
Take, for instance, a recent villa sold by Gupta & Sen at Kensington Villas, Alibaug — a premium 5-bungalow project known as The Mango Sanctuary. The Agreement for Sale pegs the cost of one bungalow at ₹7.08 crore for 361.91 sq. m. (approx. 3,895 sq. ft.) of carpet area on a 9.7 Acre (10,400 sq. ft.) plot.
At first glance, that sounds straightforward — until you factor in the rest.
2. Stamp Duty, Registration & Legal Costs
Every property transaction in India attracts stamp duty and registration charges, which vary by state.
In Maharashtra:
- Stamp Duty: 6% (5% State + 1% Local Body Tax)
- Registration: 1% of the property value or ₹30,000 (whichever is higher)
- Legal Documentation: ₹25,000–₹50,000 (depending on the complexity)
3. Goods & Services Tax (GST)
If you buy under-construction property, you must pay 5% GST on the total sale value. That’s an additional ₹35 lakh on a ₹7 crore property.
For ready-to-move-in villas (where an Occupancy Certificate has been issued), GST does not apply — a key advantage when choosing between ready and under-construction second homes.
4. Infrastructure, Development & Statutory Fees
In most gated second-home projects, developers pass on a share of external and internal development costs, including:
- Road and drainage infrastructure
- Water and electricity connections
- Sewage treatment or water recycling plants
- Common security systems
In the Alibaug villa agreement, these were not included in the sale price — the buyer agreed to bear additional costs, taxes, premiums, and any future government levies. It’s common to see a 1–2% additional charge on top of the purchase price for such infrastructure and statutory fees.
5. Real Estate Agency Brokerage Fees
Whether you are purchasing a new construction or a resale villa, professional real estate brokerage fees apply in India.
Standard Brokerage in the Indian Market
- 1% to 2% of the agreement value
For a ₹7 crore second home:
- Brokerage = ₹7 lakh to ₹14 lakh
This fee is payable at the time of completing the transaction.
Why This Cost Matters
A reputable real estate consultancy like Gupta & Sen adds significant value:
- Expert negotiation
- Due diligence supervision
- Legal coordination
- Access to verified, premium listings
- Professional handling of complex high-value transactions
Given the legal and financial scale of second-home transactions, brokerage fees are a critical and justified cost in the overall budget.
6. Fit-Outs, Furnishings & Interiors
Most second-home buyers envision moving into a finished space — but that requires significant additional investment.
Even a semi-furnished villa in Alibaug or Karjat typically needs:
- Interior design and furniture: ₹20–₹40 lakh (for a 3 BHK – 4 BHK)
- Landscaping and outdoor setup: ₹5–₹15 lakh
- Pool maintenance or upgrades: ₹2–₹5 lakh
- White goods & appliances: ₹10–₹15 lakh
Together, this can easily total ₹40 – 70 lakh — or around 10% of the property’s price — depending on your aesthetic choices and lifestyle expectations.
7. Annual Maintenance & CAM (Common Area Maintenance)
Your second home doesn’t maintain itself — and that’s where Common Area Maintenance (CAM) agreements come in.
From the Alibaug villa CAM document, owners are required to:
- Pay service charges at cost + 20%, billed quarterly in advance
- Bear all utility and maintenance charges for common facilities
- Share in capital expenses (major repairs, replacements) on a pro-rata basis
The typical CAM inclusions:
- 24×7 security and CCTV surveillance
- Common garden upkeep and landscaping
- Power backup (diesel, maintenance, replacements)
- Water treatment plant, borewell management, or tanker supply
- Common road and play area upkeep
For a luxury villa community, expect ₹1.5 – 3 lakh per year in CAM fees, rising with inflation. If you delay payment, interest at 18% per annum may apply — a common clause in such agreements.
8. Private Maintenance & Running Costs
Beyond common facilities, every homeowner is responsible for the running and maintenance of their individual villa.
For instance:
- Electricity: ₹20,000 – ₹40,000 per month (depending on air-conditioning and pool usage)
- Water (tanker backup): ₹10,000–₹15,000 per month
- Housekeeping & gardening staff: ₹25,000–₹50,000 per month
- Pool and pest control: ₹5,000–₹10,000 per month
- Internet, cable, and security systems: ₹3,000–₹5,000 per month
Together, that’s about ₹75,000–₹1.2 lakh per month, or ₹9–12 lakh annually in recurring running costs — assuming the home is used occasionally. If you plan to rent it out or live year-round, these numbers rise further.
9. Property Tax & Insurance
Municipal property tax in smaller towns like Alibaug or Karjat is typically modest compared to Mumbai, averaging around ₹1–2 per sq. ft. annually of built-up area. Insurance, however, is non-negotiable. A comprehensive home insurance policy — covering structure, interiors, and liabilities — costs about ₹20,000–₹40,000 per year for luxury properties.
Given India’s coastal and monsoon vulnerability, this is a smart safeguard against fire, flooding, or cyclone-related damage.
10. Utilities, Licenses & Government Fees
Additional outlays often catch new buyers off guard.
These include:
- Electricity connection deposits and load extensions (₹2–₹5 lakh)
- Water connection and meter fees (₹50,000–₹1 lakh)
- Sewerage, telecommunication, and gas connections (₹1–₹2 lakh)
- TDS (Tax Deducted at Source) at 1% of transaction value, applicable above ₹50 lakh
Over time, even routine items like repaints (every 5 years, as per the Alibaug agreement) or upgrading CCTV systems add to ownership costs.
11. Cost of Finance (If You’re Taking a Loan)
Second homes attract slightly higher loan rates and stricter eligibility. While the Reserve Bank allows up to 75–80% funding, most banks charge:
- Interest rates: 9–10.5% per annum
- Processing fees: 0.25–1% of loan amount
On a ₹5 crore loan, that’s nearly ₹50 lakh in interest over 5 years, assuming part prepayment.
Many of Gupta & Sen’s clients prefer using capital gains from previous property sales or other investments instead of over-leveraging. The key is to maintain liquidity for maintenance and upgrades — not just the purchase.
12. Second-Home Rental Management Costs
If you plan to rent out your property as a weekend home, know that most projects restrict independent short-term rentals unless managed through the project’s authorized operator. This is because the developer who has sold you the property also wants a part of the rental income in the future as part of the developer’s long term regular income generating strategy.
In the Alibaug project, owners are forbidden from listing on Airbnb or Booking.com without offering the first right of refusal to the official management company. Violations can attract penalties up to ₹25,000 per night plus 18% GST. This can be a deal breaker for some second home buyers. So ensure that you speak to the developer first about this should you want to be free to list your new second home on other portals like Stayvista or Airbnb.
Should you opt for managed rentals, expect:
- Revenue share: 20–30% retained by the management operator
- Upkeep costs: periodic cleaning, linen replacement, and utilities
- Income tax: Rental income is taxed under “Income from House Property”
It’s crucial to weigh potential rental yield (3–5% annually) against your recurring costs and the wear and tear of frequent guest usage.
13. Depreciation, Repairs & Long-Term Upkeep
Every home ages — especially coastal or hillside properties subject to humidity and weather extremes.
Budget annually for:
- Exterior repaint and waterproofing: ₹5–10 lakh every 5 years
- Appliance replacements and service contracts: ₹2–5 lakh every 3 years
- Roof, pool, and plumbing overhauls: ₹5–8 lakh every 7–10 years
A well-maintained villa retains resale value, while neglected homes can lose up to 20–25% of their potential price due to deterioration.
14. Management & Caretaking When You’re Away
If your second home is unoccupied for long periods, appointing a caretaker or management service is vital.
Typical options include:
- Resident caretaker couple: ₹25,000–₹40,000/month
- Professional property management firms: ₹1–2 lakh/month (for luxury villas)
At Gupta & Sen, we often advise clients to factor this into their annual budgeting — especially for homes in destinations like Khopoli, Karjat, Goa or Lonavala, where humidity and vegetation require constant attention.
15. The Lifestyle Premium
Beyond economics, there’s an intangible cost: convenience.
Maintaining a second home means:
- More coordination — with staff, service providers, and repair vendors.
- More travel time and logistics.
- Higher responsibility — ensuring security, compliance, and upkeep.
But for most buyers, the return on this lifestyle cost is unmatched: privacy, space, and peace. That’s why the Alibaug, Goa and Karjat markets continue to thrive despite the overheads — because for many, the emotional yield outweighs the financial outlay.
16. The Total Picture: What You’ll Really Spend
For a ₹7 crore villa:
| Cost Component | Amount (₹) |
|---|---|
| Base Price | 7,08,00,000 |
| Stamp Duty & Registration | 45,00,000 |
| Brokerage Fees (1–2%) | 7,00,000 – 14,00,000 |
| GST (if applicable) | 35,00,000 |
| Interiors & Furnishing | 50,00,000 |
| Infrastructure/Development | 10,00,000 |
| Legal & Professional | 5,00,000 |
| CAM (Annual) | 2,00,000 |
| Private Maintenance (Annual) | 10,00,000 |
| Insurance & Property Tax | 1,00,000 |
| Annual Contingencies | 5,00,000 |
Year 1 All-In Cost: ~₹8.7–8.8 crore
Annual Recurring Cost: ₹12–14 lakh
That’s nearly 20% above the sticker price, just to acquire and sustain ownership.
Final Thoughts: The Smart Way to Plan for a Second Home
Buying a second home is one of life’s most fulfilling investments — but also one of its most misunderstood.
A transparent understanding of total costs helps you:
- Buy within a safe financial zone
- Avoid liquidity stress
- Make ownership a pleasure, not a burden
At Gupta & Sen, we guide clients through every stage — cost analysis, due diligence, transaction structuring, post-possession support — to ensure their second home is a joyful asset, not an unexpected expense.
Whether it’s a beach villa in Alibaug, a hill home in Lonavala, or a nature retreat in Karjat, we ensure you buy smart, safe, and with confidence.
About Gupta & Sen
Gupta & Sen is a Mumbai-based boutique luxury real estate consultancy specializing in high-value residential and second-home properties across India. Our expert team advises on transactions, valuations, and investments for discerning buyers seeking quality, transparency, and lifestyle-driven returns.
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