Apartment Maintenance and Sinking Fund: What to Check Before You Buy

A Bengaluru buyer compared two similar flats and chose the cheaper one, only to find its monthly maintenance was nearly double the other's once he moved in. The building had a large clubhouse, extensive landscaping and a lift heavy tower, all of which cost money to run every month, for years. The purchase price had grabbed his attention, but the recurring maintenance, which he pays for as long as he owns the flat, was the number he had never asked about. Over a decade, that gap added up to a serious sum.

The short answer. When you buy an apartment you take on recurring maintenance charges, usually calculated on the flat's area, plus contributions to a sinking fund for major future repairs, and often a one time corpus fund at possession. Where the monthly maintenance per flat exceeds seven thousand five hundred rupees and the society's annual collection exceeds twenty lakh rupees, GST at eighteen percent applies on the maintenance. The trade off buyers overlook: a lavish, amenity heavy project carries higher lifelong maintenance, so factor the monthly cost and the funds into your budget, not just the purchase price.

What are maintenance charges, sinking fund and corpus?

These are three different pockets of money that keep a building running and cared for. Maintenance charges are the recurring monthly payments that cover day to day upkeep: security, housekeeping, common area electricity, water, lift running and the like. The sinking fund is a reserve built up over time for big, infrequent expenses such as repainting the building, replacing a lift or major structural repairs. The corpus fund is usually a one time contribution, often collected by the builder around possession, that acts as an emergency reserve for the society.

For a buyer, the distinction matters because they behave differently. Maintenance is a steady monthly cost you will pay for as long as you own the flat. The sinking fund is a smaller regular contribution towards a future you will eventually benefit from. The corpus is a lump sum you may pay once at the start. Knowing which is which lets you budget properly and ask the right questions about each.

How are maintenance charges calculated?

Maintenance charges are most commonly calculated on the area of your flat, typically as a rate per square foot per month, so a larger flat pays more. Some societies instead charge a flat equal amount per unit, and many use a mix, with area based charges for some heads and equal sharing for others. The total depends heavily on the amenities: a project with a big clubhouse, pools, landscaping and multiple lifts simply costs more to run than a plain building.

This is why two flats at a similar price can carry very different monthly costs. Before you buy, ask for the current maintenance rate and an idea of how it has moved over recent years, because maintenance tends to rise over time as the building ages and costs increase. A high monthly charge is not necessarily bad if the amenities justify it, but it must fit your budget, since you pay it every month regardless of the purchase price.

When does GST apply to maintenance charges?

GST applies to apartment maintenance only when two thresholds are both crossed. The monthly maintenance per flat must exceed seven thousand five hundred rupees, and the society's annual collection must exceed twenty lakh rupees. When both conditions are met, GST at eighteen percent applies on the maintenance amount. If either threshold is not crossed, the maintenance is not subject to GST, so a modest society below the turnover limit, or a flat with maintenance under the per flat limit, does not attract it.

The per flat exemption is generally applied separately to each residential apartment a member owns, rather than being combined across several flats. For a buyer, the practical point is to ask whether GST is being charged on the maintenance and to factor it into the monthly cost where it applies, because eighteen percent on a large maintenance bill is a meaningful addition. Confirm the position with the society rather than assuming, since it turns on both thresholds.

What is the sinking fund and corpus, and who holds them?

The sinking fund is money the society sets aside regularly so that when a major expense arrives, such as a lift replacement or a full repaint, it does not have to levy a sudden heavy charge on residents. It is usually collected as a small addition to the monthly maintenance and held by the society for the long term. A well funded sinking fund is a sign of a well run society, because it means big repairs will not come as a financial shock.

The corpus fund is typically a larger one time contribution collected around possession, often by the builder, and handed over to the society as an emergency reserve. As a buyer you should ask how much corpus is being collected and whether it has been, or will be, transferred to the residents association. For a resale flat, ask whether the corpus and sinking fund are healthy, since you are effectively inheriting the society's financial position along with the flat.

What should a buyer check before buying?

Check the current monthly maintenance and whether GST applies, the sinking fund contribution, and the corpus expected at possession, so you know the full recurring and one time costs. For a resale, obtain a no dues certificate from the society confirming the previous owner has cleared maintenance, sinking fund and any special levies, because unpaid dues can follow the flat to you. Read how maintenance is set and revised in the society documents and your agreement.

These commitments usually sit in the builder buyer agreement and the society bye laws, so read them rather than relying on verbal figures. Our guide to builder buyer agreement clauses explains where maintenance and corpus terms appear, and our note on the occupancy certificate versus completion certificate covers the handover stage when these funds are first collected.

What recurring costs should you budget for?

Budget for the monthly maintenance, any GST on it, the periodic sinking fund contribution and the one time corpus, alongside your EMI and property tax. Treat these as part of the true cost of living in the flat, not as an afterthought, because together they can be a significant monthly outgo in an amenity rich project. The table below sets out the main charges and what to watch.

Whether the flat is compact or a larger home such as one at Embassy Eden, the recurring costs deserve the same scrutiny as the price.

What is the takeaway?

The takeaway is that the sticker price is only part of what an apartment costs you. The maintenance, GST where it applies, sinking fund and corpus together shape what you pay to live there month after month and year after year. A buyer who asks for these numbers upfront, and reads the agreement and bye laws, avoids the unpleasant surprise of a monthly bill far higher than expected.

So make the recurring costs a specific question before you buy, and get a no dues confirmation for a resale. This guide explains how the charges work and when GST applies; fitting them into your own budget is the decision that keeps the home comfortable rather than a strain.

Seven step maintenance and fund checklist

1. Ask for the current monthly maintenance charge and how it is calculated.
2. Check whether GST at eighteen percent applies, which needs both thresholds crossed.
3. Ask about the sinking fund contribution and how healthy the fund is.
4. Confirm the corpus fund expected at possession and whether it goes to the society.
5. For a resale, get a society no dues certificate covering all charges.
6. Read the maintenance and corpus terms in the agreement and society bye laws.
7. Add these recurring and one time costs to your budget alongside the EMI and tax.

Do this before you commit, not after you move in. The purchase price is a one time number, but maintenance and the funds are what you live with for years. Knowing them in advance is the difference between a home that fits your budget and one that quietly stretches it.

When is GST charged on apartment maintenance?

GST at eighteen percent applies to apartment maintenance only when both thresholds are crossed: the monthly maintenance per flat exceeds seven thousand five hundred rupees and the society's annual collection exceeds twenty lakh rupees. If either is not crossed, no GST applies. The per flat exemption is generally applied separately to each apartment a member owns.

What is the difference between a sinking fund and a corpus fund?

A sinking fund is money the society collects regularly to pay for major future repairs such as repainting or replacing a lift. A corpus fund is usually a one time contribution collected around possession, often by the builder, as an emergency reserve. The sinking fund builds over time, while the corpus is a lump sum at the start.

Can unpaid maintenance dues become the new owner's problem?

Yes, unpaid maintenance and society dues can follow the flat, so a new owner may be pursued for arrears left by the previous owner. Before buying a resale flat, obtain a no dues certificate from the society confirming that maintenance, the sinking fund contribution and any special levies are all cleared, so you do not inherit someone else's outstanding bills.

How are apartment maintenance charges calculated?

Maintenance charges are most often calculated on the area of the flat, typically a rate per square foot per month, so larger flats pay more. Some societies charge a flat equal amount per unit, and many use a mix. The total depends heavily on the amenities, since more pools and lifts cost more to run.

Last updated 2026-09-08. PropNewz Team.