Much has been written about the ways and means of negotiating a property and the units of measurement used to measure land. Now, let’s look at the subsequent requirements following a purchase – Registration. Registering a property is a state mandated procedure which is legally binding. So when you are planning to buy a property, remember that the final price quoted by the seller is not the final price. Predominantly, a few lakhs get added to the price quoted by the seller which includes stamp duty, registration charges, cess, and surcharges. These charges easily resort to around 7 to 10% of the total market value of the property; in some cases even more. A part of this goes as stamp duty and the other part of the percentage is registration fee.
SO WHAT IS STAMP DUTY?
Stamp duty is a charge levied on the buyer by the state government as per the Section 3 of the Indian Stamp Act, 1899. It is levied at the time of the registration of the property and it varies from one state to another.
While registering a document ensures that the property is your name, stamp duty acts as a validation check point for the registered document. It acts as a legal document to prove the transfer of the ownership title to the buyer. And registration and stamp duty go hand in hand where one cannot function without the other – meaning, the ownership is not legal unless the buyer has completed the stamp duty and the registration formalities.
Stamp Duty and Registration Charges in Different Cities
STAMP DUTY CHARGES
6.5% OF MV OF PROPERTY
4%-6% OF MV OF PROPERTY
6% OF MV OF PROPERTY
7% OF TOTAL MV OF PROPERTY
6%-7% OF TOTAL MV OF PROPERTY
6% OF MV OF PROPERTY
FACTORS THAT DETERMINE STAMP DUTY CHARGES
A lot of factors come into play when you determining the registration charges for a property! Here are some of them listed below:
1) AGE OF THE PROPERTY
As stamp duties are calculated on the market value of a property, old building attract less charges while new buildings are levied with heavy stamp duties.
2) AGE OF THE OWNER
Senior citizens across all states have a subsidized stamp duty charge. So the age of the owner plays a key role in determining the charge.
3) GENDER OF THE OWNER
Women in our country get some discounts on stamp duty charges so the gender plays a major role in determining the charges.
Also there are other key determinants like:
Buildings in the urban areas have a high market value hence will attract a greater rate of stamp duty; also the purpose of the building whether commercial or educational has a different rate each! And based on the amenities available inside the building, different state governments charge different rates.
HOW IS STAMP DUTY CHARGES CALCULATED?
There are countless websites available online which can be used to calculate the stamp duty charges. You just need to enter the essential details and click ‘Calculate’. Cess and surcharges will get added automatically so the end result will the stamp duty charge you have to pay.
If you’re unable to find an online calculator, you can walk into any of the nearby property registrar offices and they will tell you.
Once you pay the stamp duty, the document has to be registered under the Indian Registration Act with a sub-registrar. This registrar should be of the jurisdiction where the property is situated if the transaction involves property purchase.
The basic purpose of registration is to record the execution of the document. Only when you register the document, it becomes legal and the ownership, if any, is transferred to the right owner.
For more details on stamp duty charges, walk into the nearby property registrar office or talk to a registered property consultant today.