Property Registration Fees and Stamp Duty Charges

 

Hunting for the right property and finding the one that works for you is an arduous task, but it is only the beginning of your ownership process. After buying a property, you have to register it. So the price that you buy the property, let’s say - your house isn’t the final amount. More charges are added to that price as the stamp duty and registration charges.

To give you a practical financial tip for property registration, be prepared to lighten your bank accounts by up to 7% of the total market value of your purchased property as the stamp duty charges and around 1% as registration fee.

What Is Meant By Stamp Duty?

To understand stamp duty, you need to understand the concept of transfer of property title. In simple words, it means that the purchase of property involves the transfer of ‘title’ as the owner of the property. In order for this transfer to legally take place, you are supposed to pay the stamp duty charges. The state government levies these charges on the documents that are required for property registration.

Make sure you pay the full stamp duty charges to stay out of trouble.

Stamp Duty and Registration Charges in Different Cities

The exact charges to be paid vary from one city to another. These charges are all calculated as a percentage of the total market value of the property for which these are being paid. Here are a few examples for the major metro cities.

City

Stamp Duty Charges

Registration Charges

Bangalore

5%

1%

Delhi

4% if the owner is a woman

6% if the owner is a man

1% plus Rs.100 pasting charge

Chennai

7%

1%

Mumbai

4% for rural areas

5% for Municipal zone

1% or Rs.30,000 whichever is lesser.

Kolkata

5% for rural areas

6% for municipal areas.

 

1% (charged only when the value of the property in question exceeds rupees forty lakhs)

Factors that Determine Your Stamp Duty Charges

Let’s enumerate the factors that determine the stamp duty charges:

  • We have already explained that these charges are a percentage of the total market value of the property. Keeping that in mind, newer buildings will attract a higher charge than the older ones whose values have depreciated over time.

  • Age of the owner will be a factor if the state governments grant some subsidies on the charges for senior citizens.

  • Gender of the owner is also a factor if the state government decides to charge a different rate for men as compared to women.

  • The Use or purpose of the property: As a norm, commercial properties attract higher charges and restrictions compared to residential buildings owing to the need for amenities, advanced services and security.

  • In certain cities like Mumbai, the location in a posh, urban area can attract a higher stamp duty

  • The stamp duty charges are also influenced by the availability of amenities in a property, including a library, swimming pool, gym, community hall etc.

How do we compute Stamp Duty Charges?

Factoring in for the parameters mentioned above, the stamp duty charges are computed keeping in mind the total market value of the said property. It is likely that the Stamp Duty Ready Reckoner, a publication by the state government, is referred to in the process of establishing and computing the stamp duty charges.

Documents Required for Stamp Duty and Registration Charges

It is important to know what all documents are needed to make your property purchase legal and final, that is, pay the stamp duty and registration fees. Here’s a handy list:

  • Sale deed in the name of the seller and the title documents of the landowner

  • Tax receipts of the last 3 months and the latest bank statements in case of any outstanding loan amount

  • Registered development agreement (in case of Joint Development Property)

  • Power of attorney/s if any

  • A Copy of all registered previous agreements (in case of resale property)

  • RTC (Records of Rights and Tenancy Corps)

  • Certificate of encumbrance up to current date

  • Electricity bill

There are certain documents to be obtained from other stakeholders too. These may include a NOC from the Apartment Association where the property is located, or a sanctioned building plan, or an occupancy/Possession certificate from the builder, society registration and share certificates if this is a cooperative group housing society.

Procedure For Payment Of Stamp Duty And Registration Charges

Stamp duty charges can be paid in one of the 3 modes stated below:

Physical Stamp papers:

This is the classic way of property registration. You purchase the non-judicial stamp paper and get the details of the transaction typed on them. The amount of stamp duty to be paid determined the number of stamp papers you are required to obtain.

E-Stamping

As the name suggests, e-stamping is basically stamping done electronically, or online. The Stock Holding Corporation of India Limited keeps track of all the e-stamped papers. It makes the process easier and prevents counterfeiting.

Franking:

The third mode is franking, which is simply the process of an authorised franking agent putting a stamp on the document to confirm that you have paid the stamp duty. These agents (usually banks) have a franking machine that is used to lace the document with a special adhesive stamp. Franking charges are paid separately but are adjusted against the overall amount of stamp duty.

Registration Of Documents After Paying Stamp Duty

After you have paid the stamp duty, approach the sub-registrar of the area where the property is located. This is required under the Indian Registration Act for the purpose of record-keeping and legal verification.

The registration process involves a separate registration fee, the amount varies across states. You can refer to the rates in the table shared previously, which usually hover around 1% of the property’s market value.

Make sure you have all legal guidance and compliance while purchasing the property. It is an enormous financial responsibility, after all. To make your financial burden lighter, you can consider opting for a home loan. The Bajaj Finserv Home Loan on Finserv MARKETS offers high loan amounts of up to Rs. 3.5 crore along with perks like flexible repayment schedules, minimum home loan documents and zero foreclosure charges. If you need the money on an urgent basis, Finserv MARKETS has you covered! You can get loan approvals within minutes and have the money credited to your bank account in 24 hours! 

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