Stamp Duty meaning, Registration, Rates & Charges

Stamp duty is a mandatory payment every investor must make before buying a property. But what does it mean?

Real estate is an expensive investment. Besides the actual cost of the property, investors must also make other payments, including stamp duty and registration charges. Both are unavoidable expenses every investor must bear while purchasing property. This article will help you understand both concepts.

What is stamp duty?

The Indian Government levies stamp duty on some legal papers, such as sale transfers, donation deeds, transportation deeds, and mortgage deeds. It aids in transferring ownership from the vendor to the purchaser.

The ready reckoner rate is the state government's baseline rate for a property. The ready reckoner rate is influenced by many factors, such as market value facilities, locality, and the features of the property.

Stamp duty and registration charges

While stamp duty is a price that states charge for the service of recording a contract or deed in the government's records, the registration charge is a fee that users pay for the convenience of recording a contract or document in the government's archives. The government administers a document registry for a charge.

To some extent, it gives sanctity to documents that might not otherwise be legally enforceable. The Indian Registration Act of 1908 regulates how the papers should be registered.

Stamp duty rates

Stamp duty rates vary from 4% to 10% in different Indian states. Registration charges, meanwhile, are uniformly 1% across states. A flat cost is also charged as a real estate registration fee in some regions. Haryana and Maharashtra are two such states which levy a flat rate.

Stamp duty calculator

You can calculate the rate you will pay as stamp duty by using the online stamp duty calculator. Metra Trust’s stamp duty calculator is a useful tool to find out how much you will have to shell out in advance. Simply enter the required details and the amount will be visible on the screen.

Stamp duty online payment

Many states have implemented an online payment system to make stamp duty payments and property registration easier. Customers can pay for stamps by going to the Stock Holding Corporation of India Limited website and purchasing the requisite stamps. Stamp duty can also be paid through the purchase of physical stamp sheets or franking.

Stamp duty on property purchased with home loan

If you use a home loan to purchase a property, you must pay stamp duty. You must deposit the property paperwork with your bank, along with an acknowledgement you are submitting these documents voluntarily to get the home loan. This process, designated as the memorandum of deposition of property title, is documented and stamp duty is levied at 0.1%–0.2% of the home loan amount.

It is vital you know the stamp duty and registration charges, as you cannot purchase a property without them. While the stamp duty and registration charges are high across most states, they should not deter you from buying the property of your dreams. You can always avail of a home loan to finance a real estate investment. Metra Trust is one of the best places to get a home loan.

Metra Trust offers affordable home loan interest rates to help you buy a house without exposing your finances. Getting a loan from Metra Trust is also easier than ever.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject Metra Trust or its affiliates to any licensing or registration requirements. Metra Trust shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.