When an individual is looking to buy property, the state government levies a certain fee on the transfer of property ownership. This particular fee is known as the stamp duty. After the individual pays the stamp duty, a receipt of acknowledgement for the stamp duty payment is given to the buyer. This receipt is very important as it acts as proof of the property’s legal ownership. After the buyer pays off the stamp duty and registration charges along with completing the sale agreement formalities, they would then be considered the rightful owner of the property.
Homebuyers should also be aware of the fact that stamp duty is also applied on conveyance deeds, sale deeds, and power of attorney papers. Do note that the inclusion of this fee will also depend on the state in which the buyer is purchasing the property. The stamp duty generally ranges between 2%-7%, depending on the particular state and value of the property.
Stamp duty is a fee that is charged additionally along with the property price. A lot of people do not know this, but even if there is a slight change in the stamp duty fee, this could have a significant influence on the total cost of the property purchase. It is also important to focus on the registration charges, which differ from the stamp duty fee. In Maharashtra, the registration charges are set at Rs 30,000 for properties that are valued above Rs 30 lakh.
Paying stamp duty is mandatory, irrespective of whether an individual is planning on buying a property that is under construction, just completed, or is a re-sale. The stamp duty is paid based on either the ready reckoner rate set by the state government or the agreement value of the property. The ready reckoner rate is set based on multiple factors such as the property’s type, facilities, location, etc. Homebuyers would also have to incur the cost of GST in case the property is under construction. It is advisable to use a stamp duty calculator that will help in understanding the stamp duty that one would have to pay while purchasing a property.
An individual can pay stamp duty either online or offline. For the offline method, all that a borrower must do is to visit an authorised seller in order to purchase physical stamp papers that mention all the details of the property agreement. The individual can also get in touch with an authorised franking agent who will stamp their property documents. This will be proof of the stamp duty payment being made. For those wishing to complete this payment online, they can visit the SHCIL website (Stock Holding Corporation of India) and clear the stamp duty fee. Once the payment is completed, an e-stamp certificate will be sent to the buyer.
It is very important to know that it is not common practice for financial institutions to cover stamp duty expenses while offering a housing loan. This means that the borrower will have to take care of the stamp duty fee from their own pocket.