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30 OCT - 2018

What is Stamp Duty Rates & Charges on Property?

People are buying property rapidly as the rates of the land are increasing at a faster pace. Today Real Estate is one of the most successful businesses. The return that property can give is truly great. Earlier, people used to invest in mutual funds but today people are rapidly investing in properties. It is solely due to the fact that the demand is huge and the supply is less.

It becomes very important to understand all the legal and other mandatory charges that are incurred on the property buyer. When a property is bought, people account for the basic price of the land only but they do not account for several other taxes and charges that they may need to incur.

While buying a property, people generally estimate their budget on account of the basic price but later when they come to know the hidden charges involved, they get baffled. Stamp Duty is one such charge that people need to pay while buying property.

Stamp Duty

Stamp duty is the compulsory fee that must be paid by the property buyer to the State Government. This money gets accounted in the state treasury. However, this fee is a compulsory fee that must be paid by the property buyer to register the property on his name. Failing to pay it will result in non-registration.

The average fee is 5-7% and this rate may vary from state to state. In case of any type of forgery, these legal papers of registration will help you to claim your property. Under the Registration Act, 1908 and Indian Stamp Act, 1899, it is compulsory to pay this fee and registration charges.

Stamp duty varies from state to state and also depends upon if the property is new or old. This fee is charged upon the overall cost of the property that must be paid by the buyer. In the case of property exchange, both the buyer and the seller have to pay it equally.

This fee is paid just before the execution of the legal document or just after the day of execution of the document. Generally, stamp duty is paid within 30 days of settlement of property document. Execution of documents means registration of the property on the name of the buyer.

Any delay in the payment of stamp duty would result in its increment at a rate of 2% per month and can go up to 200% maximum. This penalty fee is said to be valid until 6 months from the date of purchase.

Impact of GST on Stamp Duty

Stamp Duty on property and Registration Charges remain unaffected from GST. These charges vary from state to state. In general, stamp duty is between 4-10% and registration charges are between 0.5-1%of property value.

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