Prepare for 1% surcharge on Stamp Duty - Home Loan Stories

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Buying a real estate property can be quite bothersome, especially when it comes to registering it. The amount finalised between you and the seller is not the final price. There are extra charges that needs to be paid once you get it registered. These are Stamp Duty and registration charges which are required to be paid. A Stamp Duty is charged while transferring the title of a property from one person to another. It is a fee levied by the State Government on the documents you need to register your property. The Stamp Duty and Registration Charges are different for different states.

A stamp duty on home loan along with registration document acts as a legal document on proving the ownership of the property. There are a number of factors which determines your stamp duty charges. We have listed some of them below:

Age of the Property: This plays a crucial role in determining the stamp duty charges you will be required to pay. Usually old buildings attract less stamp duty charges and new buildings attract a higher charge
Age of the Owner: The age of the owner plays an important role in determining the charge as all state governments have subsidised stamp duty charges for senior citizens
Gender of the Owner: Like senior citizens, women in our country also get a discount on stamp duty charges if the property is registered in her name
Purpose: Commercial buildings attract a high stamp duty fee when compared to residential buildings
Location: If your property is situated in a municipal locality or an upscale urban area, be prepared to pay a high stamp duty. If your property is located in Panchayat limits or outskirts of the town, you will end up paying less to get it stamped

The Maharashtra state legislative assembly has approved an amendment to the Mumbai Municipal Corporation Act, 1888, proposing to levy a one per cent surcharge on stamp duty, on transfers of certain immovable properties. It would be levied on the sale, lease, mortgage and gift of real estate, within the purview of the Brihanmumbai Municipal Corporation (BMC). This endeavour is to finance the infrastructural works such as metros, mono rail, freeways and sea links. It will push up property stamp duty to 6% from the current 5%. As per the provisions of the bill, the additional surcharge will be levied on stamp duty on the sale, gift and usufructuary mortgage of immovable property. This is of vital importance when it comes to urban transport projects which are being undertaken.

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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.