Stamp Duty & Registration Charges in Bangalore– A Quick Reckoner for House Buyers

Buying a house involves quite a lot of procedures and attracts a slew of statutory charges. It’s always better to know about these in advance, particularly about the latter, to avoid unpleasant surprises later on. Let’s get to know in detail about the stamp duty and registration charges applicable when buying a house in Bangalore.

Stamp duty and registration charges vary from state to state. More importantly, these charges make your house costlier. But what exactly are stamp duty and registration charges?

Section 3 of the Indian Stamp Act 1899 mandates the collection of these charges for the following reasons:
1) To authenticate the sale agreement.
2) To maintain a record of the property. It’s the state government that decides and fixes all charges that are collected towards stamp duty and registration.

Understanding the Gamut of Property Charges

Let us assume that Anita is buying a property worth Rs. 80 lakh in a posh locality in Bangalore. She will pay this sum to the seller and stamp duty, registration charges, surcharge (which is a tax levied on tax), and cess (a form of tax over and above the base tax liability of the taxpayer).

Anita will be charged stamp duty at 5.6% of the property cost, which will come up to Rs 4,48,000. Furthermore, the state government will levy registration charges at 1% of the property value, amounting to Rs 80,000.

Anita will also have to pay a cess charged at 10% of the stamp duty, amounting to Rs 44,800, and another surcharge calculated at 2% of the stamp duty, which will come up to Rs. 8960.

So, while Anita’s property will cost Rs.80 lakh, the additional charges will add up to Rs 5,81,760. Therefore, the total cost of her property value will be Rs 85,81,760 plus GST.

Stamp Duty & Registration Charges in Bangalore

Stamp duty and registration charges are mandatory fees you’ll pay when purchasing a property in Bangalore. These charges are levied by the Karnataka state government.

Registration Fee

The registration fee is a flat 1% of the property’s market value or the consideration amount (sale price), whichever is higher. This fee applies to all property purchases irrespective of the value.

Type of fee	Amount
Registration charge	1% of the property value
BBMP, BMRDA & village areas added cess	10% on stamp duty
BBMP & corporation added surcharges	2% on stamp duty
BMRDA & other surcharges	3% on stamp duty

Stamp Duty

Amount	Stamp Duty Charges
Less than Rs. 20 lakh	2%
Between Rs. 21 & Rs. 45 lakh	3%
Above Rs. 45 lakh	5%

Important Points to Note About Stamp Duty:

• These rates are applicable for first-time property registrations.
• There’s an additional cess of 10% on the stamp duty for properties above Rs. 35 lakh in urban areas.
• A surcharge of 2% (urban areas) or 3% (rural areas) is applied on the stamp duty.

Here’s an example to illustrate:

Let’s say you’re buying a flat in Bangalore for Rs. 50 lakh.

Stamp duty = Rs. 50 lakh * 5% = Rs. 2.5 lakh
Cess = Rs. 2.5 lakh * 10% = Rs. 0.25 lakh
Surcharge (assuming urban area) = Rs. 2.5 lakh * 2% = Rs. 0.05 lakh
Total stamp duty = Rs. 2.5 lakh + Rs. 0.25 lakh + Rs. 0.05 lakh = Rs. 2.8 lakh
Registration fee = Rs. 50 lakh * 1% = Rs. 0.5 lakh
Total charges = Stamp duty + Registration fee = Rs. 3.3 lakh

What Are The Parameters That Determine Stamp Duty Charges?

1. Age of The Property:

   Stamp duty is calculated based on the total value of the property you are purchasing. Since with age properties register depreciation, the age of the property has a prominent role to play in determining the stamp duty. Precisely the reason why older properties are easier on the pocket in terms of stamp duty when compared with brand new ones.

2. Buyer’s Age:

   If you are a senior citizen, you’ve reasons to cheer while buying a house. Yes, senior citizens pay a lesser amount in terms of stamp duty whereas people of younger age get no relaxation, and hence end up paying more.

3. Gender:

   Yet another factor that has a say in stamp duty is gender. In most states, Women, in comparison to men, pay a lesser stamp duty – roughly 2% lesser than men. However, in Bangalore the rate is same for both men and women.

4. Type Of Property:

   While there is no escape from stamp duty, residential properties have an advantage. They, in comparison with commercial properties, attract a lesser amount in terms of stamp duty.

5. Location:

   Buying a house in an urban area? Be prepared to pay a higher sum as stamp duty. However, if your plan is to buy a house in a semi-urban or rural area, you pay a lesser amount.

6. Amenities:

   Does the house you are planning to buy have a host of amenities? Well, shell out more towards stamp duty. It is simple – the more amenities you have, the more you pay. If your house has a swimming pool, library, gym or even elevators, you will have to spend more money on stamp duty.

   Must Read: Joint Co-Ownership of House Property Leads To Super Savings!

Benefits of Paying Property Charges

Property charges prove to be beneficial to home buyers as it ensures the following, under Section 3 of the Indian Stamp Act 1899:

1) The Property is Now Confirmed to You –

Upon paying the property registration charges, the property will legally be under your name. This crucial document authenticates the sale and makes you the new owner of that property.

2) Maintenance of Records –

You pay registration charges so that the Government keeps a record of the property. Without this, the previous owner will continue to be considered the owner of the property.

Understanding Stamp Duty Charges

Stamp Duty and Registration Charges ensure that the property is legally transferred to you. These charges are applicable on all kinds of properties, be it under-construction, newly completed, or re-sale.

Stamp Duty is payable on the value of the property or on the circle rate, whichever is higher. A circle rate is the price of property or land in a region that is published and regulated by the State Government. Stamp duty on registration of various instruments is imposed under the provisions of the Indian Stamp Act, 1899.

The Stamp Duty is called so because the stamp mark on the documents implies that the paper has assumed approval of the authorities and is now of legal significance. Stamp duty is also applicable on conveyance deeds, sale deeds, and power of attorney papers, but the charges vary in different states.

Must Read: 8 Points To Remember Before Buying An Apartment in Bangalore

Documents Required to Pay Stamp Duty

The buyer must submit a host of documents at the time of property registration, depending on the type of property. These are some important documents to be arranged at the time of registration:

1. Sale Agreement
2. Sale Deed
3. Khata Certificate
4. Photocopy of society share certificate and society registration certificate (in case of housing project)
5. NOC from the apartment association (in case of housing project)
6. Sanctioned building plan (under-construction property)
7. Builder-buyer agreement (under-construction property)
8. Possession letter from the builder (under-construction property)
9. Title documents of the landowner (in case of land purchase)
10. Records of Rights and Tenancy Corps or 7/12 extract (in case of land purchase)
11. Conversion order (in case of land purchase)
12. Tax paid receipts of the last 3 months
13. Registered development agreement (in case of joint development property)
14. Power of attorney/s (if applicable)
15. Joint development agreement between landowner and builder (in case of joint development property)
16. Copies of all registered agreements (in case of resale property)
17. Latest bank statements in case of any outstanding loan amount
18. Encumbrance certificate

Reason Behind Registration Charges

While Stamp Duty is paid to transfer the property to your name, Registration Charges are paid as per the Registration Act, 1908, to the Government to maintain it in its registry. This must be done within four months from the date of execution after the stamp duty is paid.

Unless the registration is complete, an entitlement of the property is invalid, and the property will still be under the previous owner’s name. Hence, it is important to register the property in the Sub Registrar of Assurances of the Jurisdiction’s office, where the property is purchased.

Must Visit: How to Calculate The Total Cost of Buying a Flat in Bangalore

How to Calculate the Registration Fee & Stamp Duty

These two factors are calculated based on different types of properties depending upon different city laws.

– Super built-up area is considered for calculation for multistorey apartments
– Charges on individual houses are calculated as per the constructed area
– For plots, the sq. ft. area of the plot is multiplied by the predominant guideline value of that area

Whether you are opting for a budget house or a luxury house, whether your choice of location is an urban setting or a rural area, knowing about the charges towards stamp duty helps you greatly. One of the most important advantages is that it lets you be in control, in terms of budget. Make sure that you do your research thoroughly before buying your house.

Must Visit: 2 BHK Flats in Bangalore for Sale

Final Thoughts:

Planning is Key: Knowing these charges upfront helps you factor them into your property budget.
Consider the Total Cost: Remember, the stamp duty and registration fee add a significant amount to the final property price.
Check for Exceptions: There may be exemptions or reduced rates for specific categories of buyers (like first-time homebuyers). Explore the government website for details.
Seek Professional Help: A real estate lawyer or tax consultant can provide guidance on calculating the exact charges for your specific case.

By understanding these final points, you can make informed financial decisions while buying property in Bangalore.

FAQs

1. What are stamp duty and registration charges?

Stamp duty: A tax levied by the government on the transfer of property. Registration fee: A fee paid to register the property ownership with the government.

2. How much is the stamp duty in Bangalore?

The stamp duty rate depends on the property's market value: 2% for properties below Rs. 20 lakh 3% for properties between Rs. 21 lakh and Rs. 45 lakh 5% for properties above Rs. 45 lakh

3. Are there any additional charges on stamp duty?

Yes, there are additional charges for properties above Rs. 35 lakh: Cess: 10% on the stamp duty (urban areas) Surcharge: 2% on the stamp duty (urban) or 3% (rural)

4. What is the registration fee in Bangalore?

The registration fee is a flat 1% of the property's market value or the consideration amount (whichever is higher).

5. How can I calculate the total stamp duty and registration charges?

Multiply the property value by the stamp duty rate and add any applicable cess and surcharge. Then, add 1% of the property value for the registration fee.

6. Are there any concessions on stamp duty or registration charges?

There may be reduced rates for specific categories like first-time homebuyers. Check the Karnataka government's Department of Stamps & Registration website for details.