Planning to Buy Your First Home? Know How Much Stamp Duty You’ll Have to Pay!

Building a home is a dream come true for many. From finding the right land to placing the last brick, the process is lengthy and often demands a lot from you. But one thing that a lot of homebuyers forget while buying land or property is the additional expenses that come with it, including stamp duty and registration charges. Including these in your budget can make sure you do not go overboard with your expenses.

Learn more about stamp duty and registration charges below to understand this better.

What is stamp duty?

Stamp duty is a tax that state governments place on legal documents and in this case, the registration documents. It is paid when a land or property’s ownership is transferred from one person to the other. This transfer can happen when you buy or sell a property.

Stamp duty is applicable all over India and it is considered one of the most important processes of land registration. Transfer of ownership is legally complete only when you have paid the stamp duty.

The state governments decide these and stamp duty varies from state to state. But it tends to be within the range of 5% to 12% in most states.

How is stamp duty calculated?

The stamp duty need not be same for everyone and there are some factors that affect your stamp duty such as:

• Age of the property – Newer properties tend to attract more stamp duty than older ones. This is to take into account the depreciation the property might have undergone over the years.
• Your age – Senior citizens are charged lower stamp duty than others. This is because there are subsidies in place to help senior citizens with their taxes.
• Your gender – The law also gives subsidies to women for stamp duty. This is to encourage land ownership amongst women.
• Type of property –If you have a commercial property, it will attract more charges than residential properties. But there is categorisation within residential properties too. For instance, multi-storied buildings tend to have more stamp duty than others.
• The locality of the property – The place where your property is located is also important. Properties in cities and municipalities attract more stamp duty than properties in villages. The stamp duty concession here is based on people’s affordability.

You can easily calculate stamp duty using a stamp duty calculator.

How to pay stamp duty?

You can pay stamp duty online and offline. The offline process is through non-judicial stamp papers. Here, stamp papers of equal value to the stamp price have to be bought from a registered vendor.

The online facility is easier but is limited to certain cities. This is done through the Stock Holding Corporation of India Limited (SHCIL) website. Once you pay the duty, you will receive an e-stamp certificate.

Paying and budgeting for stamp duty is important when buying your dream home. To budget properly, you can use a stamp duty calculator to compute stamp duty for your property transfer.

Thus, after reading everything about stamp duty & how to calculate it, you are now ready to buy your own dream house & avail a home loan to fund that easily