What is stamp duty and why are you liable to pay?
Posted on: 10/Sep/2018 4:31:37 PM
So, you’re done with buying your dream home in Chennai - congratulations on your endeavor! But wait, there is still something that you got to do! Though you physically possess the property, you are not the 100% owner of it. To grab the ownership, you need to go through some legal procedures including payment of stamp duty, charges towards registration, etc.
There arises the query ‘what is stamp duty?’
Stamp duty is basically a form of property tax. This has to be paid entirely or in parts within stipulate time period.
It is similar to income tax or service tax. This stamp duty is to be paid to the government. It is officially the proof that proclaims that ‘you’ have legally purchased the respective property. Once stamp duty and charges towards Registration are paid, the entire legal formality of transforming the property to the buyer’s name gets over. On the other hand, when the procedure is not done, the buyer will have to bear with bulky penalties and face decline in property value.
The amount of Stamp duty differs from one state to the other. There are several determining factors for the same including market value, agreement value, whether the owner is a male or female, whether the property is residential or commercial, etc.
Upon paying the stamp duty, the next formality is to get it registered at the sub-registrar office where you had purchased the property. According to the Registration Act, 1908, you are compulsorily bound to get the property registered. If not registered, the property ownership will remain invalid.
The buyer has to bear with the registration charges and the registration is done in the name of the buyer. The charges towards the same is 1 percent of the total value of the property or a flat rate of Rs 30,000 – the highest of both will be applicable.
Here we provide you a brief on stamp duty and charges towards property registration in Chennai as of the present year (2018)
In urban and rural areas of Chennai, the stamp duty is 7 percent of the total property’s market value.
Likewise, the registration charges is 1 percent of the total property value.
