Like almost all first-time homebuyers, you might have to deal with a daunting process that involves numerous financial obligations and paperwork. The more organised you are with the correct documents, the easier things will be for you before signing on the dotted line.
Legal paperwork, stamp duty, registration charges, and more are also associated with the home loan process. All this may put the homebuyers in a fix as they may want to know the stamp duty and registration charges while purchasing a property.
Here is a complete guide about stamp duty and registration charges, which will help you as a homebuyer, especially when you are about to apply for home loan.
What is Stamp Duty?
The state government imposes a special tax on financial transactions known as stamp duty. Every buyer of real estate must pay the stamp duty fees. Otherwise, they won’t be considered the property’s legitimate owner. This Tax Act became operative in accordance with the Indian Stamp Act of 1899.
You must make sure to settle your stamp duty on a home loan before you can move in. It is paid as part of the registration charges, which also covers the cost of your legal paperwork, such as your title deed. Stamp duty settles any doubts over whether or not you are truly the owner of your property, so make sure you complete this process before paying off all outstanding loans attached to your property.
Factors that Determine the Home Loan Stamp Duty
The cost of stamp duty on your home loan depends on various circumstances.
Age of the Property
If you plan on purchasing a property, one of the first things you would need to do would be to discover how much stamp duty on home loan charges will cost you. It’s easy enough to find out just by looking into the residential/commercial building age: newly constructed homes will cost more in stamp duty than older properties which generally have depreciated.
Age of the Owner
For its older residents, almost all individual states have lowered the stamp duty on property loans. Therefore, the amount of stamp duty fees you will pay depends on your age.
The Gender of the Owner
The government of India is actively working towards providing elderly citizens and women in the country a break when it comes to paying for their homes, a move that is geared at improving the new financial standing and self-confidence of more women homeowners.
Female homeowners receive discounts on their stamp duty. Only if the name of the female owner is used during the purchasing and registering of the property does this occur. The difference in stamp duty rates between men and women is about 2%.
The Type of the Property
If your property is a commercial building, you will have to pay higher stamp duty than those who own residential buildings. This is because commercial buildings require more facilities and amenities than residential buildings.
The Location of the Property
Property in suburban or municipal areas will likely have higher home loan rates and stamp duty. Buildings outside of a municipality or city will pay less in stamp duty.
What is the Stamp Duty Calculator?
You can use a stamp duty calculator to determine the precise sum of the fees you must pay in your state or city to buy a property. The stamp duty calculatorcomes very handy while calculating your property’s stamp duty.
What are Registration Fees for Home Loans?
Home loan processing fees & registration charges can be considered compulsory fees incurred when taking a home loan. These charges are usually 1% of the given value of the home. For example, if a property costs 20 lakh, then this would cost an additional INR 20,000 to register. Since these post-purchase costs are not included in your monthly home loan bill, it is imperative to plan for them upfront to avoid any last-minute surprises.
How to Pay Your Home Loan Stamp Duty and Registration Fees?
- Calculate the required stamp duty by estimating the value of your property.
- Get non-judicial stamp documents for the outstanding amount. E-stamp sheets are available online.
- Draft the selling deed using a qualified attorney’s services as your representative.
- Deposit the stamp duty and registration fees associated with the home loan.
- Submit the necessary documentation, such as NOC (No Objection Certificate).
- The registration procedure is considered complete after the credentials have been verified.