When purchasing or investing in residential or commercial property, one significant cost to consider in addition to the property cost is the stamp duty and registration fees. These compulsory government charges confirm your property ownership and ensure the contract of sale is legally binding. These charges can help you budget properly while buying new properties in Bangalore.
What is Stamp Duty?
Stamp duty is a state government tax applicable to property transactions. It serves as proof of ownership and allows the sale agreement to be legally admissible in court. If you fail to pay the proper stamp duty, someone may challenge your ownership someday. In Bangalore, the government calculates stamp duty based on the higher market value of the property and the notified rates. The rates of stamp duty for properties in Bangalore:
- 3% of the property value for deals of more than ₹35 lakh
- 2 per cent of the property value for those between ₹20 lakh and ₹35 lakh
- 1% of the properties worth less than ₹20 lakh transactions
This staggered pricing helps make it affordable for buyers of all budget types, ranging from high-end apartments to affordable flats.
What are Registration Charges?
Registration charges must be paid in addition to stamp duty. These charges are for legally recording the property in your name. In Bangalore, the registration fee is 1% of the property cost.
For instance, if you purchase a flat of ₹50 lakh, the registration cost would be ₹50,000 apart from stamp duty. You must pay for these at the Sub-Registrar’s Office, and the government records the property in your name, making you the legal owner.
Additional Fees to Consider
The primary cost is the stamp duty and registration; you must, however, also consider:
- BBMP/BDA is waiting to recover the betterment charges for the newly formed layouts.
- If you hire a lawyer: Legal and documentation fees.
- 5% GST (Goods and Services Tax) applies to under-construction properties.
When developers build new properties in Bangalore, they typically guide buyers through the transaction, but buyers should always know about the charges beforehand.
Why should you pay these Charges?
Paying the right stamp duty and registration charges ensures perfect ownership and safeguards against potential legal disputes. It will also be vital when you sell your property, as your buyer will require your registered documents as evidence of title. Bypassing or underpaying these dues might lead to obstacles in getting a home loan, transferring the property, or selling it later.
Final Thoughts
Purchasing new properties in Bangalore is a significant milestone, regardless of what you are in the market for, your dream home or a good investment. Besides matching localities, amenities, and builder reputation, do not forget to add the stamp duty and registration charges to prepare your budget. These expenses are marginal compared to the peace of mind you get, knowing that you are doing something safe, legal, and recognized by the government.
Do factor these charges into your calculations for a hassle-free buying experience!
