Are you looking to buy a house in Bengaluru – the IT hub of the country? Then, you must have planned a tentative budget considering all the necessary costs. But, did you include registration charges and stamp duty? These costs vary periodically and must be added while financially planning your finances for buying a home.
Read further to know what is stamp duty and when is stamp duty payable?
All about stamp duty
Stamp duty is a tax levied on a property to authenticate its sales agreement by the state government. The stamp duty also acts as a record of the property and is a crucial document for a home buyer. Are you wondering when is stamp duty payable on property? You must pay this charge before the date of registration, as it will provide a legal status to your property transaction.
Moreover, stamp duty charges are fixed by the state government and depend on the location, age, property type and status of the property. As mandated by the Registration Act, 1908, you are also liable to pay a certain percentage of the property’s cost towards registration. This is called registration fee, and in most states, is charged at 1% of the property cost. Hence, your property’s total cost is the saleable value plus stamp duty plus the registration charges.
Stamp duty in Bengaluru
In May 2020, the Karnataka government slashed the stamp duty charges to 3% for properties falling within the Rs. 21 lakhs to Rs. 35 lakhs price bracket. On properties priced less than Rs. 20 lakhs, the stamp duty charge is 2%, and on properties higher than Rs. 35 lakhs, the charge is 5% of the total property value.
In addition to stamp duty, the ongoing registration fee charged on Bengaluru properties is 1% of the total property value. Furthermore, there is an added cess and surcharge, which differs for urban and rural areas. All these charges apply to a new property and not an old one available for resale.
What’s more, you can avail a tax benefit on your residential property by paying the stamp duty and registration charges. Also, if you are considering a home loan to buy your next house, you must calculate these essential costs while choosing your desired property.
Remember, the stamp duty and registration charges are an integral part of buying a new house as they provide your property with its rightful legal status.
If you plan to take a home loan to finance your dream abode, keep these costs (stamp duty + registration charges) in mind and borrow accordingly. Also, before availing housing finance, calculate your potential monthly EMIs by using a home loan EMI calculator.
Lastly, it is no secret that in the past decade, the city of Bengaluru has established itself as the ‘Silicon Valley of India’ offering countless job opportunities and a contemporary lifestyle to its residents. Given these advances, the city is ripe with real estate opportunities.