Purchasing a property is a dream for many in India, and it requires careful planning as it is an important financial decision. If you are convinced of building a property, you must first check your affordability, make a budget, and then apply for a home loan if necessary.
Buying a property includes a number of related expenses that you should not overlook, including stamp duty, registration fees, Tax Deducted at Source (TDS), and Goods and Service Tax (GST). Among the most significant costs associated with buying a home is stamp duty. To complete the purchasing process, you need to pay a part of your property value as stamp duty. Get the details of stamp duty and its calculation process here:
What is stamp duty?
Stamp duty is an official proof of ownership for any kind of property, including homes, apartments, and land. The sum that must be paid during the purchase of property, as a percentage of the total transaction value, is known as stamp duty.
The actual stamp duty value is calculated during the registration process based on the valuation of the property. State governments impose stamp duty, a charge, on all documents related to a transaction, including contracts, agreements, deeds, and other related documents, in order to validate the transaction.
Stamp duty validates the papers used in the purchasing of the property and serves as a foundation for evidence if there is an ownership dispute over the acquired property. Nothing can be used as evidence in court if a document is not properly stamped. It also confirms that the property is reasonably priced.
How stamp duty is calculated?
The property's value affects how much stamp duty is calculated. Every state in India has its own criteria to calculate stamp duty. Paying for it usually involves using a government-determined circle rate concept.
You will be required to pay stamp duty for the new property when you are about to purchase in one of three given ways:
Franking does involve some additional fees that are authorized by the state in which you are buying the property. Stamp duty rates are also determined by taking into account a number of other criteria. The key elements are:
Stamp duty in Andhra Pradesh
Within six months of the sale agreement execution, all immovable property in Andhra Pradesh needs to be registered. In 2023, the Ready Reckoner Rates (RRR) established by the state government or the properties market value would be the basis for determining stamp duty and registration fees in Andhra Pradesh.
For example, if you pay Rs. 7,000 per sq. ft. for a property, and the area's RRR is Rs. 6,000, then the stamp duty and registration fees you must pay will be determined by any value between Rs. 7,000 and Rs. 6,000. In Andhra Pradesh, the stamp duty is 5% of the property's market value. So, if you buy a property worth one crore, then the stamp duty payable is 5 lakhs.
Stamp duty in Telangana
If you are thinking of buying a property in Telangana, you must include the cost of stamp duty, which would add up to a significant amount of your purchase. Stamp duty rates in Telangana are currently 4% of the entire cost of the purchasing property.
The stamp duty levied by the Telangana government is equivalent to 4% of the property value. There is a stamp duty of Rs. 4 lakhs if you are purchasing a property in Telangana for Rs. 1 crore.
Are stamp duty fees covered by a property loan?
Purchasers of the property must pay stamp duty fees out of their pocket because the banks don't include these costs when calculating the price of the property. So, banks only lend out 80% of the property's worth.
Also, banks use their own techniques to assess the property. It means that if a bank decides after the assessment that a property being sold for Rs 1 crore is only worth Rs 90 lakh, it will not be allowed to lend Rs 80 lakh or 80% of the proceeds. In that situation, it will provide a housing loan equal to 80% of the Rs 90 lakh, or Rs 72 lakh.
Stamp duty is an important consideration in Indian real estate transactions. It offers buyers and sellers of properties a financial and legal safety net. Are you interested in buying a property in Andhra Pradesh or Telangana? Raaga Mayuri Builders are the firmly established real-estate developers you can trust. Apart from developing apartments, villas, and commercial complexes, they also help you in the registration process, including stamp duty calculation and more.