In today’s world to purchase a house, a lot of factors are needed to be considered like the cost of the property, type of the house, location, and many more. But, even if your dream home and before shortlisting the property, there is also one crucial factor to consider, and that is stamp duty and land registration charges.
Why Stamp Duty & Property Registration Charges are Important?
The property is transferred from one person to another legally only when it is registered at the Sub-Registrar Office by paying stamp duty and registration charges. Until the property completes the entire registration charges, it will be incomplete and will not be legalised.
Without stamp duty and property registration, you will not possess the right to secure your property form any frauds. To ensure they own the property, one is needed to register their property with the respective state government and follow their guidelines
For example, if you want to buy an apartment in Hyderabad for Rs 1 cr from Mr X. You pay the transaction value to Mr X, and then he executes a sale deed.
Then, you must register the sale deed by paying charges of stamps and registration in Telangana Sub-Registrar’s Office.
Once you pay the stamp duty and Telangana land/property registration charges, the transaction is recorded in the Sub-Registrar Office, and you will become the legal owner of the property.
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What IGRS in Telangana?
Integrated Grievance Redressal System (IGRS) is an official online portal created by Telangana state government for registration and stamp duty process. It is an initiative that is beneficial for both government and citizens.
The website facilitates various features like people can know the latest market value. Search for Encumbrance Certificate (EC), eStamp services, and many more. They can also get their marriage and property registrations. One can also share their feedback and complaints related to the registration & Stamp Department of Telangana.
What is Stamp Duty?
- Stamp Duty is collected whenever there is a transfer of assets or property from one person to another.
- It is collected by the State government and is governed under the Indian Stamp Act 1899.
- As the State government collects it, the stamp duty varies from one state to another.
In Hyderabad, the stamp duty includes stamp duty, registration charge/fee plus transfer duty and is a calculated on IGRS Telangana market value of the property.
How to calculate Stamp Duty and Land Registration Charges?
- Stamp duty is the rate based on individual states, as they levy a certain percentage on the total value of a property.
- Stamp duty charges also differ based on the nature of the property like residential or commercial and type of area like rural or urban.
- For example, Stamp Duty = (individual state)% of (Ready Reckoner Rate or Actual Transaction Value) the higher rate is considered.
- To pay duty charges one can choose from e-stamping, non-judicial stamp paper, or franking method( any authorised banks or agencies).
- After the payment of stamp duty, the document further moves to the registration process.
- Land Registration charges are measured as the (individual state registration)% of (Ready Reckoner Rate or Actual Transaction Value) the higher rate is considered.
How to calculate Land / Flat Registration Charges in Hyderabad, Telangana?
- The land/flat registration charges in Hyderabad are calculated as 0.5% of the property value.
- The property value is considered as the higher of Ready Reckoner Rate or Actual Transaction Value.
- Ready Reckoner Rate is the minimum value of the property that is fixed by the state government.
- For example, if the Ready Reckoner Rate is Rs 1 Cr and the Actual Transaction Value is Rs 1.5 Cr. The registration charge will be 0.5% of (Higher of Rs 1 cr or Rs 1.5 cr) = 0.005 * 1.5 cr = Rs 75,000.
- Land registration charges in Hyderabad are different for various sectors. They are segregated as Corporations and Municipalities, sale agreement and GPA, sale agreement with possession.
Why do You Have to Pay Stamp Duty?
Stamp duty is levied by the government while selling the property. The individual states impose it as per their particular laws. The rates of stamp duty vary from state to state.
It contains the main document which as the ownership details like the name of the landlord which ensures you that you are purchasing the property from the rightful owner.
It is mandatory to register the sale or transfer of property, and at the time of recording the transfer, you must pay the stamp duty and registration charges.
The stamp duty paid on Telangana land/property registration documents online is a legal document that proves that you are the owner of the property and is accepted as evidence in case of property disputes.
Also, in case you lose the original sale deed or transfer deed, you can get a duplicate transfer deed from the Sub-Registrar’s office that shows that you are the owner of the property.
When to Pay Stamp Duty and Property Registration Charges in Hyderabad
You must pay stamp duty and registration charges at the time of execution of a transfer agreement such as sale deed between two parties. As the process will be most likely the same for all states, but the percentages and charges will differ from state to state.
You can also pay the registration charges through IGRS Telangana e-challan / e- STAMPS (For Document Registration only).
Some deed details in Telangana of transfer agreements (mainly concerning a property) that require payment of stamp duty and registration charges are as follows:
- Sale Deed
- Gift Deed
- Exchange Deed
- Partition Deed
- Lease Deed where the period of lease is more than 12 months
- Transfer Deed/ Right Transfer Document
- Mortgage Deed
- Power of Attorney (General or Special)
Know How to Calculate Property Registration and Stamp Duty charges in Hyderabad
The stamp duty varies from one state to another state and can be estimated by using a stamp duty calculator to determine the stamp duty and registration charges.
Apart from corporation and municipalities, for other places, the same rates are applicable for apartments. In the case of the sale agreement and GPA, a stamp duty of 5% of the property value is levied with no transfer duty.
But, if the sale agreement is with possession, then a stamp duty of 4% of the total value of the property is imposed along with a registration charge of 0.5%. The benchmark is kept at a maximum of Rs 20,000/- and at a minimum of Rs 1000/-. The same is applicable, even if it is without possession.
To calculate the stamp duty and registration charges manually, you can use the formula given below:
For Corporations and Municipalities, Stamp Duty is 4% of property value,
Where property value is (Higher of Ready Reckoner Rate or Actual Transaction Value)
Ready Reckoner Rate is the minimum value of the property that is fixed by the state government. And, stamp duty is calculated as the higher of ready reckoner rate or actual transaction value.
Registration Charges is 0.5% of the property value.
And, the transfer duty is 1.5% of the property value.
Let’s look at some examples below:
If the Ready Reckoner Rate is Rs 1 cr and the Actual Transaction Value is Rs 1.5 cr, then stamp duty @4% is calculated as
Stamp Duty = 4% of (Higher of Ready Reckoner Rate or Actual Transaction Value) i.e. 4% of (Higher of Rs 1 cr or Rs 1.5 cr) = 0.04 * 1.5 cr = Rs 6 lakhs
Registration charge @0.5% of (Higher of Ready Reckoner Rate or Actual Transaction Value) i.e. 0.5% of (Higher of Rs 1 cr or Rs 1.5 cr) =0.005 * 1.5 cr = Rs 75,000
Transfer duty @1.5% of (Higher of Ready Reckoner Rate or Actual Transaction Value) i.e. 1.5% of (Higher of Rs 1 cr or Rs 1.5 cr) =0.015 * 1.5 cr = Rs 2,25,000
Therefore the total amount that the buyer needs to pay =
Actual Transaction Value = Rs 1.5 cr
Stamp Duty = Rs 6 lakhs
Registration Charge = Rs 75,000
Transfer Duty = Rs 2,25,000
Total Amount Payable = 1.5 cr + 6 lakhs + 75000 + 2,25,000 = Rs 1.59 cr
If the Ready Reckoner Rate is Rs 1 cr and the Actual Transaction Value is Rs 70 lakhs, then stamp duty @4% is calculated as
Stamp Duty = 4% of (Higher of Ready Reckoner Rate or Actual Transaction Value) i.e. 4% (Higher of Rs 1 cr or Rs 70 lakhs) = 0.04 * 1 cr = Rs 4 lakhs
Registration charge @0.5% of (Higher of Ready Reckoner Rate or Actual Transaction Value) i.e. 0.5% of (Higher of Rs 1 cr or Rs 70 lakhs) =0.005 * 1 cr = Rs 50,000
Transfer duty @1.5% of (Higher of Ready Reckoner Rate or Actual Transaction Value) i.e. 1.5% of (Higher of Rs 1 cr or Rs 70 lakhs) =0.015 * 1 cr = Rs 1,50,000
Therefore the total amount that the buyer needs to pay =
Actual Transaction Value = Rs 1 cr
Stamp Duty = Rs 4 lakhs
Registration Charges = Rs 50,000
Transfer Duty = Rs 1,50,000
Total Amount Payable = 1.5 cr + 4 lakhs + 50,000 + 1,50,000 = Rs 1.56 cr.
Important Factors that Influence the Calculation of Stamp Duty Charges in Hyderabad
Stamp duty varies based on the following factors:
Location of the property: Stamp duty charges differ for various locations. A property located in an urban area attracts more stamp duty compared to one found in a rural area. There is also a different charged levied when a property is located in a semi-urban area.
Type of property: Lower stamp duty is charged for a residential property (flat/apartment/independent houses) compared to a commercial property(industries/ commercial complex/ hotels). For this reason, as when compared to residential properties commercial properties require more facilities.
Amenities: Nowadays a lot of houses are being built with ultra-modern amenities. The same is also considered while imposing stamp duty charges. A home with more new-aged amenities like swimming pool, gym, clubhouse, sports facilities, etc. is most likely to get charged higher when compared with a property that has fewer amenities.
Age of the property: Stamp duty is applied to the total value of the property. It is done by considering certain factors like the age of the property, i.e. from the time of the built date. The duration of the property plays a significant role in defining the amount to be paid for the stamp duty. A new property attracts more stamp duty than an older property.
Gender of the buyer: Encouraging female buyers, many states apply like 2% extra stamp duty for male buyers. A female buyer gets an allowance on the stamp duty and is charged usually lesser stamp duty amount comparatively.
Age of the buyer: We see that in a lot of cases, older citizens get more benefits comparatively. The same is applicable when it comes to stamp duty charges. Many states while charging stamp duty they consider the age of the buyer. Senior citizen gets a rebate on the stamp duty as per the specific state laws.
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