Real estate is one of India's most popular investment options. The tax values of the purchase are one of the primary considerations for buyers. While real estate has kept delivering exceptional returns over the long term, property purchase tax is a burden for most buyers who would not want to pay. Although taxes cannot be eliminated, at least the tax cost can be reduced using a few smart ways.

What is Stamp Duty?          

Stamp duty is a type of property tax to pay while buying a property from one person to another. It is similar to the government's sales or income tax. You must pay stamp duty based on the value of the sale when buying land or property in Hyderabad or anywhere in India. Paying stamp duty is essential while buying a home as it is a judicial confirmation in the house sale agreement, and it helps to avoid future disputes. When you pay stamp duty, it is automatically registered in the Government property purchase transactions. If the stamp duty is not paid, the value of the deal is removed.

What is Property Registration?

The documents shall be registered by Sub Registrar of Assurances of the jurisdiction, in which the property is acquired. Within four months after the payment of the stamp duty, the documents must be registered following the Registration Act of 1908. Unless the registration is done, a right to that property or apartment is void. The property registration charges vary from one state to another, and It would be higher than the stamp fee. You will have to transfer the property and sign it on your name.

The fee is either 1 percent of the market value or contract value, but the limit is Rs. 30,000. The original document must be written on one side to register a property and sent to the registrant officer with two photocopies of the original. Both the buyer and the seller should be present during the registration, together with two witnesses. If you have already paid, you must also have an ID proof and a stamp copy proof. A receipt is issued with a separate serial number after the procedure is completed.

Below are some of the tips to know how you can save stamp duty and registration charges on a property purchase

Sub Registrar Application

Due to infrastructure developments and government policies, the prices of the property are stable. However, Govt is ready to review each year the Circle Rate / Govt Guidance / Ready Reckoner rate. The stamp duty is one of the local government's primary sources of income. As a result, the market value of the property is lower than the circle rate in many parts of metro towns or cities which have seen rapid growth.

The registration fees for the property in such a situation to be charged at more than two levels, i.e. circle rate or market value. For example, if you buy Rs 60 lakhs property and the circle price is Rs 75 lakhs. In this case, the registration fee for a property on Rs 75 lakhs is payable. Total charges at 6 percent are supposed to mean a further Rs 90,000 outflow. The home loan company or brokers advise the buyer to pay registration fees for the property and close the deal.

Many buyers do not know that they can appeal to the sub-registrar to assess market value under the State stamp act. After completing the registration, the sale/conveyance document shall be held in force. The issue is referred to as DC, or the concerned authority determines the market value. In that case, the relevant authority is observed that the market value is lower than the circle rate. The purchaser is entitled to register the property at a lower cost and can save registration fees for properties.

Undivided Share Property Registration

You can save the property registration charges at Undivided Share and is only available for under-construction building. In general, a buyer signs with the builder by two contracts, i.e. sale and construction agreements. As per the terms, a sale agreement is for undivided Share, i.e. the share of a purchaser within the common area. The values of the property and land development expenses are included. For example, a super built-up area for a flat of 1000 sq ft. The built-up area is estimated to be 750 and UDS 250 sq ft. and the property value of Rs 30 lakhs. The builder will break this Rs 30 lakhs into two parts, i.e. sales and building contract.

The UDS contract of selling 250 sq.ft. Will be a circle rate or the guidance value for Govt will be Rs 10 lakhs. In the building agreement balance, 20 lakes will be included in the construction costs. For USD 250 sq.ft. i.e. Rs 10 lakhs, the act of sale will be completed. Accordingly, the purchaser will save the cost of building land on 20 lakhs. In some states like Tamil Nadu, it is compulsory to register both sales and building arrangements in Rs 200 stamp paper. This option is only possible where it is not obligatory to register a construction deal.

Discount For Women on Property Registration Fees

For joint or individual purchases by women, states such as Haryana and Delhi offer up to a 2 percent reduction in property registration fees. You can include a woman if she is a wife or mother to save property registration charges. If the female buyer is wife or mother is salaried, you can avail a home loan if she is not salaried, you cannot get this benefit.

The reason is that a co-owner should be co-borrower in the case of joint ownership. A non-earner, therefore, shall be the guarantor/co-applicant for a home loan with the consent of the co-owner. Those situations should be avoided only to save a few thousand rupees.

Local Stamp Act

The registration fees for the property are under the subject of State. The laws of the act vary from one state to another. The local stamp act should be reviewed or appoint a professional who can help. State rules also help you save the registration fees for a property.

In Maharashtra, many customers do not know that the registration costs only apply to the net profit if one person sells the property to a buyer within one year of buying it. For example, Mr. A purchased a 1.5 Crores property from a builder. If he sells it to 1.60 Crore within a year, in this case, registration fees only apply to 10 lakhs, i.e. the transaction's net profit.

Also, if a person gifts his residential/commercial property to husband, wife, son, daughter, grandson, granddaughter or wife of the deceased son, the stamp duty is Rs 200 only. Stamp act in this state is very flexible and friendly among all states.

If you decided to take a home loan, you should talk to the home loan provider about property registration value since PSU banks give home loans on the registration value of the property. For example, the contract value is Rs 1 crore. The stamp duty and property registration are set at 70 lakhs. PSU banks will consider 70 lakhs to determine eligibility for home loans. The eligibility for total home loans is 80% of 70 lakhs, i.e. 56 lakhs. So it is essential to keep the provider of home loans in the process to avoid future disputes.

Buying a residential project which is authorized by reputable banks it will ensure that the project is trustworthy. As per the feasibility, buyers can easily get home loans from these banks to buy their dream home. Are you planning to buy the best home in Hyderabad? Visit PropertyAdviser.in here you can know detailed information of the project like available units, home loan and RERA approvals, construction status, price, nearby areas with distance, and many more. We guide you with 100% verified property information which helps you to save your valuable time and make smart investment decisions.

By: Shailaja K