Stamp duty and registration charges in Tamil Nadu


Here’s a look at the latest stamp duty charges in Tamil Nadu and how it impacts your property purchase

Among Indian states, stamp duty charges on property transactions are quite high in Tamil Nadu. This means, when you buy a property in the state capital Chennai, for example, you will need to reserve a significant amount towards the mandatory stamp duty and registration charges.

Stamp duty is the fee you are liable to pay to the authorities in order to register a property under your name. Registration charges are paid to the same authority for doing all the paper work to execute this process.

Let us discuss the monetary implications of this on a home buyer in Tamil Nadu, in detail.

 

Stamp duty

 

Stamp duty and registration charges for various documents in TN

Document typeStamp dutyRegistration fee
Conveyance (Sale)7% of the market value of the property4% of the market value of the property
Gift7% of the market value of the property4% of the market value of the property
Exchange7% of the market value on the property that has the greater value4% of the market value on the property that has the greater value
Simple mortgage1% on the loan amount, subject to a maximum of Rs 40,0001% on the loan amount, subject to a maximum of Rs 10,000
Mortgage with possession4% of the loan amount1%, subject to a maximum of Rs 2,00,000
Agreement to saleRs 201% on the money advanced (1% on total consideration if possession is given)
Agreement relating to construction of building1% on the cost of the proposed construction or the value of construction or the consideration specified in the agreement, whichever is higher1% on the cost of the proposed construction or the value of construction or the consideration specified in the agreement, whichever is higher
CancellationRs 50Rs 50
Partition among family members1% on the market value of the property, subject to a maximum of Rs 25,000 for each share1%, subject to a maximum of Rs 4,000 for each share
Partition among non-family members4% on the market value of the property for separated shares1% on the market value of the property for separated shares
i) General Power of Attorney to sell the immovable propertyRs 100Rs 10,000
ii) General Power of Attorney to sell the immovable property (Power is given to a family member)Rs 100Rs 1,000
iii) General Power of Attorney to sell the movable property and for other purposesRs 100Rs 50
iv) General Power of Attorney given for consideration4% on the consideration1% on the consideration or Rs 10,000, whichever is higher
Settlement in favour of family members1% on the market value of the property but not exceeding Rs 25,0001% on the market value of the property, subject to a maximum of Rs 4,000
Settlement in other cases7% on the market value of the property4% on the market value of the property
Partnership deed where the capital does not exceed Rs 500Rs 501% on the capital invested
Partnership deed (other cases)Rs 3001% on the capital invested
Memorandum of Deposit of Title Deeds0.5% on loan amount, subject to a maximum of Rs 30,0001% on loan amount, subject to a maximum of Rs 6,000
i) Release among family members (coparceners)1% on the market value of the property but not exceeding Rs 25,0001% on the market value of the property, subject to a maximum of Rs 4,000
ii) Release among non-family members (co-owner and benami release)7% on the market value of the property1% on the market value of the property
Lease below 30 years1% on the total amount of rent, premium, fine, etc.1%, subject to a maximum of Rs 20,000
Lease up to 99 years4% on the total amount of rent, premium, fine, etc.1%, subject to a maximum of Rs 20,000
Lease above 99 years or perpetual leave7% on the total amount of rent, fine, premium of advance, if any, payable.1%, subject to a maximum of Rs 20,000
Declaration of trust (if property is there, it would be considered as sale)Rs 1801% on the amount

Source: Registration Department, TN

 

Stamp duty and registration charges for women in Tamil Nadu

The stamp duty and registration charges remain the same for men, women and joint buyers in Tamil Nadu.

See also: All about Guideline Value in Tamil Nadu

 

Stamp duty, registration charges’ impact on final property price

Let us examine how to calculate the impact of stamp duty and property registration charges on the final property price : 

Suppose Gokul bought a property in Chennai that has a guideline value of Rs 40 lakhs. He will have to pay the following charges:

  • Registration fee: 4% of Rs 40 lakhs = Rs 1,60,000
  • Stamp duty: 7% of Rs 40 lakhs = Rs. 2,80,000

Hence, the effective cost of owning this property comes to Rs 44.40 lakhs.

 

Registration charge for a resale property

The registration charge for a resale property is 1% of market value or the agreement value of the property. The stamp duty that will be levied on the same is 7%.

 

TN govt may make registrations compulsory for joint ventures

The registration and finance departments of Tamil Nadu are discussing the feasibility and modalities of reducing the registration fee for joint ventures (JVs) in the state. Currently, 75% to 80% of the residential and commercial projects in the state are undertaken as JVs. However, with the registration charges being as high as 11% of the guideline value, these are not registered. So far, registration of the JVs was not mandatory. To encourage registrations, the authorities are considering bringing down the fee to 2% of the guideline value. It will also become mandatory to register JVs, therefore, making it legally binding.

This change would require an amendment to the Registration Act, 1908, which, in turn, requires the union government’s assent. The idea behind this move is to ensure healthier revenue for the state government.

 

Property registrations in Chennai amid COVID-19

During the early part of 2020, owing to the Coronavirus pandemic and the resultant lockdown, property registrations saw a dip. However, starting August 2020, sales did see an uptick and this is evident through the revenue generated from property registrations in August, which amounted to Rs 793 crores. Sources also suggest that 17,000 more registrations were clocked this year in August, as against the same period in 2019.

“Plotted developments and land parcels in and around Chennai moved faster, comparatively,” says T Balabhaskar, a local real estate contractor, adding that sales suffered on the whole, owing to restrictions on inter-state travel and rising cases of COVID-19. Local brokers are also hopeful that actual sales will pick up, given that enquiries on ground have increased. Prospective home buyers have been enquiring about price benefits, cash discounts and customised packages and see an opportunity to invest, in spite of the pandemic.

Check out properties for sale in Chennai.

In May 2020, the registration department of TN clarified that new and ready-to-occupy flats and buildings will not need to pay stamp duty and registration fees. This was applicable only on the first sale of the property and only the undivided share of land (UDS) would be subjected to stamp duty and registration charges and not the super built-up area.

 

Record-high registrations in October 2020

On October 29, 2020, the registration department witnessed an all-time high registration of 20,307 documents with 575 sub-registrar offices. The sale of stamp duty and registration fees on the day brought in Rs 123.35 crores. October had been a good month for the department with earnings clocked at Rs 1,096 crores.

 

Will Tamil Nadu reduce stamp duty?

Industry body Confederation of Real Estate Developers’ Association of India (CREDAI) has said that it has discussed the possibility of stamp duty reduction in a high-level meeting chaired by the state’s deputy chief minister, O Panneerselvam. The state and its economy, which were heavily hit after the floods that devastated the livelihoods of many in 2015, was dealt a further blow in 2020 following the COVID-19 pandemic. Therefore, the industry body feels that to provide some relief to prospective home buyers, the authorities must act soon.

“From 11% (both stamp duty and registration charges), we have requested for a reduction to 5% stamp duty and 1% registration charge permanently and as a short-term measure, we have asked reduction to 4% stamp duty and 1% registration charge till March 31, 2021,” said S Sridharan, CREDAI chairman, Tamil Nadu chapter.  Only time will tell whether the state government will give its nod.

 

FAQ

Is it mandatory to register property in Tamil Nadu?

Yes, as per the Registration Act, 1908, it is mandatory to register your property.

Where can I pay stamp duty in Chennai?

You can either pay the stamp duty at the registrar/sub-registrar’s office or avail of the e-stamping facility.

What are the documents required for registration of property?

You will need the stamp duty receipt, your PAN card, government ID proofs of all parties, including the witnesses, two passport-sized photographs, NOC, no dues certificate, sale deed, POA, pattadar passbook, etc.

 

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