Stamp duty and registration charges are mandatory charges that home loan borrowers must pay on their property purchases. The stamp duty and registration charges are not fixed but change based on the location, property type, and value of the property. Paying stamp duty and registration charges is an important step in the home loan process. The stamp duty is a tax that goes to the state government whenever a property transaction takes place. The registration charge is a charge that the homebuyer must pay to get the property registered in their name and avoid any future hassles. Let us know about both these charges in detail.
Stamp Duty and Registration Charges: What Are They?
The stamp duty is a tax that the home buyer must pay to the state government. The stamp duty is calculated based on the property’s market value or the value mentioned in the agreement. Many people get confused about who is to pay the stamp duty charges. It is the homebuyer who must pay these charges on the value mentioned in the sale agreement. The stamp duty changes from state to state. Therefore, home loan buyers must check beforehand the stamp duty applicable in their state and that they will have to pay.
The registration charges are also to be paid by the homebuyer. This is the charge that homebuyers pay to get the property registered under their name. The registration fee is calculated based on the property’s value or the circle rate.
The stamp duty, as well as registration charges, are mandatory charges that one must pay on property purchases. Not paying these charges can lead to one attracting a penalty. While stamp duty is paid on the property purchase, the registration charges are paid to get the property transferred from its previous owner to one’s name.
How is Stamp Duty Calculated on a Property Purchase?
Stamp duty charges vary from state to state. However, these charges typically vary from 5% to 7% and can turn out to be a massive amount. Therefore, homebuyers must take into consideration both these charges when calculating the home loan amount they must apply for. While we are talking about stamp duty, we must also take into consideration the factors that affect stamp duty. These include the market value of the property being bought, the type of property and the number of floors in the property, the location of the property, and the age and gender of the property owner. Further, commercial properties attract a higher stamp duty than residential properties.
If you do not know how to calculate stamp duty on your property purchase, you can use a stamp duty calculator to make your life easier.
Stamp Duty Calculator: What is It and How Does it Work?
A stamp duty calculator is a fairly easy-to-use online tool that can help home buyers calculate the stamp duty they must pay on their property purchase. To use the stamp duty calculator, simply follow these steps:
- Search the internet for a stamp duty calculator. Choose to go for a calculator on a reliable website.
- Select the state in which your property is located.
- Next, enter the value of your property.
As soon as you enter these details into the stamp duty calculator, the calculator will give you the stamp duty you will need to pay to the state government. Other than the stamp duty calculator, also use the home loan EMI calculator and the home loan eligibility calculator to enhance your chances of loan approval and secure the loan on the most profitable loan terms and conditions. A home loan EMI calculator will allow you to try different combinations of loan value and tenor and arrive at a combination that delivers EMIs that you will be able to comfortably repay.
A home loan eligibility calculator, on the other hand, will allow you to calculate the loan amount that you are eligible for. The home loan eligibility calculator tells you this based on the information entered, including your income, the loan tenor you wish to opt for, the home loan interest rate you have been offered, and the portion of your income you dedicate towards debt repayment.
