Is Stamp Duty Applicable on Resale Flats or Not?

Introduction

Stamp duty is applicable on resale flats. According to Section 3 of the Indian Stamp Act of 1899, the parties involved in the process are required to pay it on the sale deeds. This applies irrespective of whether the property is an under-construction project, a ready-made flat, or a flat in the secondary market.

Stamp Duty: Is Stamp Duty Applicable on Resale Flats or Not?

Table of Contents

When you buy a ready-to-possess home in Mumbai, you pay a 2% stamp duty on the purchase and a 1% registration charge. These charges remain the same whether you buy the property from the resale market or from ready-made flats available from builders. However, when it comes to Goods and Services Tax (GST), there is a silver lining for buyers of resale properties.

You have bought a property from a developer who has already paid GST during its construction cycle. But even if no separate invoice is raised for GST12, those charges will be added to the total price. So, while GST has withdrawn many state and central taxes on real estate transactions, stamp duty and registration fees are not among them.

Stamp Duty ie

Stamp duty is a tax levied by state governments in India on various legal documents, including property transactions. When you buy or transfer ownership of certain assets, such as real estate, stocks, or other valuables, you pay it to legalize and formalize the transaction.

The amount of stamp duty is usually a percentage of the transaction value or a fixed amount. It varies from state to state. The purpose of it is to verify and authenticate legal documents, knowing that they are legal. it is considered the main source of revenue for the states.

Common documents on which stamp duty is levied include sale deed, sale agreement, lease, gift deed, power of attorney, etc. Home buyers need to have legal documents and be aware of the current it regulations while engaging in any transaction that requires execution.

Registration Fees

Paid along with stamp duty. The registration fee is generally required to collect legal documents related to property transactions. Then a tax is levied by the government to officially record and verify. When you register a document, it becomes part of the official public records, providing legal recognition of the transaction.

The fee shall be paid at the time of registration of these documents with the sub-registrar or registrars. The registration fee is separate from stamp duty. It is calculated as a percentage of the transaction value. The registration fee is usually a nominal charge. It covers the cost of maintaining public records.

What Is a Resale Flat?

A resale flat is a term used for a previously occupied property that has been put up for sale by its current owner. Compared to an under-construction property, a resale flat is already lived in or used by a previous resident. When someone decides to sell their current home, another person buys it from them. It is considered a resale transaction.

Stamp Duty on Resale Flats

Section 3 of the Indian Stamp Act of 1899 makes it mandatory for parties involved in the process to pay stamp duty on sale deeds. Therefore, a sale deed must be registered, irrespective of whether it is being executed for an under-construction property. A ready-to-move-in flat, or a flat in the secondary market.

Therefore, the buyer has to pay the registration charges are applicable to his state. Irrespective of whether it is an upcoming project or an old property, as long as the sale deed is executed.

If you are buying a house in Delhi that will be ready for possession, say, in two years, you will pay 6% as it and 1% as the registration charge on the purchase. The charges remain the same if you buy a property on the resale market. The same remains true for ready-to-move-in flats available with builders.

Conclusion

Stamp duty is applicable on resale flats. It is a tax levied by the state government on the transfer of property rights. It is payable by the buyer of the property, regardless of whether it is a new or resale flat. For more information, visit our  Openplot.

Also read: Stamp Duty in Major Cities of India in 2024

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