The stamp duty and registration charge for apartments have not been raised. According to Registration Department Secretary Jyoti Nirmalasamy, the same approach is followed from 2012 to 2020.
In this respect, he stated in a statement released yesterday: “Construction companies that want to build flats, first purchase land, plan to build a residence, and then enter into a construction contract with the prospective buyer.” The purchase deed for the undivided section of the property and the construction contract document are registered separately when the deed is registered in the name of the prospective buyer.
As is customary, a stamp duty of 7% of the market guide value of the plot and a registration fee of 2% are paid on the purchase deed of an undivided portion plot. The construction contract included a stamp duty and registration fee of 1% of the flat’s construction cost. This registration price alone has increased by 2% since last July 10. A 1% stamp duty and a 3% registration fee are also levied on the construction cost. This method only applies to papers registered prior to flat construction.
It was suggested in 2020 that when such documents are recorded, registrars do not need to insist on the flat being stated in the document. However, some people began to abuse this advise.
After 2020, construction companies have been following the practise of recording only the contract, undivided part tenancy deed, even in cases where the construction of flats has been finished and handed over, instead of having registered the flats directly to the beneficiaries, even after the finish of the construction, it has not been disclosed in the document.
Deeds related to fully completed flats were not registered as purchase deeds in order to avoid paying 7% stamp duty, 2% registration fee, and an additional 5% fee to the government, but after the 2020 advisory, only 1% stamp duty and 3% registration fee were registered as construction contracts and were being improperly used.
Such ongoing registration may generate issues with future re-purchases of the apartment.
As a result, the prior advise not to demand on confirmation of building completion at the time of deed registration has been rescinded, and the stamp duty and registration price for apartments has not been increased.
Buyers of entirely finished flats are now guaranteed the ability to acquire both the undivided home and the flat straight from the builders.
The same method that is already in place will be followed solely for people who plan to acquire flats by entering into a construction contract while the flats are not yet built. All registrars have been urged to register a completed flat deed as a building purchase document.
As a result, the same method as from 2012 to 2020 is currently being emphasized, however the rise in registration fees for property buyers is incorrect, as stated by him.