The southern city of Bangalore, popularly known as the 'Silicon Valley of India', has emerged as a start-up hub over the past few years. This has contributed to a steep property demand in Bangalore. The city tries to meet this growing demand by offering many options for all types of real estate, be it residential or commercial, for every budget segment.
If someone is planning to buy a property in Bangalore, they must know about the additional expenses they need to pay besides the property cost. This is especially so regarding the stamp duty and registration charges, which can substantially impact one's overall budget.
Stamp Duty and Registration Charges
Stamp tax or duty is a legal fee paid by the property buyer to the sub-registrar of the property location, as per Section 3 of the Indian Stamp Act 1899. The stamp charges are needed to be paid to validate the sales agreement. It is important to note that the state governments decide the rate of the stamp charges for their state properties.
Whereas, a registration charge is an amount paid by the property buyer for registering the property in the government records in their name. The charges are applied to properties for the registration of documents under the Registration Act, 1908.
Following are the factors which the state governments take into consideration while deciding the stamp tax for the regional properties -
How old the property is: The stamp tax calculation is based on the property's current condition. So, older properties attract a lower stamp tax than newly-built ones.
Property Location: This is an essential factor that affects stamp tax. A property in an urban area has a higher stamp tax than a property in a suburban or upcountry location.
Property owner's age: The amount of stamp tax charged to senior citizens is lower than the amount charged to younger buyers.
Property type based on usage: Residential properties are charged at a lower stamp tax rate than commercial properties.
Gender: In many states, stamp charges are lower for women buyers than men. However, in Bangalore, the stamp tax for males and females is the same.
Stamp Duty Rates on Properties in Bangalore?
The current stamp duty rate on properties worth over Rs. 45 lakh is 5% of the total or registered property value. In addition, buyers must pay a 2% surcharge and 10% cess on the stamp charges. Overall, the buyer is liable to pay a 5.6% stamp duty on property in urban locations. For properties in a village or semi-urban area, buyers need to pay a surcharge of 3% and a total stamp tax of 5.65% for any property that's worth over Rs. 45 lakh.
The Government of Karnataka has slashed its current stamp duty rates from 5% to 3% on the properties available between a price range of Rs. 21 lakh to Rs. 45 lakh. This move boosts the real estate sentiment in the State. Stamp duty on property worth less than Rs. 20 lakh stands at 2% of the valuation of the property.
It is important to note that the stamp tax in Bangalore is no different for male, female, or joint ventures.
Property Registration Charges in Bangalore?
For charges related to the registration of a property, the Government of Karnataka has not recently made any amendments as they did for stamp tax.
A property buyer in Bangalore must pay 1% of the property value as the registration charges and the stamp tax.
Property registration charges are equal and compulsory for all kinds of properties. However, for first-time residential property buyers, a rebate is available on the property registration charge.
The detailed category-wise information on stamp tax and charges for property registration in Bangalore in 2022 is given below:
Buyer's Gender
Stamp Tax Rates on properties above Rs. 45 lakh
Stamp Tax Rates on properties between Rs. 21-45 lakh
Stamp Tax Rateson properties less than Rs. 20 lakh
Charges for Registering Property
Male
5%
3%
2%
1% of the property value
Female
5%
3%
2%
1% of the property value
Joint (Male + Female) or (Male +Male) or (Female+Female)
5%
3%
2%
1% of the property value
Calculating Stamp Tax for Properties in Bangalore?
For buying a home, one must calculate in advance the stamp duty on houses and the charges payable by them for its registration to have a hassle-free property-buying experience. It is important to remember that home loans do not cover the property's stamp duty and registration charges, as these are considered overhead charges. Thus, the lender does not provide a home loan stamp duty. One can get a home loan with Tata Capital at interest rates starting from just 7.75% per annum.
One can use the below-mentioned easy steps to calculate stamp tax on their property -
Step 1: Visit the Kaveri Online Services (karnataka.gov.in) and go to the official stamp duty calculator page of the Karnataka Government website.
Step 2: The stamp duty calculator will ask to fill the required fields with specific information like the nature of the property. One needs to fill the fields and click on "Proceed".
Step 3: As a next step, fill in the details about the property like region type, municipal corporation, gram panchayat, city corporation, town panchayat, or others. Also, fill in the indicative market value and consideration amount in related fields.
Step 4: Click on 'calculate'. And the calculated stamp tax calculated will be displayed on the screen.
Many home loan providers also facilitate online stamp duty calculators. One can also use a house stamp duty calculator to confirm these expenses.
Wrapping Up
The Government of Karnataka has taken significant steps to boost sentiments toward buying property by slashing the stamp tax. However, stamp duty and registration charges are non-negotiable in property buying. So, it is wise for one to have thorough knowledge about these charges, along with the fact that the lender does not cover a home loan stamp duty amount. Prior information in this regard can help property buyers in Bangalore make financially sound decisions and keep their budgets in check.
02 August 2022
5 mins read
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