Most buyers budget carefully for the price of a home and then get surprised by the paperwork costs at the end. Stamp duty and registration charges are the largest of these, and they are payable in full before the sale deed is registered.
What You Are Actually Paying For
Stamp duty is a state tax levied on the transfer of property, and registration is a separate fee for recording the deed in the government register. Both are calculated on the higher of the agreement value and the circle rate (also called the ready reckoner rate) fixed by the state for that locality.
Why the Rate Differs So Much
Each state sets its own rates. Several states charge lower duty when the property is registered in a woman's name, and some add a metro cess or local body surcharge in large cities. Rates can also differ for a new flat versus a resale, and for residential versus commercial property.
Circle Rate vs Agreement Value
If you buy below the circle rate, the duty is still charged on the circle rate, so a discount negotiated with the seller does not reduce this cost. Check the current circle rate for the exact locality before you finalise a budget.
How to Plan for It
Keep this amount ready in cash or bank balance, because home loans normally do not finance stamp duty and registration. Use the stamp duty calculator on DekhoGhar to get an estimate for your state, then confirm the final figure with the sub-registrar's office or your lawyer.
