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What is Stamp Duty and Registration Fees in Tamil Nadu

Stamp duty, as a form of tax on all types of properties, including agricultural and non-agricultural land, freehold or leasehold units, residential flats, independent villa or house and commercial buildings. Among Indian states, stamp duty charges on property transactions are quite high in Tamil Nadu. This means, when you buy a property in the state capital Chennai, for example, you will need to reserve a significant amount towards the mandatory stamp duty and registration charges.

What is a Registration Charge?

Although paid for the same property value the reason for paying and the ways to calculate stamp duty and registration charge, vary. How much stamp duty you are required to pay completely depends upon the transaction value of your property, however, the registration charge is a fixed cost property buyers pay for the service of adding a deed or contract in government records.

Someone bought a property in Chennai that has a guideline value of Rs 40 lakhs. He will have to pay the following charges:

  • Registration fee: 4% of Rs 40 lakhs = Rs 1,60,000
  • Stamp duty: 7% of Rs 40 lakhs = Rs. 2,80,000

Hence, the effective cost of owning this property comes to Rs 44.40 lakhs.

The registration charge for a resale property

The registration charge for a resale property is 1% of market value or the agreement value of the property. The stamp duty that will be levied on the same is 7%.

Documents required for registration of property

You will need the stamp duty receipt, your PAN card, government ID proofs of all parties, including the witnesses, two passport-sized photographs, NOC, no dues certificate, sale deed, POA, pattadar passbook, etc. You can either pay the stamp duty at the registrar/sub-registrar’s office or avail of the e-stamping facility.

Location of the property:

Stamp duty is different for the properties that are considered inside the municipal limits of a city, as compared to the properties that fall outside the municipal limits. The charges are higher in case of the former. Also, whether the property you are planning to buy is a part of a city, a rural area, a metropolitan, or a suburb, will have a certain amount of impact on the value of stamp duty that you need to pay.

Project amenities:

The amenities you are receiving with the purchase of the unit change the calculation of stamp duty in some states of the country. For example, you are purchasing a unit from a housing project in Chennai and they are offering you high-end amenities like a clubhouse, gym, elevators, community halls, swimming pools and more, you will have to pay additional stamp duty.

Registration Charge Calculation

To calculate registration fee, various factors are taken into consideration, based on the type of property you are buying and the city/state laws. The main factors used in the calculation of property registration free are:

  • If the apartment/office you are buying is a part of a multi-storey building, the super built up area is considered for calculation.
  • For lands or plots, the total square footage area is multiplied by the guideline value of the same land.
  • If the property is a villa or independent house, then you need to calculate the registration fee on the total constructed area.

Stamp duty on Commercial Property:

Whether you are purchasing the property for residential use or commercial use creates a difference. Stamp duty on commercial properties is always higher than that of residential property.

Stamp Duty and Property Registration Charges in Chennai

You may have finally bought that dream home of yours in Chennai, but the journey doesn’t end there. You may have the physical possession of the property, but that does not make you its owner. There are certain legal documents that indicate the ownership of the property distinctly, and they can be obtained by paying the stamp duty and registration charges on the property in Chennai.

Simply put, stamp duty is a property tax of sorts, which is to be paid in full by the buyer in the specified time. It is like the income tax or the service tax collected by the government and serves as a legal evidence of the fact that the buyer has purchased the property. Paying the Stamp Duty and Property Registration Charges ensures that the property is officially registered in the buyer’s name. In case the buyer fails to do so, it will result in huge penalties and a decline in the value of the property.

Stamp duty varies from state to state and is determined by various factors like the market value or the agreement value of the property, ownership status (male or female), residential or commercial, et cetera.

Once the stamp duty has been paid, the property needs to be registered at the Sub-Registrar office of the jurisdiction where the property was acquired. It is mandatory to register the property, as per the Registration Act, 1908. Any ownership of the property will be considered to be null and void unless it is registered.

Registration charge is incurred when the buyer transfers/purchases the property and gets it registered in his/her name. The fee for the same is 1% of the property’s value.

The stamp duty and registration charges for the city of Chennai in 2021 can be found below.

Stamp Duty and Registration fee in Chennai

 

Document ClassificationStamp SolutionRegistration Fee
Conveyance (Sale)7% on the market value of the property4% on the market value of property.
Gift7% on the market value of the property4% on the market value of the property.
Exchange7% on the market value of the greater value.4% on the market value of greater value property.
Simple Mortgage1% on the loan amount (subject to a maximum of Rs 40,000)1% on loan amount (subject to a maximum of Rs.10,000)
Mortgage with possession4% on loan amount1% (subject to the maximum of Rs.2,00,000)
Agreement to SaleRs.201% on total consideration if possession is given
Agreement relating to construction of building1% on the cost of the proposed construction/the value of construction/ the consideration specified in the agreement, whichever is higher1% on the cost of the proposed construction/the value of construction/ the consideration specified in the agreement, whichever is higher
CancellationRs.50Rs.50
Partition  
i) Partition among family members1% on the market value of the property (subject to a maximum of Rs.25,000 for each share)1% (subject to a maximum of Rs.4,000 for each share.)
ii) Partition among non-family members4% on the market value of the property for separated shares1% on the market value of the property for separated shares
ii) General Power of Attorney to sell the immovable property (Power is given to family member)Rs. 100Rs.1,000
iii) General Power of Attorney to sell the movable property and for other purposesRs.100Rs.50
iv) General Power of Attorney given for consideration4% on Consideration1% on consideration or Rs.10,000, whichever is higher
Settlement  
i)In favour of family members1% On the market value of the property (not exceeding Rs.25,000)1% on the market value of the property (subject to a maximum of Rs.4,000)
ii) Other Cases7% on the market value of the property4% on the market value of the property

 

In order to enhance the transparency in the process of property registration in Chennai.Guideline value of the property irrespective of the price the property was last registered on in the survey number, payment of registration fee online, and a grievances cell through which the public can file complaints through multiple channels such as email, WhatsApp, and mobile phone.

  • Payment of registration fee to be made from the registrant’s bank account.
  • If online payments can’t be done by the registrant, e-seva counters would assist them in the transaction.
  • Stamp duty and registration fee would be paid at nationalised banks.
  • Registration to be done on plain paper without the requirement for physical stamp papers.
  • Payment of stamp duty can be made in part by bank transfer online and the remaining part by purchasing stamp papers.
  • Guideline value of a property to be used instead of the last registered value of a property in a specific survey number.
  • Issue documents on the same day to minimise pending documentation.
  • Email address and contact numbers of the grievance cell to be displayed in all the sub-registrar offices.

If you have decided to purchase a property in Chennai, then apart from the cost of the property, you also need to consider the stamp duty and registration charge. These two separate fees will add to the effective price of the property and need to be calculated beforehand.

First, let us take a look at the stamp duty and registration fee that one will have to pay in Chennai. Unlike other states, the area in which the property is purchased, be it rural or urban, does not matter. The stamp duty and registration fee to be paid is the same, throughout Chennai. Similarly, there is no distinction in charges for men and women.

Also, remember that here, the market value of the property refers to the guideline value that is the decided by the government. This value depends on the zone where the said property lies.

Let us understand stamp duty and property registration charges clearly with the following example:

Amit bought a property in Chennai with a guideline value of Rs. 20 lakh. He will have to pay the following charges:

  • Registration fee – 1% of Rs. 20 lakh, that is Rs. 20,000
  • Stamp duty – 7% of Rs. 20 lakh, that is Rs. 1,40,000

Hence, the effective cost of the property comes to Rs. 1,60,000.

For a resale property, is there any registration charge to be considered?

Yes, registration charge for a resale property is 1% of market value or the agreement value of the property. The stamp duty that will be levied on the same is 7 percent.

What is the procedure for property registration in Chennai?

In order to successfully register your property in Chennai, the following are the steps that one should follow:

  • A thorough Inspection of the Property: Before entering into a property sale agreement or price negotiation, it is advisable to inspect the property carefully and perform due diligence with the help of a lawyer whose expertise lies in property transactions.
  • Sale Deed Preparation: Once due diligence has been performed, the agreement of sale must be prepared. It must be drafted on a stamp paper whose value depends on the property registration charges. It can be prepared either by advocates or by licensed document writers.
  • Registration of the Property: In Chennai, the property must be registered within four months of the execution of the agreement of sale. So, once the property has been purchased, the next step is to pay the stamp duty and the relevant registration charges in Chennai. The property must be registered at the Registrar/Sub-Registrar’s office of the jurisdiction where the property was purchased.

Where to Pay Stamp Duty and Registration Charges in Chennai?

As mentioned earlier, the stamp duty and registration charges need to be paid at the Registrar/Sub-Registrar’s office of the jurisdiction where the property was bought.

The way to go about paying the aforementioned charges in Chennai is with the help of non-judicial stamp papers, which can be found at the offices of Sub-Registrar.

One can also pay stamp duty online, through E-stamping facility. Simply visit the official website of Stock Holding Corporation of India Limited (SHCIL) at http://www.shcilestamp.com/ and follow the instructions to obtain an e-stamp.

You can make the payment for the same through NEFT/RTGS or cash/DD deposit at the relevant SHCIL branch in Chennai.

Documents Required for Property Registration in Chennai

In order to successfully register the property with the Registrar, the following documents are needed:

  • Signed stamp duty/receipt that states that the stamp duty has been duly paid
  • PAN card
  • An identity proof such as PAN card, driving license, voter ID, passport, Aadhaar card, et cetera, for the executant and the claimant
  • An identity proof, provided by the witnesses
  • Two passport size photographs; to be carried by both the parties
  • No Objection Certificate (NOC), if applicable
  • No due certificate/Tax clearance certificate
  • Relevant property documents such as sale deed/conveyance deed/power of attorney, et cetera.
  • Pattadar passbook

The process of registering a property can be a fairly complicated process, especially if one does not know how to go about it. It is recommended to get in touch with a lawyer who specialises in the field of property transactions and understand the intricacies of the process. Alternately, one can also contact the builder to know the procedure for paying stamp duty and registration charges in Chennai.

FAQ

1. How are stamp duty and registration charges calculated in Chennai?

Stamp duty and registration charges in Chennai is calculated based on the market value of the property.

2. What is stamp duty and registration charges in Chennai?

In Chennai, stamp duty rate is 7 percent of the market value of the property. While property registration charge in the metropolitan city is 1 percent of the value of the property.

3. How is stamp duty calculated in Tamil Nadu?

Stamp duty is calculated based on the market value or the consideration value of the property, whichever is higher. So, if the value of the property is Rs.60 lakh, the charge will be 7% of Rs.60 lakh.

 4. How are property registration fees calculated?

The property registration fees is calculated on the market value of the property. In case, the property’s value is Rs.50 lakh, the registration fee is 1 percent of Rs.50 lakh.

5. What is the stamp duty for rental agreement in Tamil Nadu?

The stamp duty charge for rental agreement in Tamil Nadu is usually 1 percent of rent + deposit amount. This is irrespective of the lease term.

Here’s a look at the latest stamp duty charges in Tamil Nadu and how it impacts your property purchase

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Among Indian states, stamp duty charges on property transactions are quite high in Tamil Nadu. This means, when you buy a property in the state, you will need to reserve a significant amount towards the mandatory stamp duty and registration charges.

Stamp duty is the fee that you are liable to pay to the authorities, in order to register a property under your name. Registration charges are paid to the same authority for doing all the paper work to execute this process.

Let us discuss the monetary implications of this on a home buyer in Tamil Nadu, in detail.

Stamp duty and registration charges for various documents in TN

Document typeStamp dutyRegistration fee
Conveyance (Sale)7% of the market value of the property4% of the market value of the property
Gift7% of the market value of the property4% of the market value of the property
Exchange7% of the market value on the property that has the greater value4% of the market value on the property that has the greater value
Simple mortgage1% on the loan amount, subject to a maximum of Rs 40,0001% on the loan amount, subject to a maximum of Rs 10,000
Mortgage with possession4% of the loan amount1%, subject to a maximum of Rs 2,00,000
Agreement to saleRs 201% on the money advanced (1% on total consideration if possession is given)
Agreement relating to construction of building1% on the cost of the proposed construction or the value of construction or the consideration specified in the agreement, whichever is higher1% on the cost of the proposed construction or the value of construction or the consideration specified in the agreement, whichever is higher
CancellationRs 50Rs 50
Partition among family members1% on the market value of the property, subject to a maximum of Rs 25,000 for each share1%, subject to a maximum of Rs 4,000 for each share
Partition among non-family members4% on the market value of the property for separated shares1% on the market value of the property for separated shares
i) General Power of Attorney to sell the immovable propertyRs 100Rs 10,000
ii) General Power of Attorney to sell the immovable property (Power is given to a family member)Rs 100Rs 1,000
iii) General Power of Attorney to sell the movable property and for other purposesRs 100Rs 50
iv) General Power of Attorney given for consideration4% on the consideration1% on the consideration or Rs 10,000, whichever is higher
Settlement in favour of family members1% on the market value of the property but not exceeding Rs 25,0001% on the market value of the property, subject to a maximum of Rs 4,000
Settlement in other cases7% on the market value of the property4% on the market value of the property
Partnership deed where the capital does not exceed Rs 500Rs 501% on the capital invested
Partnership deed (other cases)Rs 3001% on the capital invested
Memorandum of Deposit of Title Deeds0.5% on loan amount, subject to a maximum of Rs 30,0001% on loan amount, subject to a maximum of Rs 6,000
i) Release among family members (coparceners)1% on the market value of the property but not exceeding Rs 25,0001% on the market value of the property, subject to a maximum of Rs 4,000
ii) Release among non-family members (co-owner and benami release)7% on the market value of the property1% on the market value of the property
Lease below 30 years1% on the total amount of rent, premium, fine, etc.1%, subject to a maximum of Rs 20,000
Lease up to 99 years4% on the total amount of rent, premium, fine, etc.1%, subject to a maximum of Rs 20,000
Lease above 99 years or perpetual leave7% on the total amount of rent, fine, premium of advance, if any, payable.1%, subject to a maximum of Rs 20,000
Declaration of trust (if property is there, it would be considered as sale)Rs 1801% on the amount

Source: Registration Department, TN

Note: Stamp duty is always shown in percentage terms. The stamp duty amount is a specific percentage of the property transaction value. This means that if the buyer has purchased the property for Rs 50 lakhs, he has to pay 7% of Rs 50 lakhs as the stamp duty in Tamil Nadu. He has to pay another 4% of Rs 50 lakhs as the registration charge. So, the buyer will have to keep 11% of Rs 50 lakhs, to pay these state duties.

Stamp duty and registration charges for women in Tamil Nadu

While most states offer some sort of rebate if a property is registered in the name of a woman, this is not the case in Tamil Nadu. In Tamil Nadu, men and women have to pay the same stamp duty and registration charge. In contrast, women home buyers in national capital Delhi pay 4% stamp duty as against the 6% stamp duty that a man has to pay here.

See also: All about Guideline Value in Tamil Nadu

 

How is stamp duty in Tamil Nadu calculated?

A property buyer must pay stamp duty in Tamil Nadu as determined by the state government. Stamp duty is charged on the ready reckoner rate / circle rate (also called guideline value in Tamil Nadu) or consideration value of the property, whichever is the higher value.

If the agreement value of a residential property is Rs 50 lakh and the guideline value is Rs 40 lakh, the stamp duty will be calculated on the higher value, that is, Rs 50 lakh.

The stamp duty one is required to pay depends by several factors. That includes the property’s market value, type of property and the number of floors, property location, intended usage (whether residential or commercial), and age of the property. 

Stamp duty, registration charges’ impact on final property price

Let us examine how to calculate the impact of stamp duty and property registration charges on the final property price : 
Suppose Gokul bought a property in Chennai that has a guideline value of Rs 40 lakhs. He will have to pay the following charges:

  • Registration fee: 4% of Rs 40 lakhs = Rs 1,60,000
  • Stamp duty: 7% of Rs 40 lakhs = Rs. 2,80,000

Hence, the effective cost of owning this property comes to Rs 44.40 lakhs. 

Registration charge for a resale property

The registration charge for a resale property is 1% of market value or the agreement value of the property. The stamp duty that will be levied on the same is 7%.

How to pay stamp duty online in Tamil Nadu?

The payment of stamp duty and registration charges in Tamil Nadu can be done online, via the e-stamping facility. Stock Holding Corporation of India Limited (SHCIL) is the central record keeping agency (CRA) appointed by the central government for granting e-stamp certificates in the country.

One can visit the SHCIL website and get information on transactions that require stamping and the addresses of collection centres. One will have to fill an application form at an ACC (Authorised Collection Center). The form must be submitted along with payment for the stamp certificate.

The various modes of paying stamp duty in the e-stamping system, include NEFT, RTGS, pay order, demand draft, cheque, cash and account to account transfer. One should reach out to the nearest e-stamping centre before initiating an electronic fund transfer.

Also read: What is e-stamping and how is it done?

TN stamp duty and registration charges: Latest news

Tamil Nadu government plans to boost revenue through property registrations after COVID-19 second wave

August 9, 2021: State minister for commercial taxes and registration, P Moorthy, recently conducted a review meeting with registration officials, to discuss opportunities to increase revenue through property registrations, after the second wave of the Coronavirus pandemic. Revenue to the tune of Rs 10,643 crores was recorded during April 2020 to March 2021 through stamp duty and registration fees.

Tamil Nadu may allow property registrations on auspicious days

With an aim to garner more revenue, the Tamil Nadu government may allow property registrations on three days considered auspicious in the Tamil calendar. So far, sub-registrar offices in Tamil Nadu are closed on these days. The days that the state is considering to allow property registration on, include Thai Poosam and Aadi Perukku. However, those registering property on these days may have to pay extra.

TN govt may make registrations compulsory for joint ventures

The registration and finance departments of Tamil Nadu are discussing the feasibility and modalities of reducing the registration fee for joint ventures (JVs) in the state. Currently, 75% to 80% of the residential and commercial projects in the state are undertaken as JVs. However, with the registration charges being as high as 11% of the guideline value, these are not registered. So far, registration of the JVs was not mandatory. To encourage registrations, the authorities are considering bringing down the fee to 2% of the guideline value. It will also become mandatory to register JVs, therefore, making it legally binding.

This change would require an amendment to the Registration Act, 1908, which, in turn, requires the union government’s assent. The idea behind this move is to ensure healthier revenue for the state government.

Property registrations in Chennai amid COVID-19

During the early part of 2020, owing to the Coronavirus pandemic and the resultant lockdown, property registrations saw a dip. However, starting August 2020, sales did see an uptick and this is evident through the revenue generated from property registrations in August, which amounted to Rs 793 crores. Sources also suggest that 17,000 more registrations were clocked this year in August, as against the same period in 2019.

“Plotted developments and land parcels in and around Chennai moved faster, comparatively,” says T Balabhaskar, a local real estate contractor, adding that sales suffered on the whole, owing to restrictions on inter-state travel and rising cases of COVID-19. Local brokers are also hopeful that actual sales will pick up, given that enquiries on ground have increased. Prospective home buyers have been enquiring about price benefits, cash discounts and customised packages and see an opportunity to invest, in spite of the pandemic.

Check out properties for sale in Chennai.

In May 2020, the registration department of TN clarified that new and ready-to-occupy flats and buildings will not need to pay stamp duty and registration fees. This was applicable only on the first sale of the property and only the undivided share of land (UDS) would be subjected to stamp duty and registration charges and not the super built-up area.

Record-high registrations in October 2020

On October 29, 2020, the registration department witnessed an all-time high registration of 20,307 documents with 575 sub-registrar offices. The sale of stamp duty and registration fees on the day brought in Rs 123.35 crores. October had been a good month for the department with earnings clocked at Rs 1,096 crores.

Will Tamil Nadu reduce stamp duty?

Industry body Confederation of Real Estate Developers’ Association of India (CREDAI) has said that it has discussed the possibility of stamp duty reduction in a high-level meeting chaired by the state’s deputy chief minister, O Panneerselvam. The state and its economy, which were heavily hit after the floods that devastated the livelihoods of many in 2015, was dealt a further blow in 2020 following the COVID-19 pandemic. Therefore, the industry body feels that to provide some relief to prospective home buyers, the authorities must act soon.

“From 11% (both stamp duty and registration charges), we have requested for a reduction to 5% stamp duty and 1% registration charge permanently and as a short-term measure, we have asked reduction to 4% stamp duty and 1% registration charge till March 31, 2021,” said S Sridharan, CREDAI chairman, Tamil Nadu chapter.  Only time will tell whether the state government will give its nod.

FAQ

Is it mandatory to register property in Tamil Nadu?

Yes, as per the Registration Act, 1908, it is mandatory to register your property.

Where can I pay stamp duty in Chennai?

You can either pay the stamp duty at the registrar/sub-registrar’s office or avail of the e-stamping facility.

What are the documents required for registration of property?

You will need the stamp duty receipt, your PAN card, government ID proofs of all parties, including the witnesses, two passport-sized photographs, NOC, no dues certificate, sale deed, POA, pattadar passbook, etc.

Can I pay stamp duty by credit card in Tamil Nadu?

The Department of Registration in Tamil Nadu takes initiatives such as equipping registrar offices with facilities like PoS (Point of Sales) devices and enable citizens to pay their property registration charges using debit cards or credit cards.

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