Buying a home can be counted as one of the biggest financial decisions of your life. What is the key for pulling through without denting your finances? The answer lies in thorough preparation. The first step, of course, is choosing a suitable home loan. This will help you to buy the house that meets your needs. Yes, home loans have to be repaid over a long period. But there are other charges that you have to take care of. Among these are the home loan stamp duty and registration charges that one needs to know:
Getting Familiar with the Terms
Stamp duty is a tax that the state government levies when you buy or sell a house. The tax rate varies in different states of India. So, if you are buying a house in Kolkata, you must know about the stamp duty in West Bengal.
Once you choose the property, you have to get it registered in your name. You must do this within four months of paying the stamp duty. This establishes your ownership of the land or house. The registration fee too can differ in different states of India.
What makes Stamp Duty Necessary?
When the ownership of a property is transferred, the agreement between the two parties needs to be validated. This is done through a stamp issued by the government which has separate charges. Once you pay the stamp duty, the deal is enlisted in the list of property transactions kept by the government. In case of any dispute, the stamp secures your claim over the property.
Stamp Duty— West Bengal Rates
If you are buying a home for under Rs.25 lakh in corporation areas in Kolkata or Howrah, then you will be charged 6% stamp duty. In case of a house that costs more than Rs.25 lakh, the rate is 7%. Similar rates apply for houses at areas notified under corporation or municipalities.
For other areas, the rates are 5% for properties that cost under Rs.25 lakh and 6% for properties above Rs.25 lakh.
You can use a stamp duty calculator to know the exact amount you have to pay as stamp duty.
Paying Stamp Duty
The most common method of paying stamp duty is by using a non-judicial stamp paper. The agreement is either written by hand or printed. You can buy the stamp paper from an authorised vendor. After you have paid the duty through a financial company, the seller puts a stamp on the papers. This validates your claim on the property. The stamp duties are exacted on each transaction and not on each person.
What Happens if the Payment is Delayed?
In case of a delayed payment you are usually charged at a rate of 2% each month. So, it is ideal that you pay the duty up front while signing the agreement.
Registering the Property
Now that you have chosen your dream house, it is time to register it. You have to pay the registration fees within four months of the transaction. It is exacted at the rate of 1% on the value of the property. So, if you buy a house in Kolkata for Rs.20 lakh, the stamp duty payable by you would be Rs.1.2 lakh. The registration fee would be Rs.20,000.
It is important that you pay heed to these charges while planning your housing finance. While you choose a property and apply for a home loan you should also take these charges into account.