A common question many homebuyers ask is whether stamp duty needs to be paid twice, once at the time of the Sale Agreement and again during the Sale Deed registration.
The answer is no, stamp duty is not paid twice. Instead, it is paid in two stages:
- 5% at the time of Sale Agreement (if the agreement is registered or used for a home loan), and
- The remaining applicable stamp duty at the time of Sale Deed registration.
UNDERSTANDING THE SALE AGREEMENT
The Sale Agreement outlines the terms and conditions agreed upon between the buyer and seller. It acts as a safeguard for both parties and provides clarity during the entire transaction from negotiation to possession.
If you choose to register the Sale Agreement, buy a e-stamp paper or adjudicate the Sale Agreement, you are required to pay stamp duty of 0.5% on the higher of:
- the sale consideration, or
- the government guidance value of the property.
Example:
Let’s consider a real case:
- A client was purchasing a residential property in Bangalore.
- Agreed purchase price: ₹1,28,00,000
- Government guidance value: ₹57,15,000
- Since the sale price is higher, stamp duty was calculated on ₹1,28,00,000.
The client applied for a home loan of ₹80,00,000 from ICICI Bank. As part of the loan process, the bank required a Sale Agreement.
We executed the Sale Agreement and adjudicated it at the Sub-Registrar Office.
Stamp Duty Paid: Rs.1,28,00,000 × 0.5% = Rs.64,000
Below is the adjudication certificate for reference, where the stamp duty of Rs.64,000 is highlighted.
The bank processed the loan application based on this agreement, and the loan was sanctioned within 20 working days.
UNDERSTANDING THE SALE DEED
The Sale Deed is the final legal document that formally transfers ownership of the property from the seller to the buyer. It must be registered at the Sub-Registrar Office, and the buyer is responsible for paying the applicable stamp duty and registration charges.
In Bangalore, the stamp duty on the Sale Deed is 5% of the consideration or guidance value, whichever is higher.
CONTINUING THE SAME EXAMPLE:
Earlier, we paid Rs 64,000 as stamp duty for the Sale Agreement. While registering the Sale Deed, this amount was adjusted (denoted) from the total payable stamp duty.
The denoted amount was mentioned in the Sale Deed application, refer to image below
After denotation, our Stamp Duty for Sale Deed registration is Rs. 6,52,800, we paid this stamp duty and highlighted the same in below sale deed for your reference
KEY TAKEAWAYS
- Stamp duty is not paid twice, it is split between the Sale Agreement and the Sale Deed stages.
- If you’re registering the Sale Agreement or using it for a home loan, 0.5% stamp duty is payable upfront.
- This amount is adjusted from the total payable stamp duty during Sale Deed registration.
- In Bangalore, Sale Deed stamp duty is typically 5% of the sale consideration or guidance value, whichever is higher.
Need assistance with Sale Agreement and Sale Deed registration?
Please write to us:
- Email: pgnproperties@gmail.com
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