When buying a property, transfer of ownership is a very important procedure. This is one where you need to pay close attention and make sure everything has been completed as per the rules set by the governing authority.
A crucial step while transferring ownership of a property from the seller to the buyer is paying the closing costs. Closing costs refer to the final costs, excluding the price of the property, that need to be paid to purchase the property. This can include home loan processing fees, stamp duty, and property registration charges.
If you’re planning to buy a new property in Chennai, your closing costs of stamp duty and the registration charges will be set by the state of Tamil Nadu. According to the Tamil Nadu Stamp Act 2019, every property-related transaction, i.e. sale, lease, or rent, requires the payment of stamp duty charges in the state of Tamil Nadu.
Since Chennai is located in Tamil Nadu, it is also amongst one of the Indian cities with high stamp duty and registration charges. Due to this, CREDAI Chairman Sridharan requested to reduce the stamp duty and registration charges in Tamil Nadu to help citizens during the pandemic.
Paying your stamp duty and registration charges are vital to the legal transfer of ownership of the property. These documents will then be admissible in court against any claims of ownership or other disputes and encumbrances that might arise in the future.
Not paying stamp duty or registration charges on any property related transactions are also punishable by the law in India. Fines and penalties are levied for the late payment or non-payment of the same.
Stamp Duty and Registration Charges in Chennai
Unlike most Indian cities, Chennai doesn’t have varying stamp duty on the basis of the location of the property. Whether the zone your property is located in is classified as rural or urban, you will have to pay the same stamp duty on it as the rest of the city of Chennai.
The following is the breakdown of the applicable Stamp Duty and Registration Charges all across Chennai.
Category | Stamp Duty | Registration Charges |
Sale | 7% on the property’s market value | 4% on the property’s market value |
Gift | 7% on the property’s market value | 4% on the property’s market value |
Exchange | 7% on the property’s market value of the property with higher value | 4% on the property’s market value of the property with higher value |
Simple Mortgage | 1% of loan amount (maximum Rs. 40,000) | 1% of loan amount (maximum Rs. 10,000) |
Mortgage with possession | 4% of loan amount | 1% of loan amount (maximum Rs. 2,00,000) |
Agreement to Sale of Property | Rs. 20 | 1% of total consideration in case of possession |
Agreement related to building construction | 1% of the cost of the proposed construction value or consideration (specified in the agreement or whichever is higher) | 1% of the cost of the proposed construction value or consideration (specified in the agreement or whichever is higher) |
Cancellation Charges | Rs. 50 | Rs. 50 |
Stamp Duty and Registration Charges in Chennai In The Event Of Partition Of The Property
The partition of the property refers to when two or more individuals that share the ownership of the property decided to divide it amongst themselves. It is done by dividing the assets by each party which has a legal right as it applies to them.
The following are the stamp duty and registration charges in the event of the partition of property in Chennai.
Category | Stamp Duty | Registration Charges |
Partition among members of the family | 1% on the property’s market and maximum of Rs. 25,000 pe share | 1% and maximum of Rs. 4,000 per share |
Partition among non-members of the family | 4% on the property’s market in case of separated shares | 1% on the property’s market in case of separated shares |
Transfer of General Power of Attorney, to members of the family, to sell an immovable property | Rs. 100 | Rs. 1,000 |
Transfer of General Power of Attorney to sell a movable property and for other purposes | Rs. 100 | Rs. 50 |
Transfer of General Power of Attorney for consideration | 4% on the consideration | 1% on the consideration or Rs. 10,000 (whichever is higher) |
Stamp Duty and Registration Charges in Chennai In The Event Of Settlement
The Settlement Deed is a written or oral agreement. It is legally binding by nature. In case the Settlement Deed is oral, one only needs to pay stamp duty charges on it. In the case of a written Settlement Deed, the document needs to be stamped as well as registered.
The following are the stamp duty and registration charges on Settlement Deeds in Chennai.
Category | Stamp Duty | Registration Charges |
In favour of the members of the family | 1% on the property’s market value under Rs. 25,000 | 1% on the property’s market value (maximum Rs.4,000) |
In other cases | 7% on the property’s market value | 4% on the property’s market value |
How to Register Your Property In Chennai
The process of registering your property in Chennai is a three-step procedure:
1. Property Inspection
A home inspection allows the buyers to take a proper look at what issue the property might have. This is necessary to protect oneself legally as it allows you to walk out of a sale agreement in case of major discrepancies.
2. Sale Deed
The next step is to prepare the sale deed or the purchase contract. A sale deed is to protect all the stakeholders involved in the sale of a property. It sets the foundation for how the sale needs to be executed and divides the responsibilities and liabilities across all the parties involved. You can get the sale deed written up by the lawyers of either the buyer or the seller.
3. Registering The Property
According to the Tamil Nadu Stamp Act 2019, a property in Chennai must be registered within the next four months. The property must be registered at the office of the Registrar or the Sub-Registrar of the zone where the property was purchased.
Also read: The ultimate guide to applying for government housing in Chennai