Tamil Nadu levies one of the highest stamp duties and registration fees among Indian states. With 7% stamp duty and 4% registration fees, TN is far ahead of most states and falls behind just Bihar, which levies 16% charges. Kerala and Puducherry follow TN closely behind with 10% registration charge.
Many states have taken the progressive route and brought down registration cost, partly to push administrative reforms and mostly to attract investment. Total cost of registration is as low as 5% in some states like Assam, Himachal Pradesh and Odisha. Neighbouring Karnataka levies 5.6% stamp duty and 1% registration fees, Telangana levies 6% and Andhra Pradesh 7.5%.
Some states like Assam and Union territories like Delhi and Puducherry have different rates for male and female categories. Assam levies 4% stamp duty and 1% registration fees on women and 5% stamp duty and 2% registration fees on men. Delhi and Puducherry also levy less charges on women.
Ironically, even with a high registration charge, Tamil Nadu recorded 21% increase in registration revenue and 16% increase in the number of registered documents last financial year, according to the documents presented in the assembly earlier this week.
“High stamp duty and registration fees may be a dampener for growth in Tamil Nadu,” said a Chennai-based developer.
Registration is the second highest source of revenue for Tamil Nadu after Tasmac and the state obviously does not want to lighten its pocket by slashing stamp duty and registration fees.
“The problem is that the government is looking at the sector only from the revenue point of view. The government needs to realise that by reducing the rates, it will encourage more transactions and give an impetus to the economy. Buoyancy in economy will ensure better growth and revenue,” said a senior bureaucrat.
High registration cost is pushing many people to take the power-of-attorney route instead of doing registration of property deeds. For instance, in the affordable housing segment, when a buyer buys an apartment for Rs 3,000 per sq ft, about Rs 150 is spent on registration cost per sq ft. It works out to roughly 5% of the cost of the apartment. If one factors in the registration cost incurred by the developer while purchasing the land for development, the overall outgo towards registration of the property works out to more than Rs 200 per sq ft for the end buyer, said a developer.
The Centre has been pushing the affordable housing segment with incentives like reduced GST (1%) and income tax exemption for developers. It is high time the state too looked at bringing down cost of affordable housing.
