A Home Loan, which is also sometimes known as a House Loan or a Housing Loan, is an amount of money that the purchaser of a residential property borrows from a financial institution like a bank or a housing finance company. As in the case of any other loan, interest is payable on this loan, but there are also other charges and fees that may apply. An important component of purchasing a home is paying stamp duty, which is a tax levied on documents when transfer of the title of a property occurs. This fee is usually levied by the state government and thus the charges of stamp duty also vary from state to state. Apart from the Stamp Duty, registration charges are also applied by the state. If you are a home buyer in Mumbai, you should be aware of the following with respect to Stamp Duty and registration charges.
Stamp Duty and registration charges in Mumbai
In Mumbai, Stamp Duty is levied under the Maharashtra Stamp Duty Act. An extra 1 per cent duty is applicable in Mumbai compared with the rest of the state. This additional duty was levied on Mumbai in order to fund various infrastructural projects. Stamp Duty charges in Mumbai are 6 per cent, while registration charges are 1 per cent.
Overview of Stamp Duty in Mumbai
The location of the property is the prime determinant of how much stamp duty would be levied by the state. Here is how stamp duty in Mumbai is levied:
|Area||Stamp Duty in Mumbai||Registration Charges in Mumbai|
|Within Municipal Limits||6% of the market value||1% of the market value|
|Within limits of Municipal Council/Panchayat/Cantonment of any area within MMRDA||4% of the market value||1% of the market value|
|Within Gram Panchayat Limits||3% of the market value||1% of the market value|
Factors that affect Stamp Duty and registration charges
Stamp Duty registration are levied by the state governments on home buyers. These are applicable on both freehold and leasehold land (agricultural and non-agricultural) as well as other type of properties such as houses, flats or commercial properties. There are some factors that determine how much Stamp Duty in Mumbai and registration would be payable:
1. Market value:
Market value of the property and area of the property are taken into consideration for calculating Stamp Duty charges.
2. Type of property:
Stamp Duty charges are also determined by the type of property. For example, Stamp Duty is higher on commercial property than on residential property.
Properties in municipal localities and urban areas are charged a higher Stamp Duty; while rural properties in panchayat areas are charged a lower rate of stamp duty.
How to pay Stamp Duty in Mumbai?
In Mumbai, payment of Stamp Duty and registration fee to the Department of Registration and Stamps can be done through the Government Receipt Accounting System (GRAS) of the Government of Maharashtra. Users would need to provide their Permanent Account Number (PAN) as well as the PAN of the second party and all the details of the property on the GRAS portal. E-payment as well as payment across bank counter (cash/cheque) can be made using the website. You can either register on the website and pay or even pay without registration. Select ‘Citizen’ under ‘Type of User’, then click on ‘Make Payment to Register your Document’. You will be given the option to pay only Stamp Duty or Stamp Duty and registration fee together. Click on the selection of your choice. You will then be asked to fill in details such as district, office under which you want to register your document, the kind of document (sale agreement, gift deed, etc.), payment amount, property details, property value and so on.
When you take a Home Loan, you should factor in the charges for both Stamp Duty and registration as these would make up a significant component of your home cost. Payment of these charges has been simplified and can be done online, which has given a boost to transparency as well as ease of purchasing property.