Stamp Duty And Its Relevance in Home Loan

Stamp duty is a land tax that needs to be paid by the borrower while buying a property. It is a state-level tax and varies from one state to another. The stamp duty is generally calculated as a percentage of the property’s value and is usually a substantial amount.

When talking about home loans, the stamp duty is an essential aspect that needs to be taken into consideration. For instance, if we take a home loan of 50 lakhs, the stamp duty can range from 1% — 7% depending on the state’s regulations. The stamp duty is usually paid when the property is registered in the borrower’s name.

Important Updates About Stamp Duty Charges

Additionally, it is important to note that stamp duty charges will differ for a new property compared to an old one. The government may offer exemptions for some categories, such as first-time homebuyers or for properties in rural areas.

Stamp duty is also relevant when it comes to the loan amount. As the stamp duty charges can be substantial, some borrowers might want to include this amount in their home loan, which can result in an increase in their total loan amount. Hence, it is crucial to keep this in mind while calculating the overall cost of taking a home loan.

Furthermore, it is essential to remember that the stamp duty charges aren’t only applicable for taking a home loan, but also for transferring property ownership. In case of property transfers, the stamp duty can range from 3% to 7% depending on the state’s regulations.

Conclusion

In conclusion, paying stamp duty charges is an indispensable part of taking a home loan. It is crucial to read and understand the state’s regulations before proceeding with the loan application to avoid any unwarranted surprises. While borrowers can include the stamp duty charges in their loan amount, it is always better to keep them separate to avoid paying unnecessary interest charges.