If you are looking to buy property in Karnataka, it is important to understand the concept of stamp duty. Stamp duty is a tax levied on legal documents and is payable under the Indian Stamp Act, 1899. In this guide, we will discuss everything you need to know about stamp duty in Karnataka, including its rates, exemptions, and recent changes.
What is Stamp Duty in Karnataka?
Stamp duty is a tax that is levied on legal documents, such as property registration documents, power of attorney, and agreements. The tax is payable to the state government at the time of document registration or execution. Stamp duty is calculated as a percentage of the property value or the transaction value, whichever is higher.
Stamp Duty Rates in Karnataka
The stamp duty rates in Karnataka vary depending on the type of document and the value of the property. The stamp duty rates for property transactions in Karnataka are as follows:
- Sale deed – 5% of the property value
- Gift deed – 3% of the property value
- Mortgage deed – 0.1% of the loan amount (up to Rs. 10 lakhs) + 0.2% of the loan amount (above Rs. 10 lakhs)
- Release deed – 5% of the property value
- Power of attorney – Rs. 200 per document
- Agreement to sell – 0.1% of the consideration amount or Rs. 5000, whichever is highe
Stamp Duty Exemptions in Karnataka
There are certain exemptions available on stamp duty in Karnataka. These exemptions are provided to encourage certain activities and to benefit certain sections of the society. Some of the common stamp duty exemptions in Karnataka are:
- Stamp duty exemption for women – Women who are the sole owners of a property or co-owners of a property with other women are eligible for a 2% stamp duty exemption.
- Stamp duty exemption for senior citizens – Senior citizens who are above 65 years of age are eligible for a 50% stamp duty exemption on registration of a property. This exemption is applicable only for self-acquired property.
- Stamp duty exemption for low-income group – Individuals belonging to the low-income group and having a total annual income of less than Rs. 3 lakhs are eligible for a 50% stamp duty exemption on registration of a property. This exemption is applicable only for self-acquired property.
Senior Citizen Loan Against Property
Senior citizens who own a property can avail of a loan against it to meet their financial requirements. The loan amount can be used for various purposes such as medical expenses, home renovation, or to meet any other financial obligations. Loan against property is a secured loan, which means that the loan is backed by collateral in the form of the property.
The eligibility criteria for a senior citizen loan against property may vary from one lender to another. However, some common eligibility criteria include:
- The applicant should be a senior citizen, i.e., above 60 years of age.
- The property offered as collateral should be owned by the applicant.
- The property should be free from any encumbrances or disputes.
- The loan amount offered is usually a percentage of the property value, ranging from 60% to 75%.
Some of the benefits of a senior citizen loan against property are:
- Lower interest rates compared to unsecured loans.
- Longer repayment tenure, which can go up to 15 years.
- Flexibility in the loan amount and repayment tenure.
- Easy documentation and processing.
In 2020, the Karnataka government announced a reduction in the stamp duty rates for property transactions. The stamp duty rates were reduced from 5% to 3% for properties valued between Rs. 21 lakhs and Rs. 35 lakhs. For properties valued above Rs. 35 lakhs, the stamp duty rates were reduced from 5% to 5.6%. This reduction in stamp duty rates was aimed at boosting the real estate sector in the state and encouraging property purchases.
Apart from this, the Karnataka government also announced a reduction in the stamp duty rates for women and senior citizens. Women who are the sole owners of a property or co-owners of a property with other women are eligible for a 2% stamp duty exemption. Senior citizens who are above 65 years of age are eligible for a 50% stamp duty exemption on registration of a property. This exemption is applicable only for self-acquired property.
In addition to the above changes, the Karnataka government has also introduced an e-stamping system for payment of stamp duty. The e-stamping system has made stamp duty payment more convenient and efficient. The system allows for online payment of stamp duty and generation of e-stamps, which are tamper-proof and can be easily verified.
Conclusion
In conclusion, stamp duty is an important tax that needs to be paid when buying or selling property in Karnataka. It is important to understand the rates and exemptions of stamp duty to avoid any legal complications. Senior citizens who own a property can also avail of a loan against it to meet their financial requirements. The recent changes to stamp duty rates and the introduction of the e-stamping system have made stamp duty payment more convenient and efficient.
