• The government charges stamp duty when the title of any property transfers to the buyer from the seller
• It is a fee collected by state governments upon the documents needed for property registration.
• Stamp duty and registration charges differ across states
• Payment of stamp duty is compulsory for property registration as per Section 3 of the 1899 Indian Stamp Act
• States take this charge for validating your agreement for property registration. The document with the stamp duty payment tag is legal proof of ownership over the property
• You cannot legally claim any property as your own without payment of stamp duty and property registration

Stamp duty on commercial properties  

Stamp duty is a dynamic aspect, varying across states, depending on multiple factors. Commercial properties attract higher stamp duties as well.

Commercial property stamp duty rates are dynamic and subject to changes and may vary from one transaction to another.

Factors influencing stamp duty costs

• Property age (older buildings will have lower stamp duty while newer buildings will have higher stamp duty)
• Owner’s age (stamp duty will be subsidized for senior citizens)
• Owner’s gender (women get rebates on stamp duty and registration charges in many states)
• Commercial buildings need more floor area, amenities, security, etc. This leads to higher duties being charged
• Location will determine the market value and stamp duty
• The government may also charge stamp duty for various amenities present at any property

How to calculate stamp duty costs? 

• Consider the total market value of the commercial property. It is the determinant of stamp duty. The higher the value, the more your stamp duty outgo and vice versa. If you know both the market and agreement values, the higher of the two is chargeable
• Stamp duty authorities mostly use the ready reckoner for fixing property values. It is published by state governments every year
• You can calculate stamp duty online by using a calculator. Enter information about the property like the state, and market value, among others
• You can also calculate property registration fees for your state. Add surcharges and cess for arriving at the total amount for registration
• If you cannot calculate the amount online, visit your nearest property registrar’s office for this purpose

It is mandatory to pay stamp duty and registration charges whenever you purchase commercial property. Find out the applicable stamp duty and registration rates for properties in your chosen locality, and keep this amount aside beforehand. It will help you stay prepared since commercial real estate usually involves sizable investments.