Property buyers stands against the imposition of Stamp Duty fee in UP

The Uttar Pradesh government's decision to impose a stamp duty fee upon the completion of a sale agreement has angered real estate buyers. It happened as the state mandated that buyers pay 6% of the builder-buyer cost in stamp duty at the time of agreement signing, even before the store or apartment is ready for occupancy and the registry that transfers ownership rights is completed.

Instead of requiring property buyers to pay the stamp duty levy, buyers argue that the move is unfair and should be delayed.

Homebuyers claim that there are thousands of instances in which they paid the stamp fee and purchased the property from a developer under a registered agreement, but they have not yet received possession of the unit.

In the past, buyers would sign an unregistered contract with the developer to sell a unit without paying any stamp duty on the entire builder-buyer agreement price. When the apartment is ready to move into and the registry is completed, they pay stamp duty, which is 5% of the total cost of the property.

The industrial development authorities of Noida, Greater Noida, and Yamuna expressways mandated in October that buyers of real estate in new developments pay a stamp duty fee equal to 5% of the total agreement cost and register the sale agreement between a buyer and a builder that outlines the terms and conditions for both parties.

In the past, the buyer was not required to register it at the government office or pay any stamp duty fees.

Anu Khan, President, Noida Extension Flat owners & members association says, “We have objected to the state government’s new move and written to Noida and Greater Noida authorities including the state government. Paying the stamp fee at the time of signing the agreement to sale benefits only the government that wants to collect the revenue and puts financial burden on buyer, even before the apartment or a shop is ready to be used by a consumer”.

Similarly, Manoj Kumar Singh, Chief Secretary, Uttar Pradesh states, “We have brought this practice to protect the rights of the home-buyers as there were cases where the realtors found selling one apartment to multiple buyers with unregistered agreement to sale. We do not understand why buyers object to this move.”

Vandana Tripathi, Additional Chief Executive Officer, Noida Authority notes, “If any buyer will buy property in a new realty project without paying 5-6% stamp duty of builder-buyer agreement cost then we will not acknowledge it. We will acknowledge a sale in new projects only if the buyer pays the stamp fee.”