Purchasing a home means you have to pay stamp duty, a compulsory government tax levied on all property transactions. As mentioned in the Indian Stamp Act of 1899 under Section 3, the stamp duty documentation also works as proof of purchase and holds evidentiary value in the eyes of the Indian judiciary.
Stamp duty is a major part of your property investment. It is usually charged on the registered price or ready reckoner rate of the property. The reckoner rate is the minimal price the government gives to transact property registration in Delhi.
Stamp duty in Delhi is charged as a specific percentage of the assessed or agreed value of the property, whichever is more.
Factors that impact stamp duty in Delhi
The major factors affecting stamp duty in Delhi are given below:
- Location of the property: The property location marks the rate of levies. The price in some locations of Delhi may be higher than the others; hence properties in location X are levied at higher stamp duty rates than properties in location Y.
- Property's age: The stamp duty for ancient properties in Delhi has low stamp duty than the modern ones. The reason is that stamp duty is charged on the property's value, and the lower price of old Delhi properties calls for low stamp duty.
- Purpose: The stamp duty in Delhi is also determined if the property will be used for residential or commercial purposes.
- Gender: Lastly, the registration and stamp duty in Delhi rates also differ depending on the age and gender of the property owner.
Stamp duty charges in Delhi
- If the property is owned jointly by a male and female, the stamp duty rate is 5%
- If the property is owned by a female, the stamp duty rate is 4%.
- The stamp duty rate is 6% if a male owns the property.
Stamp duty rates in Delhi depending on the location:
- Properties under the Delhi Cantonment Board charge a 3% stamp duty for males and females.
- Properties under the New Delhi Municipal Corporation charge a stamp duty of 3.5% on females and 5.5% on males.
Paying the complete stamp duty amount on time is essential to ensure a smooth home purchase experience. However, the high property cost in Delhi makes it difficult for people to buy their property in one go, thus making people choose options like home loans.
However, the lenders in Delhi charge different interest rates in Delhi. Usually, the private home loan interest rate in Delhi begins from 8.4% p.a. onwards for a loan on 90% of the property value for 30 years. Most banks offer home loan facilities, too, at a lower interest rate. Kotak Mahindra Bank offers home loan interest starting at 8.75% for 25 years for 90% of the property's value. The bank also offers a balance transfer facility to current home loan borrowers at reduced interest rates. The bank waives the processing fee for online home loan applications.
Eligibility criteria for home loans in Delhi
- The applicant's age should be a minimum of 21 years up to 70 years at the time of the loan's maturity.
- Applicant should for a resident of India, NRI, or PIO.
- The applicant should have a work experience of three years, whether self-employed or salaried.
- The applicant should have a CIBIL score of 750 and above to increase their chances of availing home loans at reduced rates of interest.
Documents needed for a home loan in Delhi
If you're a salaried person, you may need:
- KYC documents such as Adhaar card, PAN card, driving license
- Proof of your income, such as bank statements for the past six months or ITR Forms-16
- Property documents
- Employment letter/ contract
- Processing fee cheque
If you're a self-employed person, you may need:
- Your business documents
- Income proof: ITR of the last three years
- Recent Form 26AS
- The balance sheet of your company for the past three years
- Bank account statement for the past six months, current and savings
Tips to enhance your eligibility for a home loan amount
- You can file for a home loan with a co-applicant like your wife. With your spouse's monthly income added to yours, your home loan approval chances get higher, and the eligible loan amount also increases.
- You can go for longer loan tenures to enhance your loan eligibility.
- You can also add your parents as co-applicants and apply for a home loan.
The home loan interest rates vary depending on several factors. Find out the best home loan offered by the banks in Delhi and then apply cautiously.
