NOIDA: Property buyers are up against the Uttar Pradesh government’s move to charge stamp duty fee on execution of a sale agreement. It came as the state is making it mandatory for buyers to pay 6% of builder-buyer cost in stamp duty fee at the agreement signing stage, even before the apartment or shop is ready for use and the registry that transfers the ownership right is executed.
Buyers contend that the move is unjust and needs to be postponed instead of making it compulsory for property buyers to pay the fee in stamp duty.
“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,” said Anu Khan, president, Noida Extension flat owners and members association, who are planning to protest against the move, adding: “Why should we pay the stamp fee in advance even when the wait for an apartment or other kinds of property that one intends to buy may be endless.”
Homebuyers say that there are thousands of cases, where they bought the property from a developer through registered agreement and also paid the stamp fee but are yet to get the ownership of the unit.
Under the old norms, the buyers sign an unregistered agreement to sale with the developer for a unit without payment of any stamp duty over the total cost of the builder-buyer agreement. They pay 5% total property cost as stamp duty charges when the flat is ready to move and registry is executed.
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In October, the Noida, Greater Noida, and Yamuna expressway industrial development authorities made it mandatory for property buyers in new realty projects to pay 5% of total agreement cost in stamp duty fee, and register the agreement to sale signed between a builder and a buyer detailing the terms and conditions for both the parties.
Earlier, the buyer was neither supposed to pay any stamp duty fee nor had an obligation to register it at the government office.
Legal expert advocate Sunil Kumar Mishra said that the state government’s move is more focused on recovering the revenue instead of protecting the rights of the property buyers.
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Manoj Kumar Singh, chief secretary, Uttar Pradesh, said, “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, said, “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.”
Confederation of real estate developers association of India (CREDAI), a realtors’ group, said the move will crush the positive sentiment in the real estate market. “The state government must stop this new directive from implementation because it will not benefit any party in the realty sector,” said Dinesh Gupta, secretary, CREDAI.
