The Municipal Corporation of Delhi (MCD) has acted on their proposal of a transfer duty hike on properties above Rs 25 lakh. Effective from July 10, 2023, a one percent increment on the transfer duty has been announced. Hence, the Delhi government’s Department of Urban Development has taken a step to ensure that the MCD’s income remains steady. However, as transfer duty is borne by the buyer, even a one percent increase will add to the post-purchase expenses like stamp duty, registration charges, and their respective Goods and Services Tax (GST) charges.
Know your neighbourhood well
What is the revised transfer duty in Delhi?
Given below is the updated transfer duty on properties above Rs 25 lakh in Delhi-
| Latest transfer duty rates in Delhi | ||
|---|---|---|
| Transfer Duty | Old Rates | Revised Rates |
| For male homebuyers | 3% | 4% |
| For female homebuyers (including third gender) | 2% | 3% |
Source: Secondary sources
How will the revised transfer duty impact homebuyers?
As the hike in transfer duty will not change for properties with a registered value of less than Rs 25 lakh, those opting for affordable properties within the stated limit will not be impacted by the revised duty. But for properties in Delhi valued over Rs 25 lakh, buyers will incur a little extra charge. For instance, a property worth around Rs 1 crore will incur a net increase of just Rs 1 lakh in transfer duty. As per officials, the transfer duty has not been increased in the last decade, and the corporation has the right to levy up to five percent transfer duty. Keeping that in mind, a one percent hike is not expected to impact the homebuying budget significantly.
Why has the transfer duty been increased?
The civic corporation of Delhi relies heavily on transfer duty as a primary source of income. The hike, which has been under proposal for over a year has been implemented to address the ongoing financial crisis across the North, South and East MCDs. Also, the move is expected to bring uniformity in policy formulation. According to reports, the increase will help bring an additional Rs 1,000 crore revenue annually. Currently, the MCD earns a transfer duty of around Rs 2,000 crore every year.
Could the article help you understand the topic?
Will the transfer duty hike stagnate the realty landscape of Delhi?
There is no doubt that the hike in transfer duty will increase the transaction cost of property in Delhi; however, experts believe that the overall realty market may not feel a major pinch because of this announcement. The real estate landscape of Delhi is expected to adjust smoothly to the new policy change in the time to come.
With the transfer duty undergoing revision in Delhi, it is hoped that the property transactions continue at their steady pace. Further, it is also hoped that the MCD takes the necessary steps to maintain its financial health.
See our latest webstory on Check out latest Transfer duty rates in Delhi
