On December 1, 2023, the Tamil Nadu State Government came out with a Circular, dispensing with the traditional dual agreement model which mandated a separate sale deed for the undivided share of land and a construction agreement for the built-up area. This conventional model has been replaced with a single instrument i.e. sale deed based on the composite value of both the undivided share of land and the superstructure, aligning with the practise prevailing in other States.
Further, the said Circular outlines a revised fee structure ostensibly proposing a ‘reduction’ of stamp duty and registration fee for the first sale of flats, while in reality, the proposed revision would cost the prospective homebuyers (except with respect to flats valued below Rs.50,000.00) more.
In order to understand the implications of the Circular and its cascading or rippling effects better, we have undertaken a numerical comparison between the earlier fee structure and the revised one as outlined below: –
It appears that the revised composite model would result in a substantial increase in stamp duty and registration fees which the prospective homebuyers need to be mindful of.
The new Circular does away with the dual agreement model and introduces revised stamp duty rates for the first sale of flats. It appears that the revised composite model would result in a substantial increase in stamp duty and registration fees which the prospective homebuyers need to be mindful of.