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3 Things You Didn’t Know About Stamp Duty

By Author: Aishwarya Mahurkar
Total Articles: 291

When it comes to purchasing home or land related property, there are plenty of costs that is associated with it. Stamp duty is one such cost that one must be aware of. Different states and territories in the country have levied different stamp duty as a form of tax and revenue collection. Therefore, when it comes to purchasing property in any of these different locations, one must understand the workings of this kind of tax and how it is applicable to an individual. Let us take a look at a few factors most individuals do not know about this tax:

Reasons for the existence of stamp duty

One of the main reasons for the existence of the stamp duty, is to indicate a legal hold over any property help by an applicant. It makes it easier for ownership to be passed onto another home owner or property owner as it is recognized by the government. It is not uncommon for conflicts to arise depending on the ownership of the land. In such cases, it is only the stamp holding duties that provide the ideal evidence to indicate the ownership. The documents that possesses this tax duty can be used in the court of law as the aforementioned evidence. Thus, any person who holds a stamped document has the right to claim legal ownership of the property or the land over it.

Amount applicant would need to pay

The amount one would need to pay as stamp duty is not the same for all locations. Additionally, the value of this tax does not depend on the state the applicant purchase in. This tax solely depends on the sliding scale. The value for this tax is calculates as per a fixed percentage which is calculated on the sale of the property. In other words, the applicant may have to pay a large amount of funds as stamp tax if the property that one has purchased has a high value.

Stamp duties on property of residents

One would need to pay this tax depending on the location and purchase of the property. Most states categorize the value of this stamp tax based on the purchase value of the property. However, in most cases, the minimum value of this tax is paid at 1%. Any other property is paid at 2% and more. Normally, non – residential property like commercial property is often categorized under the 2% property tax, without any regard to the value of the purchase price.

Stamp duty is often calculated at the end of a purchase deal. A solicitor normally calculates the right amount of stamp duty one would need to pay during the purchasing process. One must be aware of this process and how the value is calculated, to ensure that one remains protected financially as well as legally.

Author Bio :

The author is a seasoned writer on finance topics and she articulates aspects that are important to people availing the home loan facility. She writes about a variety of topics covering the home loan documents, rates & the uses of stamp duty that help to make the best decision.

Total Views: 129Word Count: 519See All articles From Author

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