The Tamil Nadu government has announced a significant relief measure for homebuyers purchasing new apartments, flats, villas, row houses, or villaments for the first time. The state has approved a mechanism to set off stamp duty and registration fees already paid on construction agreements against the final composite sale deed value.
Key Details of the Relief Order
This new policy is designed to prevent double payment of government levies. Under the order, buyers registering a composite sale deed for the first sale of a property can deduct the stamp duty and registration fees they have already paid on a previously registered construction agreement for the same building. The relief applies specifically to composite sale deeds registered on or after December 1, 2023, where the corresponding construction agreement was registered on or before November 30, 2023.
The move directly addresses concerns that emerged after the state aligned its registration process with the Real Estate (Regulation and Development) Act, 2016 (RERA). This alignment introduced the registration of composite sale deeds, which cover both the undivided share of land and the building. While the 2023 policy brought clarity, it left buyers who had already paid stamp duty on earlier construction agreements facing the prospect of a second payment.
Implementation and Official Stance
An official from the registration department explained that the set-off mechanism was created in response to requests from buyers and the Confederation of Real Estate Developers' Associations of India (CREDAI). The proposal was put forward by Dinesh Ponraj Oliver, Inspector General of Registration, and has received government approval.
The relief covers both stamp duty under the Indian Stamp Act, 1899, and registration fees under the Registration Act, 1908. The Inspector General has issued directives to all registering officers, district registrars, and deputy inspectors general across Tamil Nadu to implement the order with immediate effect and ensure its uniform application.
Developer Reaction and Critique
While the relief is welcomed by the real estate sector, developers have pointed out that the announcement comes later than ideal. A developer representative stated that the industry had been advocating for this measure for the past two years. They argued that many homebuyers who paid stamp duty and registration charges on construction agreements years ago have likely already completed their final registrations under financial pressure, such as servicing EMIs, and thus cannot benefit from this retrospective relief.
The developer added, "For them, this is a clear loss. The government should have announced this measure when the composite value system was first introduced." Despite the criticism, the order is expected to provide substantial financial relief for current and future homebuyers in Chennai and across Tamil Nadu, streamlining costs associated with property registration and boosting confidence in the regulated market.
