Homebuyers in Noida and Greater Noida will now face higher costs due to changes in the property purchase process. As per the Uttar Pradesh government’s new rules, buyers must pay 6% stamp duty and 1% registration charges after making a 10% down payment on the property. While the move aims to increase transparency, it is creating financial challenges for buyers and builders alike.
What’s Changing in the Property Purchase Process?
The Uttar Pradesh government has mandated the registration of builder-buyer agreements after buyers pay 10% of the property’s cost. The key changes include:
- Stamp Duty and Registration Charges: Buyers must pay 6% stamp duty and 1% registration charges upfront.
- No Clarity on Refunds: In case the property deal is canceled, it’s unclear whether these charges will be refunded, leading to concerns about potential financial losses.
Buyers Face Increased Financial Burden
Previously, buyers could delay paying stamp duty and registration charges until the project was complete. This allowed them to manage finances more flexibly. Under the new rules:
- Buyers will need to arrange a significant amount of money at the start, which can be difficult for middle-class families.
- The additional costs may force many potential buyers to postpone their home purchase plans, reducing the overall demand in the market.
Challenges for Middle-Class Families
The increased upfront costs are particularly tough for middle-income families. For a property costing ₹50 lakh:
- A buyer would need ₹5 lakh for the down payment.
- An additional ₹3.5 lakh would be required for stamp duty and registration charges.
Such a large financial outlay early in the process may deter many middle-class buyers from investing in property in Noida and Greater Noida.
Builders Also Bear the Brunt
The new rules are not just tough on buyers but also create challenges for builders:
- Builders must ensure timely registration of every sale agreement, increasing their administrative and financial burden.
- These added responsibilities could delay project completion and increase overall costs.
How Other States Handle It
In states like Haryana and Maharashtra, the initial registration charges are much lower, ranging from ₹1,000 to ₹10,000. Buyers in these states only pay major charges after the project is completed, offering financial flexibility and reducing pressure on builders.
In comparison, the 6% stamp duty and 1% registration charges in Uttar Pradesh make the property purchase process far more expensive and cumbersome.
Lack of Refund Policies Adds to Concerns
One of the biggest concerns for buyers is the lack of a clear refund policy. If a property deal is canceled, buyers may lose the money paid as stamp duty and registration charges.
With around 15-20% of bookings typically canceled due to various reasons, this lack of clarity could significantly weaken buyer confidence.
Impact on the Real Estate Market
The new rules are likely to:
- Reduce demand in Noida and Greater Noida as buyers may prefer states with lower upfront costs.
- Increase project costs for builders, making properties more expensive.
- Create delays in project completion due to administrative hurdles, leading to dissatisfaction among buyers.
The added financial and procedural burden could slow down real estate activity in these regions, potentially impacting market competitiveness.
