After two decades, Tamil Nadu has revised its stamp duty and registration fee structure under the Registration Act, 1908. The changes, announced in Press Release No. 1337 dated 8 July 2023, include increases in fees for power of attorney, construction agreements, partition deeds, release and settlement deeds, and leases. These changes significantly affect developers, homebuyers, and individuals involved in property and financial transactions. This blog breaks down the amendments and outlines their implications for each key instrument and transaction type.
Background
The Tamil Nadu government, through a press release issued on 8 July 2023, implemented significant changes to the registration fees and stamp duty for services governed by the Registration Act, 1908. These changes followed proposals in the 2023 Budget, which included reducing the registration fee on conveyance of properties from 4% to 2%, while restoring the 2012–2017 guideline value. This effectively increased stamp duty and registration costs for buyers.
Section 78 of the Act empowers the state to revise the fee schedule for services like document registration, register searches, and translations. Major changes include shifting from fixed rates to value-based charges, especially for power of attorney (POA) agreements and construction contracts. These changes impact both real estate developers and buyers.
Key Highlights of the Amendment
Changes in Duty and Fees on Key Transactions/Instruments
1. Power of Attorney (POA)
- Family Member: No change in stamp duty; registration fee increased from ₹1,000 to ₹2,000
- Non-Family Member: Registration fee now 1% of market value (earlier flat ₹10,000)
- With Consideration: No change in stamp duty (4%); revised registration fee is the higher of ₹2,000, 1% of consideration, or 1% of market value
Impact on Developers/POA Holders:
Developers obtaining land through POA from landowners will now face higher upfront costs. A property valued at ₹100 crore could now cost ₹1 crore in registration alone, compared to the previous ₹10,000 cap.
2. Construction Agreement
- Stamp duty remains unchanged
- Registration fee increased from 1% to 3% of the construction value or cost
Impact on Customers:
Homebuyers in Tamil Nadu will bear increased costs, as the total levy on construction agreements now stands at 4%, doubling the earlier cost.
3. Partition Deed (Within Family)
- Stamp duty cap raised from ₹25,000 to ₹40,000 per share
- Registration fee cap increased from ₹4,000 to ₹10,000 per share
4. Release Deed (Including Family Release)
- Stamp duty cap increased from ₹25,000 to ₹40,000
- Registration fee cap raised from ₹4,000 to ₹10,000
5. Settlement Deed (Within Family)
- Stamp duty cap increased from ₹25,000 to ₹40,000
- Registration fee cap raised from ₹4,000 to ₹10,000
Impact on These Transactions:
The cap for these deeds has been significantly raised, increasing total costs for intra-family property transfers. For example, a ₹29,000 transaction now costs up to ₹50,000, a 72% rise.
Note: “Family” for these purposes includes father, mother, spouse, children, siblings, and grandchildren.
6. Dissolution of Partnership (Within Family)
- Stamp duty cap increased from ₹25,000 to ₹40,000 per share
- Registration fee cap raised from ₹4,000 to ₹10,000 per share
Impact on Firms/Partners:
Although not compulsorily registrable, the document must be stamped for court admissibility. Cost increased by ₹15,000 in stamp duty and ₹6,000 in registration. Dissolutions by non-family members continue to attract 8% stamp duty.
7. Lease Agreements
- For leases less than 30 years: registration cap doubled from ₹20,000 to ₹40,000
- No change in stamp duty
Impact on Lessees:
Tenants entering long-term leases will face higher registration costs, even though stamp duty remains constant.
Change in Rate for Other Instruments
| Instrument | Stamp Duty (Old) | Stamp Duty (New) | Registration Fee (Old) | Registration Fee (New) |
| Sale Certificate (Court/Govt) | 8% | No change | 1% of auction price | 2% of auction price |
| Sale Certificate (Bank/Liquidator) | – | 2% of market value | – | 4% of market value |
| Deposit of Title Deeds | 0.5% (max ₹30,000) | No change | 1% (max ₹6,000) | 1% (max ₹8,000) |
| Mortgage Without Possession | 1% (max ₹40,000) | 1% (max ₹50,000) | 1% (max ₹10,000) | 1% (max ₹15,000) |
| Security Bond | ₹80 | No change | 1% (max ₹10,000) | 1% (max ₹15,000) |
| Non-Monetary Documents | – | ₹100 | ₹1,000 | – |
| Receipts, Duplicates, POA Attestations, and Others | – | Various nominal rates (₹10–₹200) | Increased across categories |
These updated rates apply to multiple document types, significantly increasing compliance costs.
Our Comments
These revised stamp duty and registration fees apply to all transactions executed on or after 10 July 2023. The state’s objective appears to be curbing undervalued property transactions and enhancing transparency, especially in developer–landowner agreements using POA.
However, these revisions substantially raise transaction costs for both developers and homebuyers. The 2% hike in construction agreement fees alone is expected to impact property affordability in Tamil Nadu.
