On June 14, the state government has increased the fee chargeable on intimation of mortgage to 0.5% of the loan amount as against a nominal charge of Rs1,000 earlier. Though an upper limit of Rs15,000 has been maintained, yet even for a loan of Rs10 lakh the buyer has to shell out Rs5,000 as intimation fee. This is five times more than the earlier rate.
Mortgage intimation has to be done at the registrar of properties office if a loan has been taken for the purchase. This is to disclose that there is bank or financial institution’s mortgage on the property. The objective is to prevent fraud.
This is expected to hit the sentiments, especially among buyers of middle level properties, say financial consultants providing services for availing loans.
Now not only the stamp duty is back to the earlier rate, but there is an additional burden on the home buyers. Even if the mortgage intimation fee has been capped at Rs15,000, the amount is substantial for the fixed income home buyers, who already struggle to arrange funds, says Deepak Trivedi, a financial consultant who provides home loan services.
The average cost of a home comes at around Rs40 lakh in the city. Generally, buyers borrow up to Rs30 lakh to fund the purchase, said Trivedi.
A home worth Rs40 lakh attracts basic stamp duty of Rs2.40 lakh at 6%. Then there is registration fee, which is 1% of the amount or Rs30,000 whichever is higher. Both the components take the duty amount to Rs2.70 lakh in case of a Rs40 lakh property. The rate of mortgage deed that was 0.2% earlier has been increased to 0.3% from April. This adds another Rs9,000, taking it to Rs2.79 lakh in all.
The latest addition is in the fee payable on intimation of mortgage of property. For a loan of Rs30 lakh, it comes to Rs15,000 which is the maximum payable.
“Suppose the loan is Rs20 lakh, it comes to Rs10,000, which is a substantial amount for a small or mid ticket home buyer,” explained Trivedi.
From December 31, 2020, the stamp duty is back to the earlier level of 6% from 3% in September last year. The duty cut was done to ease purchases during the Covid times. The plan was to gradually bring it back. Now not only the duty is back to the original level, there is an additional burden as well, he said.
Anil Nair, former president of Nagpur branch of Confederation of Real Estate Developers Association of India (CREDAI), said costs have increased even as the market is yet to recover.
Even the development charges have been hiked to 4% from 2% earlier. Now the increase in mortgage intimation fee can further dampen the sentiment, he said.