Makaan Sauda

Costs, Taxes and 2026 Rules

Property buying and selling costs in India: every charge, who pays it and the 2026 rules

A complete map of the costs in an Indian property deal: stamp duty, registration, brokerage, GST, TDS, capital gains tax and transfer charges, split by buyer and seller.

Updated · 6 min read

Property buying and selling costs in India: every charge, who pays it and the 2026 rules

In an Indian property deal, the buyer usually pays stamp duty and registration fees to the state (roughly 5–9% of value in most large cities), GST of 5% on an under-construction flat (1% for affordable housing), the broker's commission with 18% GST, legal fees and society transfer charges. The buyer also deducts 1% TDS from the price when it is ₹50 lakh or more. The seller pays their own brokerage, clears any loan and society dues, and pays capital gains tax on the profit, at 12.5% for property held over 24 months. This guide maps every charge and links to a detailed guide on each.

All amounts below are illustrative. Rates come from state notifications and the Finance Acts, so check them against the official sources listed at the end.

Costs at a glance: buyer versus seller

CostPaid byPaid toTypical basisDetailed guide
Stamp duty (plus any cess)Buyer (by custom and most state laws)State government% of the higher of price and circle rateStamp duty and registration by state
Registration feeBuyerState registration department% of value, often capped, or a flat feeSame
GSTBuyerBuilder, who pays the government5% or 1% effective, under-construction onlyGST on under-construction flats
BrokerageEach side that hires a brokerBrokerOften 1–2% + 18% GST (market practice)Broker commission
TDSDeducted by buyer from the priceIncome Tax Department, on the seller's account1% for residents from ₹50 lakhTDS on property purchase
Capital gains taxSellerIncome Tax Department12.5% on long-term gain; slab rate if short-termCapital gains tax on sale
Society transfer fee, NOC, mutationUsually buyer, sometimes splitSociety, municipalitySet by bye-laws or local rulesHidden transfer costs
Advocate and title searchEach side for its own advocateAdvocateFlat fee, agreed in advanceTitle and encumbrance

Custom can shift some of these. Who bears the stamp duty, for example, can be changed by agreement in most states, but in practice the buyer pays it almost everywhere.

Charges set by the state: stamp duty and registration

Stamp duty is levied under the Indian Stamp Act, 1899 as amended by each state, or under the state's own stamp act, such as the Maharashtra Stamp Act or the Karnataka Stamp Act. A sale of immovable property worth ₹100 or more must be made by a registered instrument under the Transfer of Property Act, 1882 and the Registration Act, 1908. You therefore cannot avoid these charges without losing the legal protection of registration.

Three things decide the amount:

  • The value. Duty is charged on the higher of the price in the deed and the government's minimum value for the property. That minimum is called the ready reckoner rate, circle rate or guidance value.
  • The rate. This varies by state, by area (municipal, rural, metro cess zones) and sometimes by buyer. Delhi, for example, charges women a lower rate.
  • The registration fee. Some states cap it, as Maharashtra does at ₹30,000 for higher-value deeds. Others charge a full percentage; Karnataka's registration fee went up to 2% in August 2025.

For under-construction flats, some states charge duty on the registered agreement for sale and give credit for it on the final conveyance. The agreement for sale versus sale deed guide explains this.

Central taxes: GST, TDS and capital gains

GST applies only to construction services: an under-construction flat bought from a builder before the completion certificate is issued. Its effective rate is 5% without input tax credit, or 1% for affordable housing that meets the carpet area and ₹45 lakh tests. Resale flats and completed flats carry no GST on the price. Brokerage, legal services and society maintenance above set thresholds do carry 18% GST.

TDS is not an extra cost. It is part of the price that the buyer pays to the government instead of the seller, and the seller then claims it as tax already paid. The buyer's obligation is real, though: miss it and the buyer faces interest, a late fee and a demand. From 1 April 2026 the deduction falls under section 393 of the Income-tax Act, 2025, which replaced section 194-IA.

Capital gains tax is the seller's main cost on a profitable sale. Property held for more than 24 months is long-term and taxed at 12.5% without indexation, plus surcharge and 4% cess. For property bought before 23 July 2024, resident individuals and HUFs may choose 20% with indexation instead. Reinvesting in a house (Section 54) or specified bonds (Section 54EC) can reduce the tax. See saving capital gains tax.

How much to budget: a quick illustration

Illustrative purchase of a ₹1 crore resale flat in a city where stamp duty is 6% and registration is capped at ₹30,000:

  • Stamp duty: ₹1,00,00,000 × 6% = ₹6,00,000
  • Registration: ₹30,000
  • Brokerage at 1% + 18% GST: ₹1,00,000 + ₹18,000 = ₹1,18,000
  • Advocate, title search and drafting: ₹20,000 (illustrative)
  • Society transfer charges: ₹25,000 (illustrative)
  • Total on top of the price: ₹7,93,000, about 7.9%

The buyer also deducts ₹1,00,000 TDS and pays it to the government, so the seller receives ₹99,00,000 directly. On the seller's side, a ₹1 crore sale with 1% + GST brokerage costs ₹1,18,000 before capital gains tax. The full line-by-line versions are in the buyer's total cost example and the seller's net proceeds example.

What changed by 2026

  • Income-tax Act, 2025 in force from 1 April 2026. The rates and the ₹50 lakh TDS threshold carried over, but the section numbers and forms changed. Form 26QB was replaced by a unified challan-cum-statement, and the seller's certificate formerly called Form 16B was replaced too. Most bank and broker material still uses the old numbers, so match by description, not by section number.
  • Capital gains rates since 23 July 2024. Long-term gains are taxed at 12.5% without indexation, with the grandfathering option described above.
  • TDS with several buyers or sellers since 1 October 2024. The ₹50 lakh test applies to the total consideration, not to each person's share.
  • GST rate revision of 22 September 2025. Residential construction rates were left unchanged.
  • State changes. Registration fees and circle rates are revised by state notification, often at the start of a financial year. Karnataka's 2025 registration fee rise is one example.

The guides in this section

FAQ

Is stamp duty paid by the buyer or the seller?

By custom and under most state laws, the buyer pays it unless the parties agree otherwise. In practice almost every residential sale agreement puts stamp duty and registration on the buyer.

Are these costs tax deductible?

For a buyer under the old tax regime, stamp duty and registration on a residential house can count towards the deduction for principal repayment, which is capped at ₹1.5 lakh, in the year you pay them. For everyone, these costs and the brokerage you paid form part of the cost of acquisition. That reduces the capital gain when you later sell.

Do I pay GST and stamp duty on the same flat?

Yes, on an under-construction flat from a builder. GST is a tax on the construction service and stamp duty is a tax on the transfer document. They are separate levies.

How long does the whole process take?

A resale purchase with clean title typically moves from token to registration in four to eight weeks. Title checks, the seller's loan closure and the society NOC are the usual causes of delay.

Sources

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