A Construction Agreement is a contract between the builder and the buyer. It describes the rights, duties and obligations of both parties in their dealings with each other. The contents of the Agreement may vary based on the nature of the project, but generally, the Construction Agreement should contain the following:
Stamp duty and registration charges are mandatory costs, which every buyer has to pay while planning to buy his apartment or property. Currently in Bangalore, one has to pay 5 per cent of the registered value of the property as stamp duty. In addition, there is a 10 per cent cess and 2 per cent surcharge on stamp duty. Therefore, buyers have to pay 5.6 per cent stamp duty in urban areas and 5.65 per cent in rural areas as the surcharge in such areas is 3 per cent. The Registration Charge is 1 per cent of the total or registered property value.
In Bangalore, different classification of buildings apply different factor while calculation the Stamp Duty and Registration Charges.
Sl No |
Type of Property |
Standards /Factors used |
1 |
Multi-Storeyed Apartments |
Super Built up Area is used for calculating the Stamp Duty. |
2 |
Plots |
The Square footage is multiplied by the guidance value of the Area |
3 |
Independent Houses |
The total constructed area is considered while calculating the total property value |
The guidance value is the minimum value at which a property can be registered. This value differs from area to area within Bangalore. These charges are primarily dependent on the existing market rate of the property, the expansion of the city limits and the property market performance.
Let us take the instance of a property, which measures 2,400 sq. ft. in an area in Bangalore where the guidance value is Rs. 5,000 per sq. ft. Hence, The Saleable Value of this property = 2400 x 5000 = Rs. 120,00,000 Registration charges = 1 per cent of 120,00,000 = R.s 1,20,000 Stamp duty in Urban areas = 5.6 per cent of 120,00,000 = Rs. 6,72,000
Stamp Duty and Registration Charges in Bangalore are paid through the Karnataka State Department of Stamp Duty and Registration. Stamp duty can be paid through the following means:
Bangalore’s Local Planning Area is conceptually into three main ‘rings’ for the consideration of zoning and regulations. The inner core of the city falls under the purview of the Bruhat Bengaluru Mahanagara Palike (BBMP). Land in the second ring falls under the purview of the Bangalore Development Authority (BDA), and land belonging to the outer ring is the concern of the Bangalore Metropolitan Region Development Authority (BMRDA).
For layouts, BDA is the plan-sanctioning authority for all areas under the purview of the BBMP as well as the BDA. The BBMP itself has no powers to sanction layout plans but can sanction the construction of apartments, individual houses and commercial buildings. BBMP administers and collects property tax for properties falling under the jurisdiction of the BBMP.
The BMRDA, through its five Local Planning Authorities (LPA) namely, Nelamangala, Kanakapura, Magadi, Anekal and Hoskote along with Ramanagara-Channapatna Urban Development Authority (RCUDA), Bangalore International Airport Area Planning Authority (BIAAPA) and Bangalore Mysore Infrastructure Corridor Area Planning Authority (BMICAPA), are the plan-sanctioning authorities for all properties falling in the outer ring.
BIAAPA deals with the ‘island’ containing the airport along with parts of Bangalore North, Devanahalli and Doddaballapur. The BIAAPA is a plan-sanctioning authority concerning land use only around the airport. The organization primarily focusses on the operation of the airport and the flight paths of aircrafts before sanctioning any land development plans in that area.
BMICAPA is the plan sanctioning authority for areas that are in the Bangalore Mysore Infrastructure Corridor. This corridor includes parts of Kengeri, Uttarahalli and Yeshwanthpura.
All lands falling beyond the jurisdiction of the BMRDA are considered as rural areas, and such areas come under the purview of the Directorate of Town and Country Planning (DTCP).
Panchayat-sanctioned layout or apartment plans are not valid for properties developed within the jurisdictions of the BBMP, BDA, BMRDA, BIAAPA, or BMICAPA; these plans are valid only if the land in question lies outside BMRDA limits, and then such properties come under the town and country planning authority, i.e. DTCP.
A Khata is a mandatory legal document or certificate issued by Bruhat Bengaluru Mahanagara Palike (BBMP) to property owners in Bangalore. This document is essential when licensing the property for trade or for applying for a loan from any Bank or financial institution. However, having a khata does not confer ownership of the property on the individual in whose name the khata is registered. The Khata contains all the details of the property like the name of the owner, the size of the building, location of the property and all other details that are required while filing your property tax. It is an identification for property owners who are liable to pay property tax to the concerned authority.
From property owner’s viewpoint, the main purpose of the Khata document is that it contains an assessment of the amount of property taxes the owner must pay BBMP. From BBMP’s perspective, the purpose of the Khata is to record the amount of property taxes that may be received for the property. It also identifies the party who is primarily responsible for paying the property taxes.
The Khata Extract contains the amount of property taxes that must be paid on the property. This Extract also contains the following details of the property:
A Khata and B Khata denote the two types of khatas that exist under BBMP. The concept of khata came into effect in 2007 after BBMP was formed to simplify the collection of property taxes in Bangalore.
BBMP started maintaining two registers to maintain the property taxes. The first register was called A Khata, which contained the list of the fully legal properties in Bangalore. A second register called B Khata was maintained to contain the list of illegal or semi-legal properties in Bangalore.
Property that conforms to all building byelaws and government regulations are issued a Khata A certificate. The possession of A Khata document enables property owners to apply for building licenses, trade licenses, building plan approvals, and avail bank loans on the property. An A Khata certificate is also required if the owner wants to get involved in any kind of financial transaction involving the property.
B KhataA ‘B Khata document is issued in the following cases:
In all these cases, BBMP has issued Khata B as a way to bring these properties into Government’s records and charge property taxes. Having a B Khata document does not allow property owner to apply for licenses from the government or avail loan from banks or financial institutions. However, having a B Khata on a property will not prevent the property from being sold or bought by people.