Transfer duty on purchase of properties in Delhi above Rs 25 lakh hiked by 1%

The powers of the MCD House and the standing committee have been entrusted in the special officer.The civic official said the proposal will be sent to the government for implementation.However, another senior MCD official said the civic body has the power to impose a transfer duty of up to five per cent, and the corporation does not require any approval from the government on this.Transfer duty collection is done by the sub-registrar in the government so it has to be implemented by them.

Buying property in Delhi is set to get expensive as the unified Municipal Corporation of Delhi has decided to hike the transfer duty by 1 per cent on properties priced above Rs 25 lakh across the city, official sources said on Wednesday.

Officials said after the hike, the transfer duty will be four per cent for men and three per cent for women buyers.

The move is aimed at improving the financial health of the municipality which has been hit severely in the past years especially due to the COVID-19 pandemic. It is the first major decision after the three civic bodies were unified last month.

The decision was taken at a meeting on Tuesday where a proposal to increase the transfer duty was moved.

The proposal was passed by the special officer of the Municipal Corporation of Delhi (MCD) who has been entrusted with the power to run the civic body till a new House is elected.

''A proposal was moved before the special officer in capacity of the standing committee to hike transfer duty on properties priced above Rs 25 lakh by 1 per cent. The proposal was approved by the SO (special officer). After the hike, transfer duty will be four per cent for men and three per cent for women,'' the sources told PTI.

Currently, the transfer duty on sale and purchase of property in the national capital is three per cent for men and two per cent for women buyers.

An MCD official said a approval at the level of the standing committee has been given and another formal House-level approval will also be provided.

The standing committee is the highest decision-making body of the MCD. The powers of the MCD House and the standing committee have been entrusted in the special officer.

The civic official said the proposal will be sent to the government for implementation.

However, another senior MCD official said the civic body has the power to impose a transfer duty of up to five per cent, and the corporation does not require any approval from the government on this.

''Transfer duty collection is done by the sub-registrar in the government so it has to be implemented by them. But as per the DMC Act, it is the independent power of the civic body to increase it,'' the official said.

In September 2020, the erstwhile South Delhi Municipal Corporation (SDMC) had approved a similar proposal to increase the transfer duty but it was stuck with the city government.

The hike in transfer duty comes against the backdrop of the poor financial condition of the civic body as it has been struggling to even pay salaries of employees.

The move will increase revenue and strengthen MCD's coffers which will be used for overcoming the financial challenges and providing best services to the people, officials said.

The authorities said the hike in transfer duty will affect only those buyers who are to purchase properties having a registered value above Rs 25 lakh.

Properties are divided into eight categories A, B, C, D, E, F, G and H, and the Delhi government collects stamp duty on sale and purchase of these properties.

Posh and upscale colonies fall in the category of A and B such as Golf Links, Vasant Vihar, Sunder Nagar and Jor Bagh. Middle-income group neighbourhoods fall in the C and D category areas which include localities like Lajpat Nagar, Alaknanda, Bhogal, Amar Colony, among others.

Localities such as Geeta Colony, Anand Parbat, Seikh Sarai fall in E, F, G and H category areas.

Civic officials said transfer duty is collected in addition to the stamp duty.

The hike will be applicable only on transfer duty and it will not impact buyers aiming to purchase properties priced below Rs 25 lakh.