Noida:

According to the new rule, developers must sign a registered “agreement to sell” with buyers once 10% of the flat’s cost is paid. This rule follows Section 13 of the Real Estate (Regulation and Development) Act (RERA), 2016. Buyers will now need to pay the stamp duty, which is about 6% to 7% of the property’s value, at the beginning itself.

In a big change, the Greater Noida Authority has made it mandatory for homebuyers to pay the stamp duty when they book a flat in a new housing project. This means buyers must now register their property at the time of booking, instead of waiting until they get possession from the builder.

Later, when the builder gives possession, a “possession deed” will be signed on a ₹100 stamp paper. Until now, most buyers in Greater Noida paid stamp duty only when they took possession. The new rule aims to make sure that property registration happens early in the process instead of being delayed.

Move to protect buyers, increase revenue

“Flats are often sold or transferred multiple times before the builder gets occupancy and completion certificates. We noticed that even after projects are completed, many flats remain unregistered. This new rule will help protect buyers and increase revenue,” an official said.

The rule was approved during the Greater Noida Authority’s 136th board meeting on October 27 last year. Officials explained that the policy will protect buyers from problems related to multiple transfers of unregistered flats and will also help the government collect stamp duty earlier.

Noida, YEIDA have similar rules

Greater Noida’s move follows similar changes already made in nearby areas. In November last year, Noida Authority started requiring builders to register a sale agreement when a flat is booked. The Yamuna Expressway Industrial Development Authority (YEIDA) also follows the same rule.

On September 9, 2024, the Uttar Pradesh government had ordered all authorities to strictly enforce RERA rules. These rules say developers cannot take more than 10% of the flat’s cost without a registered agreement.

Builders raise concerns over new rule

“This rule is not practical because it forces builders to pay full stamp duty at the agreement stage, not at possession. Also, if a buyer cancels, there is no clarity on how the stamp duty will be refunded. Around 20-25% of bookings are usually cancelled for reasons like death, transfer, or financial issues. Without a proper refund process, this rule cannot work well,” said Manoj Gaur, president of CREDAI’s NCR chapter.

He added, “For all flats eventually handed over, stamp duty is paid anyway. So why collect it so early? In many states, registration starts with just ₹5,000 to ₹10,000. We could do the same here.”

Builders have raised concerns about the rule. They said it could create legal troubles and questioned the need to pay stamp duty so early. They also pointed out that there is no clear process for refunding stamp duty if a buyer cancels the booking.

Early registration may lead to more disputes

Builders also warned that if a buyer registers the property early and later defaults on payments, it will be hard to handle. “Once a property is registered, if the buyer stops paying, it will create bigger problems for builders,” said Nikhil Hawelia, Managing Director of Hawelia Group.

He also shared concerns about Non-Resident Indians (NRIs). “NRIs might not be able to come for registration early in the process, which could discourage them from investing here,” he said. Overall, he warned the new rule might hurt the real estate market.

Homebuyers upset over no consultation

“There is no guarantee on when we will get possession, yet we are being asked to pay full stamp duty now. That’s not fair. A better idea would be to register an agreement to lease when 10% of the payment is made,” said Abhishek Kumar, president of the Noida Extension Flat Owner Welfare Association. He added, “This new rule has many problems, and buyers are the ones who will end up suffering because of it.”

Homebuyers were also unhappy with the decision. They said the authority did not consult them before making this change. Many believe it puts an extra burden on buyers.

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