Who bears the registration cost—buyer or seller?

The registration cost in a property transaction typically includes stamp duty, registration charges, legal fees, document preparation charges, and sometimes miscellaneous government levies. While the legal responsibility for payment can vary based on contractual agreement, state rules, and market customs, there are generally accepted norms in property sales.

1. General Practice: Buyer Bears the Registration Cost

• In most real estate transactions, the buyer bears the registration charges and stamp duty.
  
• This includes:
  
  • Stamp duty (usually 4%–8% of property value, depending on the state)
    
  • Registration fee (typically 1% of the property value)
    
  • Miscellaneous fees like documentation charges and scanning fees at the sub-registrar’s office
    
• The logic is that the buyer is seeking legal ownership, and hence is responsible for getting the property registered in their name.
  

2. Seller’s Obligations (Typically Limited)

• The seller generally pays for:
  
  • Capital gains tax, if applicable
    
  • Clearance of outstanding dues (property tax, water/electricity bills)
    
  • Their own legal advisor or advocate fees (if they’ve appointed one)
    
• In rare instances, sellers may agree to contribute to registration costs as part of negotiation or promotional offers (e.g., in builder sales).
  

3. Exceptions and Negotiable Clauses

• Mutual Agreement: If agreed upon in the sale agreement or MoU, the registration cost can be shared or fully borne by the seller.
  
• Incentivized Deals: Developers or sellers sometimes absorb registration charges to attract buyers in slow markets or for bulk purchases.
  
• Partition or Gift Transfers: In cases of family partition or gifts, the registration cost may be shared or adjusted as per internal family understanding.
  

4. Legal Standing and Documentation

• The sale deed or agreement to sell must clearly specify who pays the registration cost, especially in high-value or institutional transactions.
  
• This helps avoid disputes and ensures compliance at the sub-registrar’s office during execution.
  

5. Impact on Tax Filing and Valuation

• The buyer must retain receipts of stamp duty and registration payments to:
  
  • Establish cost of acquisition for future capital gains calculation
    
  • Validate ownership proof in case of legal verification or loan application