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Stamp Duty on Debt Assignment

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13th Feb, 2018

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Introduction

Assignment of debt is one of the most common forms of transactions in financial markets. It essentially entails transfer of a debt from a creditor (assignor) to a third-party (assignee). One of the biggest challenges faced in debt assignment transactions in India is the significant stamp duty implication on the deed of assignment. Considering the volume of assignment transactions undertaken generally by banks and financial institutions or by asset reconstruction companies (“ ARCs ”), the stamp duty levied becomes a significant cost in such transactions. The Constitution of India (“ Constitution ”) confers upon the Parliament and each State Legislature the power to levy taxes and other duties. The subjects on which the Parliament or a State Legislature or both can legislate are specified in the Seventh Schedule of the Constitution. The Seventh Schedule is divided into 3 (three) lists:

• Union List;
• State List; and
• Concurrent List.

The Parliament has the exclusive power to legislate on the subjects enumerated in the Union List. The State List enumerates the subjects on which each State Legislature can legislate and such laws operate within the territory of each State. The Parliament, as well as the State Legislatures, have the power to legislate over the subjects listed in the Concurrent List.

The entry pertaining to levy of stamp duty in the Union List is as follows: -

“91. Rates of stamp duty in respect of bills of exchange, cheques, promissory notes, bills of lading, letters of credit, policies of insurance, transfer of shares, debentures, proxies and receipts.”

The entry pertaining to levy of stamp duty in the State List is as follows: -

“63. Rates of stamp duty in respect of documents other than those specified in the provisions of List I with regard to rates of stamp duty.”

The entry pertaining to levy of stamp duty in the Concurrent List is as follows: -

“44. Stamp duties other than duties or fees collected by means of judicial stamps, but not including rates of stamp duty.” [emphasis supplied]

From the aforementioned entries, it is clear that the power to legislate on the rate of stamp duty chargeable on instruments of debt assignment (since it is not covered under Entry 91 of the Union List) is with the State Legislature. However, the power to determine whether stamp duty can be charged or not on a specific instrument is in the Concurrent List. In this regard, it may be noted that pursuant to the Enforcement of Security Interest and Recovery of Debt Laws and Miscellaneous Provisions (Amendment) Act, 2016 (“ Amendment Act ”), the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“ SARFAESI ”) and the Indian Stamp Act were amended to provide for an exemption from stamp duty on a deed of assignment in favour of an ARC.

As mentioned above, the power to legislate on whether stamp duty is payable or not on an instrument is in the Concurrent List. Therefore, the Parliament has the power to legislate on the aforesaid subject.

Pursuant to the Amendment Act, section 5(1A) was inserted in SARFAESI which provides that any agreement or document for transfer or assignment of rights or interest in financial assets under section 5(1) of SARFAESI in favour of an ARC is not liable to payment of stamp duty.

In several States, notifications have been issued for remission and/ or reduction of stamp duties on debt assignment transactions. For instance, in Rajasthan, the stamp duty chargeable on any agreement or other document executed for transfer or assignment of rights or interests in financial assets of banks or financial institutions under section 5 of SARFAESI in favour of ARCs 1 has been remitted. Further, in Maharashtra, the stamp duty on instrument of securitization of loans or assignment of debt with underlying security has been reduced to 0.1% (zero point one percent) of the loan securitized or the debt assigned subject to a maximum of Rs. 1,00,000 (Rupees one lac) 2 .

Certain State Governments, such as those of Rajasthan and Tamil Nadu have reduced the stamp duty based on the nature of the financial asset being assigned. In Rajasthan, the stamp duty has been reduced for assignment of standard assets whilst in Tamil Nadu, the stamp duty has been reduced for assignment of non-performing assets and assignment in favour of ARCs.

This paper discusses a recent decision by the Allahabad High Court in the case of Kotak Mahindra Bank Limited v. State of UP & Ors. 3 (“ Kotak case ”), where it was held that an instrument of assignment is chargeable with stamp duty under Article 62(c) (Transfer) of Schedule 1B of the Indian Stamp Act, as applicable in Uttar Pradesh (“ UP Stamp Act ”), as opposed to Article 23 (Conveyance) of Schedule 1B of the UP Stamp Act.

The stamp duty payable in various States under Article 23 or the relevant provision for conveyance is on an ad valorem basis whereas the stamp payable under Article 62(c) or relevant provision for transfer of interest secured, inter alia, by bond or mortgage deed, is a nominal amount. For instance, in Uttar Pradesh, the stamp duty payable under Article 62(c) is Rs. 100 (Rupees one hundred).

Decision in the Kotak case

In the Kotak case, Kotak Mahindra Bank Limited (“ Kotak ”) had purchased and acquired certain loans from State Bank of India (“ Assignor ”) along with the underlying securities.

The question for consideration before the full bench of the Allahabad High Court was whether the deed executed by the applicant with the underlying securities would be chargeable with duty under Article 62(c) or Article 23 of Schedule 1B of the UP Stamp Act.

The court observed that in order to determine whether an instrument is sufficiently stamped, one must look at the instrument in its entirety to find out the true character and the dominant purpose of the instrument. In this case it was observed that the dominant purpose of the deed of assignment entered into between Kotak and the Assignor (“ Instrument ”), was to transfer/ assign the debts along with the underlying securities, thereby, entitling Kotak to demand, receive and recover the debts in its own name and right.

Article 11 of Schedule 1B of the UP Stamp Act provides that an instrument of assignment can be charged to stamp duty either as a conveyance, a transfer or a transfer of lease. The court observed that since the Instrument was not a transfer of lease, it would either be a conveyance or a transfer.

The court referred to the definition of conveyance in the UP Stamp Act, which reads as follows:

““ Conveyance ”. — “Conveyance” includes a conveyance on sale and every instrument by which property, whether movable or immovable, is transferred inter vivos and which is not otherwise specifically provided for [by Schedule I, Schedule IA or Schedule IB] [as the case may be];” [emphasis supplied]

The court held that the term conveyance denotes an instrument in writing by which some title or interest is transferred from one person to other and that the use of the words “on sale” and “is transferred” denote that the document itself should create or vest a complete title in the subject matter of the transfer, in the vendee. In this case since under the Instrument, the rights of the Assignor to recover the debts secured by the underlying securities had been transferred to Kotak, it was held that the requirement of conveyance or sale cannot be said to be satisfied.

The court further observed that debt is purely an intangible property which has to be claimed or enforced by action and not by taking physical possession thereof, in contrast to immovable and movable property. Where a transaction does not affect the transfer of any immovable or movable property, Article 23 of Schedule 1B cannot have any applicability.

The court’s view was that since debt along with underlying securities is an interest secured by bonds and/ or mortgages, transfer of such debt would be chargeable under Article 62(c).

The court further clarified that under the Instrument, merely the right under the contract to recover the debts had been transferred. Since the borrower(s) had never transferred the title in the immovable property given in security to the Assignor, the Assignor could merely transfer its rights i.e. mortgagee's rights in the property to recover the debts. It was further observed that the Assignor never had any title to the underlying securities and that it merely had the right to enforce the security interest upon default of the borrower(s) in repayment. The right transferred to Kotak was primarily the right to recover the debts, in accordance with law, by proceeding against the underlying security furnished by the bonds/ mortgage deed(s).

Therefore, the court held that the Instrument was chargeable with stamp duty under Article 62(c) of Schedule 1B of the UP Stamp Act.

Whilst coming to the conclusion that assignment of debt would not constitute a conveyance, the court referred to the definition of conveyance to state that debt is an intangible property which has to be claimed or enforced by action and not by taking physical possession thereof, in contrast to immovable and movable property.

In this regard, it may be noted that there are various judicial precedents 4 , where it has been held that an interest (including mortgage interest) in immovable property is itself immovable property.

However, even assuming assignment of debt with underlying securities over immovable property amounts to a conveyance, it

may be pertinent to refer to the definition of conveyance in the UP Stamp Act which specifically excludes a conveyance which is otherwise provided for by the Schedule to the UP Stamp Act.

Article 62(c) of the UP Stamp Act reads as follows:

“62. Transfer (whether with or without consideration) – … (c) of any interest secured by a bond, mortgagedeed or policy of insurance--”

In view of the above, transfer of any interest secured by a mortgage deed, which is covered under Article 62(c), would be excluded from the meaning of conveyance and would be chargeable to stamp duty under Article 62.

In this regard it may be pertinent to refer to the definitions of ‘bond’ and ‘mortgage deed’ under the UP Stamp Act, which is as follows:

“" Bond " includes

(a) any instrument whereby a person obliges himself to pay money to another, on condition that the obligation shall be void if a specified act is performed, or is not performed, as the case may be;

(b) any instrument attested by a witness and not payable to order or bearer, whereby a person obliges himself to pay money to another; and

(c) any instrument so attested, whereby a person obliges himself to deliver grain or other agricultural produce to another

“" Mortgage-deed ". — "mortgage-deed" includes every instrument whereby, for the purpose of securing money advanced, or to be advanced, by way of loan, or an existing or future debt, or the performance of an engagement, one person transfers, or creates, to, or in favour of another, a right over or in respect of specified property;”

In view of the above, where a debt secured by a bond or a mortgage deed is assigned under a deed of assignment, the stamp duty payable on such deed of assignment will be under Article 62(c) of the UP Stamp Act or corresponding provisions of the Stamp Act of other States.

However, in cases of unsecured loans or loans secured by an equitable mortgage (where there is no mortgage deed), the deed of assignment would attract ad valorem stamp duty chargeable on conveyance, since the same will not get covered under Article 62(c) or similar provisions in other states.

The market practice until now has been to stamp the deed of assignment of debt under the relevant article for Conveyance in the applicable Stamp Act. In fact, in States such as Maharashtra, the State Government has issued notifications for reduction of stamp duty on a deed of assignment under the article for Conveyance.

The judgment passed by the Allahabad High Court in the Kotak case may prove to be a welcome step in reducing the incidence of stamp duty on debt assignment transactions. However, it would need to be seen whether in other States a similar view is taken by stamp duty authorities.

This update has been prepared by Aastha (Partner), Debopam Dutta (Managing Associate) and Abhay Jain (Associate).

1 Notification No. F4(3)FD/Tax/2017-110 dated March 8, 2017 issued by Finance Department (Tax Division) Government Of Rajasthan.

2 Notification No.Mudrank-2002/875/C.R.173-M-1 dated May 6, 2002 issued by Revenue & Forests Department, Government of Maharashtra.

3 Reference Against MISC. Acts. No. 1 of 2016, order dated February 9, 2018.

4 Bank of Upper India Ltd. (in liquidation) v. Fanny Skinner and Ors., AIR 1929 All 161. See also Prahlad Dalsukhrai and Ors. v. Maganlal Muljibhai Tewar, AIR 1952 Bom 454 and Harihar Pandey v. Vindhayachal Rai and Ors., AIR 1949 Pat 170.

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The stamp duty payable during assignation of debt by Asset Reconstruction Companies – By Adv. Haaris Moosa

In Phoenix Arc Private Limited, Mumbai Vs. M/S. Cherupushpam Films Pvt Limited, Ernakulam (2023) ibclaw.in 48 NCLT (hereafter Phoenix ARC) the question raised before the NCLT, Kochi Bench was whether stamp duty has to be paid on a deed assigning debt to an Asset Reconstruction Company (ARC).  The NCLT Kochi Bench has held that the ARC is bound to pay the appropriate stamp duty as per the relevant state legislation, in this case the Kerala Stamp Act, 1959 (KSA, 1959

The stamp duty payable during assignation of debt by Asset Reconstruction Companies

Adv. Haaris Moosa

Stamping has been used by litigators as a deus ex machina for long. Insufficient stamping determines the fate of a case quite independent of its facts or merits. The interplay of the stamping legislations with the Insolvency and Bankruptcy Code, 2016 (IB Code, 2016), has not been adequately analysed by either courts or tribunals.  Stamping in India is regulated by both Union and State legislations since it is covered by Entry 91 of the Union List and Entry 63 of the State List. The Union legislation is the Indian Stamp Act, 1899 (ISA, 1899) 1 and almost all the States have their own stamping statutes. The stamping legislations of old vintage have stood their ground even with the coming of avant garde legislations meant to streamline commercial transactions like the Arbitration and Conciliation Act, 1996, SARFAESI Act, 2002, Companies Act, 2013 and now the IB Code,2016.

In Phoenix ARC Private Limited, Mumbai Vs. M/S. Cherupushpam Films Pvt Limited, Ernakulam (2023) ibclaw.in 48 NCLT  (hereafter Phoenix ARC ) the question raised before the NCLT, Kochi Bench was whether stamp duty has to be paid on a deed assigning debt to an Asset Reconstruction Company (ARC).  The NCLT Kochi Bench has held that the ARC is bound to pay the appropriate stamp duty as per the relevant state legislation, in this case the Kerala Stamp Act, 1959 (KSA, 1959) 2 .  The Hon’ble NCLT held that the applicability of KSA 1959 2 is not ruled out by the prescription under Section 8F of the Indian Stamp Act, 1899 (ISA, 1899) which exempts ARCs from paying any stamp duty on “ any agreement or other document for transfer or assignment of rights or interest in financial assets of banks or financial institution s” covered under section 5 of the SARFAESI Act, 2002.

KSA, 1959 in section 25, declares the assignment of a debt to be a conveyance, and the duty payable has been pegged at 8%. In the instant case, the Tribunal found that the assignment deed was to be stamped at 8% as per Section 25 of KSA, 1959 since the agreement was made in Kerala. Interestingly in the instant case, the stamp duty as per KSA, 1959 comes to Rs. 6,33,99,500/- while the assignment deed was found to be made on a non-judicial stamp paper of Rs. 500/-. Consequently, the Tribunal found the assignment deed to be unenforceable for insufficient stamping. Phoenix ARC breaks new ground in holding that the assignment of a debt to an Asset Reconstruction Company is liable to be stamped as per the concerned state stamping legislation.

In Essar Steel India Ltd. Committee of Creditors v. Satish Kumar Gupta [2019] ibclaw.in 07 SC  (hereafter Essar Steel ) the supreme court confirmed the decision of the NCLAT, [2019] ibclaw.in 109 NCLAT in affirming the decision of the NCLT in rejecting an application that suffered from insufficient stamping. And held that “Further, the submission of the Appellants that they have now paid the requisite stamp duty, after the impugned NCLAT judgment, would not assist the case of the Appellants at this belated stage. These appeals are therefore dismissed.” 3 Quite to the contrary, in Praful Nanji Satra v. Vistra ITCL (India) Ltd. (2022) ibclaw.in 550 NCLAT , the NCLAT went on to reject an argument for dismissal of an application for insufficient stamping, holding that the only issue that the NCLT in IBC proceedings can look at is whether there has been a default, and nothing further. It was also held that insufficient stamping is a curable defect. The effect of insufficient stamping has attracted contradictory judgments from the NCLAT and the Supreme Court. However, Phoenix ARC follows the correct law laid down by the Supreme Court in Essar Steel .

It is to be noted that proceedings under Code are non-adversarial. Any applicant seeking to initiate corporate insolvency proceedings is required to produce documents that satisfy the Adjudicating Authority (the NCLT) proving the default committed by the corporate debtor. Such an applicant is also required to ensure that the financial contracts on which they rely are legally sound and are not truncated. While structuring true sale transactions for assignment of debt (standard assets or NPA), compliance under the applicable stamping legislations must be ensured to avoid legal complications.

Disclaimer:  The Opinions expressed in this article are that of the author(s). The facts and opinions expressed here do not reflect the views of IBC Laws ( http://www.ibclaw.in ). The entire contents of this document have been prepared on the basis of the information existing at the time of the preparation. The author(s) and IBC Laws ( http://www.ibclaw.in ) do not take responsibility of the same. Postings on this blog are for informational purposes only. Nothing herein shall be deemed or construed to constitute legal or investment advice. Discussions on, or arising out of this, blog between contributors and other persons shall not create any attorney-client relationship.

Follow for daily updates:

• < https://legislative.gov.in/sites/default/files/A1899-2.pdf > [ ↩ ]
• < https://keralaregistration.gov.in/fileUploads/The%20Kerala%20Stamp%20Act.pdf > [ ↩ ][ ↩ ]
• [2019] ibclaw.in 07 SC , para 99 [ ↩ ]

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Stamp Duty on Assignment of Receivables

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Updated as on 07.05.2024

The table below provides the rate of stamp duty applicable on assignment of receivables in major states across India:

[1] Notification G.O.Ms. No.305 dated 29.03.2004 issued by Registration and stamps Department, Government of Andhra Pradesh. This shall apply to ARC’s.

[2] Notification S.O.No.-1/M1-126-2004/2904 dated 29.12.2004 issued by Department of Registration, Government of Bihar. This shall apply to ARC’s.

[3] Notification No./F10-9-2004-C.T.-(R) –V-(32) dated 28.02.2004 issued by Financial and Planning Department {Commercial Tax (Registration) Department}, Government of Chhattisgarh.

[4] http://delhi.gov.in/wps/wcm/connect/DoIT_Revenue/revenue/home/registration+acts+and+rules/manuals%2Cnotifications%2Corders/reg260209

[5] https://www.rbi.org.in/Scripts/PublicationReportDetails.aspx?ID=166

[6] https://www.rbi.org.in/Scripts/PublicationReportDetails.aspx?ID=166

[7] https://www.rbi.org.in/Scripts/PublicationReportDetails.aspx?ID=166

[8] 1.  Notification No. Stamp-6/05/35723/R. dated 31.08.2005 issued by Revenue Department, Government of Orrisa. 2. Notification No. Stamp-6/05/35723/R. dated 31.08.2005 issued by Revenue Department, Government of Orrisa.

[9] http://igrs.rajasthan.gov.in/writereaddata/Portal/Images/pdf/notification-dated-26062015.pdf

[10] Notification No.K.N.5-1023/11-2005-500(137)-2003 dated 15.03.2005 as amended by No.K.N.5-1389/11-2005-500(137)/2003 dated 29.03.2005 issued by Kar Evam Nibandhan Anubhag-5, Government of Uttar Pradesh.

[11] Notification No.2307-F.T. dated 02.07.2004 issued by Finance (Revenue) Department, Government of West Bengal.

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can you please provide copy of the Notification No.2307-F.T. dated 02.07.2004 issued by Finance (Revenue) Department, Government of West Bengal.

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Drafting a Deed of Assignment

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Note: Want to skip the guide and go straight to the free templates? No problem - scroll to the bottom. Also note: This is not legal advice.

Introduction

A Deed of Assignment is a vital legal document used to transfer rights, interests or assets between parties. It is regularly used in business transactions, and often regarding real estate or intellectual property. A well-crafted deed of assignment can protect both sides from potential legal disputes, ensuring that everyone involved understands their obligations and responsibilities.

The Genie AI team has seen many instances where having a valid deed of assignment can make all the difference - without it businesses could be exposed to considerable risk. That’s why we offer free templates and step-by-step guides to help those wishing to draft their own deed.

When creating a Deed of Assignment it is important to take the specific circumstances into account - any changes or additions should be accurately documented and agreed by all involved parties beforehand. Furthermore, it is essential that the terms are clearly written out in an unambiguous way so every party knows exactly what they have signed up for. Beyond protecting both sides’ interests, this type of agreement can also be used for copyright assignments, leases, debt transfers and trusts.

Before signing on the dotted line it’s also critical that executing such documentation is done properly - all parties must sign in the presence of a witness who will also affix their signature and date the document accordingly. Once this process has been completed filings must then be made with any relevant government authorities whenever necessary (especially in cases involving real estate or intellectual property transfers).

In summary, drafting a Deed of Assignment not only safeguards everyone’s best interests but also provides additional benefits depending on its use case - reading through our step-by-step guidance below should provide you with more information on how to access our template library today and start benefitting from its advantages without needing to sign up for an account with Genie AI first!

Definitions (feel free to skip)

Legal Binding: When a legally binding document is used, it means that all parties involved are legally obligated to follow the terms and conditions set forth in the document.

Assignor: The assignor is the person who is transferring rights, interests or assets to someone else.

Assignee: The assignee is the person who is receiving the rights, interests or assets from the assignor.

Witness: A witness is an independent third-party who is present when a document is signed, in order to ensure that the process is completed in a secure and legally binding manner.

Stamp: A stamp is an official seal or mark that is used to verify and authenticate a document.

Tax: A tax is a sum of money that is paid to a government or public authority.

Duty: Duty is an obligation or responsibility assigned to someone.

Defining the Deed of Assignment

What is a deed of assignment and what is its purpose, parties involved, who needs to be involved in the making of a deed of assignment, drafting the deed, determine what kind of deed of assignment needs to be drafted, consider the subject matter to be assigned in the deed, research the legal requirements for the kind of deed to be drafted, draft the deed of assignment in accordance with the legal requirements, executing the deed, check that the parties to the deed are correctly identified, confirm that the deed is correctly signed and dated by all parties, confirm that the deed is witnessed by an independent third party, have the deed of assignment properly executed by all parties, registration, determine whether the deed of assignment needs to be registered, if registration is necessary, confirm the registration procedures, take necessary steps to register the deed of assignment, considerations, consider any applicable tax or stamp duty implications of the deed of assignment, consider any restrictions or limitations on the rights being assigned, consider whether the deed of assignment needs to be registered in any public records, common mistakes, not accurately identifying all of the parties to the deed, not having the deed properly executed by all parties, not having the deed witnessed by an independent third party, not considering any applicable tax or stamp duty implications, not considering any applicable restrictions or limitations on the rights being assigned, record keeping, ensure that the original deed of assignment is securely stored, create a digital copy of the deed and store it in a secure manner, review the deed of assignment to ensure accuracy, confirm that all steps have been completed correctly, seek advice from legal professionals if necessary, get started.

• Establish the parties involved in the Deed of Assignment
• Identify the property or service being assigned
• Specify the terms of the assignment
• Ensure the Deed of Assignment is properly witnessed
• Check that all signatures are valid

When you have completed the steps above, you will have successfully defined the Deed of Assignment and can proceed to the next step.

• A deed of assignment is a legal document that is used to transfer the rights and responsibilities of one party (the assignor) to another party (the assignee)
• It is used to transfer contractual rights and obligations between parties
• It should include information such as the names of the parties, the date of the assignment, and the description of the rights transferred
• You will know that you have completed this step when you have an understanding of what a deed of assignment is and why it is used.
• Identify the party transferring their rights (the assignor) and the party receiving the rights (the assignee)
• Draft the deed in the name of both parties, including full names and contact details
• Ensure the deed is signed by both the assignor and assignee
• Once the deed is signed, the parties should exchange copies of the document

Once the assignor and assignee have been identified and the deed has been drafted and signed, you can check this step off your list and move on to the next step.

• Identify the parties involved in the Deed of Assignment. This would typically include the assignor (the party transferring their rights or interest) and the assignee (the party receiving the rights or interest).
• Ensure that all parties involved have the legal capacity to enter into a contract.
• When all parties have been identified and their legal capacity has been verified, you can check this step off your list and move on to drafting the Deed.
• Read the applicable laws in your jurisdiction to determine the required language and structure of the Deed of Assignment
• Gather the necessary information on the parties, the asset being assigned, and other relevant details
• Draft the Deed of Assignment, taking into account all the necessary details
• Make sure the language is clear and unambiguous
• Have the Deed of Assignment reviewed by a legal professional
• When the Deed of Assignment has been drafted and reviewed, you can move on to the next step.
• Identify the type of assignment that needs to be drafted and the legal requirements that need to be satisfied
• Consider the purpose of the Deed and the rights and obligations of the parties to the Deed
• Determine if the Deed is for an absolute or conditional assignment
• Consider if the Deed should be an express or implied assignment
• Determine if the Deed needs to be in writing or if it can be oral
• Check the applicable laws in your jurisdiction to ensure that you are drafting a valid Deed
• Check if there are any additional requirements that need to be included in the Deed

When you can check this off your list: Once you have identified the type of assignment and the relevant legal requirements, you can move on to considering the subject matter to be assigned in the Deed.

• Identify the subject matter of the Deed of Assignment, such as a patent, trademark, copyright, or other intellectual property
• Assess the value of the subject matter and any associated liabilities
• Understand the relationship between the assignor and assignee
• Have all necessary documents, such as a purchase agreement, to provide more detail about the assignment

Once you have identified the subject matter of the Deed of Assignment, assessed its value, understand the relationship between the assignor and assignee, and gathered any additional documents, you can move onto the next step of researching the legal requirements for the kind of Deed to be drafted.

• Research the relevant legislation, case law, and other materials related to the Deed of Assignment to be drafted
• Consult with a lawyer familiar with the relevant law to understand the requirements
• Take detailed notes on the legal requirements that must be adhered to in the Deed of Assignment
• Once you have all the necessary information, double-check that you understand the requirements before moving on to the next step.
• Prepare the text of the Deed, ensuring that all relevant information regarding the parties, the subject matter, and the consideration is included
• Check to make sure the language conforms with relevant laws and regulations
• Have the Deed reviewed by a solicitor to ensure that it complies with all legal requirements
• Once the Deed has been approved by a solicitor, have the parties sign the document
• Once the Deed has been signed by both parties, make multiple copies and ensure each party has a copy
• This step is complete once the Deed has been signed and each party has a copy of the document.
• Ensure both parties sign the Deed of Assignment in the presence of two witnesses who are over the age of 18 and not parties to the Deed
• Have both parties sign the deed in the presence of two witnesses and have the witnesses sign the deed to attest to witnessing the signature of the parties
• Check that the parties have signed the Deed in the presence of the witnesses by noting the signatures and the dates of signature in the execution clause of the Deed
• Once the Deed has been executed, have the parties date and keep a copy of the Deed in a secure place
• You will know that you have completed this step when the Deed has been properly executed by the parties in the presence of two witnesses.
• Identify all parties to the Deed and verify that their details are correct.
• Ensure that all parties to the Deed are identified in the document and that the details of each party are accurate and up-to-date.
• Check that the names, addresses and contact details of each party are correct.
• Once you have verified that the parties and their details are correctly identified, you can move on to the next step.
• Check that all parties have signed the Deed in the correct place, and that the date of signature is correct
• Ensure that each party has signed the Deed in the presence of an independent witness
• Check that all parties have signed the Deed with their full name and title, if applicable
• Confirm that the date of signature is correct and that all parties have signed on the same date
• Once you have verified that all parties have correctly signed and dated the Deed, you can proceed to the next step.
• Ensure that the Deed is witnessed by an independent third party who is not a party to the Deed.
• Ask the third party to sign the Deed and provide their name, address, occupation and date of signing.
• Check that the third party has signed and dated the Deed.
• Once the above is complete, you can check this step off your list and move on to the next step.
• Obtain signatures from all parties on the deed of assignment, ensuring that each party signs in the presence of a witness
• Have an independent third party witness each party’s signature
• Ensure that all parties have a valid form of identification, such as a driver’s license or passport, available for inspection by the witness
• Ensure that all parties sign the deed of assignment in the presence of the witness
• Obtain the witness’ signature, confirming that all parties signed in the presence of the witness
• You will know this step is completed once all parties have signed the deed of assignment and the witness has signed confirming they were present during the signing.
• Obtain a copy of the executed Deed of Assignment from all parties
• Contact the relevant state or territory office to determine whether the Deed of Assignment needs to be registered
• If registration is required, complete the necessary forms, pay the registration fee, and submit the required documents
• Once the Deed of Assignment is registered, the registrar will issue a certificate of registration
• Check off this step when you have received and reviewed the certificate of registration.
• Research the applicable laws and regulations in the relevant jurisdiction to decide if the Deed of Assignment needs to be registered
• Consult a legal professional if unsure
• When you have the answer, you can move on to the next step.
• Confirm what type of Deed of Assignment requires registration with the relevant government agency or registry.
• Research the registration procedures and the requirements you must meet in order to register the Deed of Assignment.
• Obtain any fees or additional documents that are necessary to complete the registration process.
• Ensure that all parties to the Deed of Assignment understand the registration process and the requirements for completing it.

You can check off this step once you have researched and confirmed the registration procedures for the Deed of Assignment.

• Gather the necessary documents for registration, such as the Deed of Assignment, supporting documents, and the applicable fee
• Visit the registration office to register the Deed of Assignment
• Submit the necessary documents to the registration office
• Pay the applicable fee
• Obtain a copy of the registered Deed of Assignment
• Upon completion of the above steps, you can check this off your list and move on to the next step.
• Review and understand the nature of the rights and obligations being assigned
• Determine if there are any restrictions or limitations in the assignment
• Assess if any approvals are needed from third parties before the assignment is valid
• Confirm that the assignor has the right to assign the interest being transferred
• Check to see if the assignee has the necessary capacity to accept the assignment
• Analyze if the assignment is subject to any applicable laws or regulations
• Determine if any additional documentation is needed to support the assignment
• Once you have considered all of the above, you can proceed with drafting the Deed of Assignment.
• Check with your local taxation authority or a qualified tax professional to see if the Deed of Assignment is subject to any taxes or stamp duty.
• Ensure that the Deed of Assignment includes any required taxes or stamp duty payments.
• Check to see if the tax or stamp duty implications vary by jurisdiction.
• Once you’ve considered the tax or stamp duty implications, you can move on to the next step.
• Identify any restrictions or limitations that could affect the transfer of rights in the Deed of Assignment
• Consider whether there are any legal restrictions that must be observed in the transfer of the rights being assigned
• Research any relevant industry standards or regulations to ensure that the restrictions or limitations on the rights being assigned are compliant
• Ensure that the Deed of Assignment clearly outlines the restrictions or limitations of the rights being assigned
• When all restrictions or limitations on the rights being assigned are taken into consideration, checked for compliance and outlined in the Deed of Assignment, this step is complete.
• Consider whether the Deed of Assignment needs to be registered with any government or public agencies.
• Determine if any registration is required or optional.
• Research the relevant regulations and laws to ensure that the assignments are properly recorded.
• Check any local requirements or restrictions.
• Once you have determined that the Deed of Assignment does or does not need to be registered, you can move on to the next step in the process.

• Read over the Deed of Assignment twice to make sure you’re accurately identifying all of the parties to the Deed. Make sure you include the full names and addresses of the assignor and assignee, as well as any other relevant parties. • Check that the legal description of the subject property is accurate. • Ensure that the consideration (the amount being exchanged for the assignment) is stated clearly and accurately. • Make sure that the names of the initial parties to the Deed are also included in the recitals. • Ensure that the recitals and the express terms of the Deed are consistent with one another. • Make sure that the Deed is signed, notarized, and delivered in accordance with state law.

Once you’ve completed the above steps, you can check off this task and move on to the next step in the guide.

• Identify the assignor and assignee. The assignor is the party transferring their rights and the assignee is the party receiving the rights.
• Check all of the details are correct. This includes the names, addresses and other contact information for both parties.
• Draft the deed to ensure that the assignor and assignee are accurately identified.
• You can check this off your list and move on to the next step once you have confirmed that the assignor and assignee have been accurately identified in the deed.
• Ensure that all parties to the Deed have read, understood and agreed to the terms and conditions of the agreement.
• Have all parties affix their signature to the Deed and the accompanying documents.
• Check that all the signatures are dated and in the presence of a witness.
• When all parties have properly executed the Deed, you can move on to the next step.
• Ensure all parties have signed the Deed in the presence of a witness.
• The witness must be an independent third party who is not a party to the Deed.
• The witness must sign each page of the Deed that contains a party’s signature.
• The witness must also include their full name, address and occupation on the Deed.
• Once all of the above requirements are met, then you can check this off your list and move on to the next step.
• Determine the applicable taxes or stamp duty implications for the Deed of Assignment.
• Research any applicable taxes or stamp duty fees for the Deed of Assignment.
• Calculate the applicable taxes or stamp duty fees for the Deed of Assignment.
• Make sure to include the applicable taxes or stamp duty fees in the Deed of Assignment.

Once you have determined the applicable taxes or stamp duty implications for the Deed of Assignment, and included them in the Deed of Assignment, you can move on to the next step.

• Determine the rights that you are assigning and review any applicable laws or regulations to ensure that the assignment of such rights is permitted.
• Consider any applicable contractual restrictions or limitations on the rights being assigned, such as any applicable confidentiality obligations or restrictions on the transfer of rights.
• Once you have determined that the assignment of the rights is permitted and there are no applicable restrictions or limitations, you can proceed to the next step of recording keeping.
• Create a record of the Deed of Assignment, including the date it was executed, by each party
• Maintain a copy of the Deed of Assignment in a secure place
• Record any additional related documents, such as any security documents, release documents, or other agreements
• When all of the above have been done, you can check this off your list and move on to the next step.
• Obtain a physical copy of the original Deed of Assignment
• Ensure the original Deed is signed by both parties
• Keep the original Deed in a safe and secure place, such as a locked filing cabinet or safe
• Make sure the document is stored in a location that is accessible to both parties
• Ensure that the original Deed is not destroyed or tampered with in any way

You can check this off your list and move on to the next step once the original Deed of Assignment is safely stored in a secure location.

• Scan or take a digital photo of the original Deed of Assignment and save it to a secure location.
• Ensure that the digital copy is readable and clearly displays all of the information contained in the original document.
• Ensure that the digital copy is stored in a secure location, preferably on a cloud-based storage system or other secure server.
• Make sure that only authorized personnel have access to the digital copy of the Deed.
• When finished, you will have created a digital copy of the Deed and stored it in a secure manner.
• Read over the Deed of Assignment to ensure accuracy
• Make sure all details are correct, and all parties are named
• Verify that all signatures are complete and accurate
• Make sure the date of the assignment is correct
• Check that the document is formatted and laid out correctly
• Once you are satisfied with the accuracy of the Deed of Assignment, you can move on to the next step.
• Read through the entire document to make sure all the information is correct
• Double check that the names and details of the parties involved are spelled correctly
• Ensure that all the dates are accurate, and that any and all parties have signed the deed in the right places
• Check that the terms and conditions in the deed are consistent with the agreement between the parties
• When you have verified all the details, you can check this off your list and move on to the next step.
• Check the Deed of Assignment to ensure that all required elements are present, including accurate information and signatures of all parties.
• Verify that any and all attachments to the Deed of Assignment are included and accurate.
• Ensure that all dates, signatures, and other pieces of information are accurate and up-to-date.
• Once you’ve confirmed that all of the steps have been completed correctly, you can move on to the next step.
• Seek professional advice from a lawyer or other legal professional to ensure that the deed of assignment is legally binding and enforceable.
• Request that the legal professional checks that all steps have been completed correctly, and that the deed of assignment meets all requirements under local law.
• Ask the legal professional to provide you with written advice on any changes or revisions that may be necessary to make the deed of assignment valid and enforceable.
• Once the legal professional has confirmed that the deed is legally sound, you can check off this step and proceed with the next one.
• Research legal professionals who are able to provide advice and assistance with the drafting of a deed of assignment
• Contact the legal professionals to discuss the specific requirements and details of the deed of assignment
• Ask the legal professionals if they are able to provide advice and assistance with the deed of assignment
• Receive advice from the legal professionals and make changes to the deed of assignment accordingly
• Once you are satisfied with the changes to the deed of assignment, you can move on to the next step.

Q: Does a Deed of Assignment need to be signed?

Asked by John on April 23rd 2022. A: Yes, a Deed of Assignment needs to be signed by both the assignor and the assignee in order for it to be legally binding. The signatures should be witnessed and dated, and should be in front of an independent witness who is not related to either party. It is also important to include the relevant clauses and provisions in the deed, as these will set out the rights and obligations of each party.

Q: What is the difference between an assignment and a novation?

Asked by Sarah on July 29th 2022. A: An assignment is a transfer of rights or obligations from one party to another, while a novation is a transfer of rights or obligations from one party to another with the consent of all parties involved. An assignment does not necessarily require the consent of all parties, while a novation always requires the consent of all parties. Additionally, an assignment can transfer rights or obligations without necessarily extinguishing any pre-existing agreements, while a novation extinguishes any pre-existing agreements.

Q: Is a Deed of Assignment legally binding in different jurisdictions?

Asked by Tyler on October 17th 2022. A: Yes, a Deed of Assignment can be legally binding in different jurisdictions, though the exact requirements for validity may differ from jurisdiction to jurisdiction. In general, however, a Deed of Assignment needs to be signed by both parties and witnessed by an independent third party in order for it to be legally binding. Additionally, the deed should include all relevant clauses and provisions that are applicable in each jurisdiction.

Q: Are there any tax implications when drafting a Deed of Assignment?

Asked by Emma on January 15th 2022. A: Yes, there are tax implications that need to be taken into account when drafting a Deed of Assignment. Depending on the jurisdiction and specific tax laws, there may be tax implications for both parties if they are transferring rights or obligations under the deed. It is important to seek professional tax advice before entering into any agreement that involves transferring rights or obligations between parties as this could have significant financial implications for all involved.

Q: Do I need legal advice when drafting a Deed of Assignment?

Asked by Jacob on June 5th 2022. A: While it is not necessary to seek legal advice when drafting a Deed of Assignment, it is generally recommended in order to ensure that all relevant legal requirements are satisfied and that all involved parties are aware of their rights and obligations under the deed. It is also important to make sure that all language used in the deed is clear and unambiguous so that it can easily be understood by all parties involved.

Q: How can I ensure that my Deed of Assignment is valid?

Asked by Michael on August 28th 2022. A: In order for your Deed of Assignment to be valid, it must meet certain legal requirements which vary between jurisdictions. Generally speaking, your deed should include all relevant clauses and provisions applicable in your jurisdiction as well as signatures from both parties which should be witnessed by an independent third party who is not related to either party involved. Additionally, any language used within the document should be clear and unambiguous so that it can easily be understood by all involved parties.

Q: What information do I need to provide when drafting a Deed of Assignment?

Asked by Ashley on November 10th 2022. A: When drafting a Deed of Assignment, you will need to provide information about both parties involved such as their names, addresses, contact details and any other relevant information required under applicable laws in your jurisdiction. Additionally, you will need to include any relevant clauses or provisions applicable in your jurisdiction which will set out the rights and obligations of each party under the deed as well as any other information required for the document to be legally binding.

Q: What are common mistakes made when drafting a Deed of Assignment?

Asked by Joshua on February 20th 2022. A: One common mistake made when drafting a Deed of Assignment is failing to include all relevant clauses or provisions applicable in your jurisdiction which set out the rights and obligations of each party involved in the agreement. Additionally, failing to have the document signed by both parties or witnessed by an independent third party can render the document invalid or unenforceable under applicable law in some jurisdictions. Moreover, using ambiguous language within the document can also lead to misunderstandings and disputes further down the line which could be avoided if clear language was used throughout the document instead.

Example dispute

Lawsuit referencing a deed of assignment.

• The plaintiff may raise a lawsuit if they have been wronged by the defendant in a way that is outlined in the deed of assignment.
• For example, the deed of assignment may outline that the defendant is responsible for paying a certain amount of money to the plaintiff, and the defendant has failed to do so.
• The plaintiff may also raise a lawsuit if the defendant has failed to adhere to any other obligations laid out in the deed of assignment.
• The plaintiff would need to prove that the defendant has breached the deed of assignment in order to win the lawsuit.
• If successful, the plaintiff may be able to obtain a judgment in their favor, which may require the defendant to pay the plaintiff the money they are owed.
• In addition, the plaintiff may be able to seek other damages, such as punitive damages, if the breach of the deed of assignment was particularly egregious.
• Depending on the severity of the breach, the plaintiff may also be able to seek an injunction to prevent the defendant from continuing to breach the deed of assignment.
• Settlement of the dispute may also be possible, wherein the defendant agrees to pay a certain amount of money to the plaintiff, or agrees to adhere to the obligations laid out in the deed of assignment.

Templates available (free to use)

Deed Of Assignment For Rent Deposits Occupation Lease Deed Of Assignment Of Benefit Of Claim For The Freehold Or Extended Lease House Under Section 8 Or Section 14 Deed Of Assignment Of Equitable Interest In Residential Land Deed Of Assignment Of Goodwill And Intellectual Property Rights Transfer Of A General Partnership To An Llp Deed Of Assignment Of Property Sale Benefits [Section 42 Deed Of A

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Stamp Duty Document Guide

These stamp duty document guides have been prepared to assist in calculating the stamp duty payable on the documents available for self-determination on RevenueSA Online and those that must be submitted for the assessment of the Commissioner of State Taxation. It does not replace nor override the legislative requirements of the Stamp Duties Act 1923 .

In these Guides:

• all references made to sections relate to the Stamp Duties Act 1923 , unless otherwise specified;
• a reference to the Commissioner is a reference to the Commissioner of the State Taxation; and
• the term ‘document’ is used in place of the word ‘instrument’, to facilitate easy reading.

Self Determination Assessment by the Commissioner (Opinion) Section 67 (PDF 336KB) Section 71E (PDF 168KB) Guide Glossary

Self Determination

A document should be read thoroughly to determine the true nature of its intent in order to determine which document type applies. Documents not listed in this Guide must be submitted to the Commissioner for assessment.

If GST is included as part of consideration, stamp duty is payable on the GST inclusive amount (Section 15A).

If a conveyance is part of a series with other conveyance documents (that is, the conveyances arise from a single contract of sale or together form or arise from one transaction or a series of transactions), all documents must be self-determined concurrently and Section 67 applied. If documents subject to the provisions of Section 67 are being self-determined separately they must be submitted to the Commissioner for assessment together with details of the other transactions in the series. Refer to the Stamp Duty Document Guide (Section 67) (PDF 167KB) for further information.

If you have any enquiries relating to the content of this guide or require advice on the suitability of self-determining a document via RevenueSA Online you should contact RevenueSA.

View the complete guide (PDF 1,757KB)

View the documents that can be self-determined in the boxes below, including if Commonwealth Reporting is required.

Declaration of Trust (PDF 161KB)

Transfer of Lease – Pursuant to Conveyance of Land (PDF 162KB)

Conveyance of Business

SA Business (Pre 18/06/2015) (PDF 267KB)

Conveyance of Land

Assignment Land Contract (PDF 286KB)

Assignment Land Contract – Qualifying Land (PDF 332KB)

Creation of Life Estate (PDF 192KB)

Easement (PDF 162KB)

Easement – Qualifying Land (PDF 216KB)

Ex-Service Persons Concession (PDF 193KB)

Lease Premium (PDF 128KB)

Lease Premium – Qualifying Land (PDF 142KB)

Off the Plan Concession (PDF 356KB)

Option to Purchase (PDF 129KB)

Option to Purchase – Qualifying Land (PDF 119KB)

Qualifying Land (PDF 356KB)

Residential/Primary Production (PDF 357KB)

Road Closure (PDF 156KB)

Road Closure – Qualifying Land (PDF 171KB)

Surrender of Lease – Lessor Pays (PDF 121KB)

Surrender of Lease – Lessor Pays – Qualifying Land (PDF 101KB)

Surrender of Life Estate (PDF 157KB)

Surrender of Remainder Estate (PDF 147KB)

Transfer of Lease (PDF 197KB)

Transfer of Lease – Qualifying Land (PDF 246KB)

Conveyance of Land - Not Chargeable

Change in Tenancy - No Change in Ownership Share (PDF 149KB)

Surrender of Lease – Lessee Pays (PDF 162KB)

Surrender of Lease – No Consideration (PDF 130KB)

Conveyance of Land - Exemptions

Certified Domestic Partnership Agreement Pursuant to 71CBA (PDF 150KB)

Bankrupts Pursuant to 71CD (PDF 157KB)

Liquidator in Specie Distribution (PDF 193KB)

Pursuant to 71CA (PDF 377KB)

Pursuant to 71CB (PDF 271KB)

Pursuant to 71CBA (PDF 220KB)

Pursuant to a Will or Intestacy (PDF 200KB)

To exempt authority (PDF 157KB)

To Religious/Charitable Body (PDF 159KB)

Trustee to Trustee (PDF 178KB)

Family Farm Pursuant to Sec 71CC (PDF 137KB)

Conveyance of Other

Surrender of Interest in a Trust by a Family Member (PDF 159KB)

Family Law Agreement Pursuant to 71CA (PDF 153KB)

Appointment of New Trustee (PDF 123KB)

Deed (PDF 126KB)

Transfer of Mortgage (PDF 124KB)

Agreement (PDF 117KB)

Exemptions - Transfer of Motor Vehicles

Pursuant to a Will or Intestacy (PDF 140KB)

Pursuant to 71CB (PDF 204KB)

Not Chargeable

Lease entered into on or after 1/7/2004 (PDF 192KB)

Non Dutiable Mortgage / Discharge of Mortgage or Encumbrance (PDF 127KB)

Amendment of a Strata Plan (PDF 126KB)

Amendment of Deposited Community Plan (PDF 126KB)

Deposit of a Strata Plan (Same Parties) (PDF 112KB)

Deposit Plan of Community Division (PDF 197KB)

Easement – Same Parties, No Consideration (PDF 128KB)

Road Closure – Same Parties, No Consideration (PDF 122KB)

RTC with no transactions (PDF 168KB)

Extension of Mortgage (PDF 148KB)

Assessment by the Commissioner (Opinions)

While the Stamp Duty Document Guide (Opinion) is a comprehensive list it is not possible to anticipate and describe every document that will be required to be submitted for assessment of duty by the Commissioner.

A considerable number of document classes are not required to be submitted for an assessment of duty. Taxpayers/agents can self-determine duty, generate a Certificate of Stamp Duty and pay the duty on the documents on RevenueSA Online .

Documents that are able to be processed via RevenueSA Online should be self-determined according to the approval given to authorised users and should not be forwarded to RevenueSA for the purpose of having the Commissioner make an assessment. These documents are listed in the Stamp Duty Document Guide (Self-Determined) .

If a document is not included in the list of approved documents for processing on RevenueSA Online in the Stamp Duty Document Guide (Self-Determined) , it must be submitted for the assessment of duty by the Commissioner.

If a conveyance is part of a series with other conveyance documents (that is, the conveyances arise from a single contract of sale or together form or arise from one transaction or a series of transactions), all documents must be determined concurrently and Section 67 applied. If documents subject to the provisions of Section 67 are being determined separately they must be submitted for the assessment of the Commissioner together with details of the other transactions in the series.

Refer to the Stamp Duty Document Guide (Section 67) (PDF 336KB) for further information.

View the complete guide (PDF 706KB)

Agreements (PDF 123KB)

• Agreement for the dissolution of a land owning partnership
• Agreement for the transfer of a part interest in a land owning partnership (including retirement of a partner, introduction of a partner)
• Application for amendment of a deposited community plan where the amendment effects a conveyance of land
• Application for the deposit of a strata plan (existing scheme)
• Application for the amendment of a strata plan

Conveyances

Conveyances (PDF 149KB)

• Conveyance arising from or forming one transaction or a series of transactions (Section 67)
• Conveyance of an interest in an exploration tenement pursuant to Section 71D
• Transactions effected without creating a dutiable instrument (Section 71E)C

Conveyance of Land (PDF 391KB)

• Conveyance of land in order to correct an error (Section 107)
• Conveyance of land where the value of land is disputed
• Conveyance of land pursuant to Section 67
• Conveyance of land pursuant to a Deed of Family Arrangement
• Conveyance of land from a trustee to a beneficiary
• Conveyance of property from a trustee to a trustee
• Conveyance of land where the contract is dated on or before 11 July 2002
• Conveyance of land involving adverse possession
• Conveyance of land from a Custodian to an SMSF Trustee
• Conveyance of land pursuant to Section 71CA
• Conveyance of land pursuant to Section 71CB
• Conveyance of vacant land - Qualifying Land
• Conveyance of land - Corporate Reconstruction
• Conveyance of land where the land use code does not support Qualifying Land

Declaration of Trust over Land

Declaration of Trust over Land (PDF 258KB)

Deeds (PDF 259KB)

Land Holder (PDF 87KB)

• Conveyance of an interest in a land holding entity (for transactions after 1 July 2011)
• Conveyance of an interest in a land rich entity (for transactions prior to 30 June 2011)

Transfer of Units

Transfer of Units (PDF 117KB)

• Transfer of units in a land owning unit trust arising from a sale
• Transfer of units in a land owning unit trust for no consideration (includes gifts and an issue or redemption of units on a non pro-rata basis

Guide Glossary

Residential & primary production land, what is residential land.

Land will be taken to be used for residential purposes where the Commissioner, after taking into account information provided by the Valuer-General, determines that:

• it is being predominantly used for residential purposes;
• although the land is not being used for any particular purpose at the relevant time the land should be taken to be used for residential purposes due to improvements that are residential in character having been made to the land; or
• land that is vacant, or vacant with only minor improvements, that the land is within a zone established by a Development Plan under the Planning, Development and Infrastructure Act 2016 that envisages the use, or potential use, of the land as residential, and that the land should be taken to be used for residential purposes due to that zoning (subject to the qualification that if the zoning of the land indicates that the land could, in a manner consistent with the Development Plan, be used for some other purpose (other than for primary production) then the vacant land will not be taken to be used for residential purposes).

The following categories of land coded as Residential are considered by the Commissioner to be commercial in nature (and thus entitled to the relevant qualifying land reduction as from 7 December 2015) and may be self-determined via RevenueSA Online:

• Hotel/Motel Community

The following categories of land are coded as Residential but may be considered by the Commissioner to be commercial in nature (and thus entitled to the relevant qualifying land reduction as from 7 December 2015):

• Serviced apartments;
• Short term unit accommodation; and
• Vacant land for commercial use.

To obtain the qualifying land exemption, a conveyance of land with any of these Land Use Codes (LUCs) must be submitted to the Commissioner for assessment with a submission detailing why the land should be considered as commercial in nature.

What is Primary Production Land?

Land will be taken to be used for primary production purposes where the Commissioner, after taking into account information provided by the Valuer-General, determines that:

• it is being predominantly used for primary production purposes; or
• although the land is not being used for any particular purpose at the relevant time the land should be taken to be used for primary production purposes due to a classification that has been assigned to the land by the Valuer-General.

What Land Use Codes (LUC) are classed as Residential or Primary Production Land?

The Land Use Codes (LUCs) within the following LUC headings are therefore considered to be residential land or primary production land:

• Residential (LUC 1100-1999 with some exceptions);
• Primary production (LUC 9100-9990);
• Vacant Land – Urban (LUC 4100);
• Vacant Land with minor improvements (LUC 4101);
• Vacant Land  – Rural Residential (LUC 4150); and
• Vacant Land with minor improvements – Rural Living (LUC 4151).

See full list of LUCs (PDF 562KB)

The LUC can also be obtained from the Valuation Details Product as part of the Property Interest Report or purchased separately from the Land Services Group.

Qualifying Land

What is qualifying land.

The Commissioner will generally rely on Land Use Codes (LUCs) as determined by the Valuer-General to determine the use of the land. The LUCs within the following LUC headings are considered to be Qualifying Land and may be eligible for the stamp duty reduction:

• Commercial (LUC 2000-2990);
• Industrial (LUC 3100-3909);
• Vacant Land* (with some exceptions) (LUC 4110-4600)
• Institutions (LUC 5100-5990);
• Public Utilities (LUC 6100-6990);
• Recreation (LUC 7100-7900);and
• Mining and Quarrying (LUC 8100-8409).

The following residential Land Use Codes will also be taken to be qualifying land:

• Hotel (LUC 1810);
• Motel (LUC 1820); and
• Hotel/Motel Community (LUC 1831).

*where the land is within a zone established by a Development Plan under the Planning, Development and Infrastructure Act 2016 that envisages the use, or potential use, of the land as non-residential and non-primary production.

For a conveyance of land which you consider to be qualifying land but does not have a LUC from the above categories, the conveying document must be submitted to the Commissioner for assessment advising the LUC, the actual use of the land as at the date of the conveyance and any other details to evidence that the land should be regarded as qualifying land.

Examples of such land include:

What is not qualifying land?

The Land Use Codes (LUCs) within the following LUC headings are not considered to be qualifying land:

• Vacant Land* – Urban (LUC 4100);
• Vacant Land* with minor improvements (LUC 4101);
• Vacant Land*  – Rural Residential (LUC 4150); and
• Vacant Land* with minor improvements – Rural Living (LUC 4151).

*unless the land is within a zone established by a Development Plan under the Planning, Development and Infrastructure Act 2016 that envisages the use, or potential use, of the land as non-residential and non-primary production.

What is the Foreign Ownership Surcharge (FOS)?

Foreign persons who acquire an interest in residential property in South Australia are required to pay a surcharge of 7% on the value of the residential land .

RevenueSA Online will reflect the FOS value based on the data provided in the Commonwealth Reporting Portal Workspace. Where the FOS is applicable, the Workspace will need to reflect the fractional interest to be acquired by the foreign person. For example, if a foreign person is acquiring a 100% interest in the property then the Party Interest Transferred field will be completed as 1/1. If the interest is 50%, then enter ½. RevenueSA Online will then determine and display the FOS value.

For further information, including definitions of foreign persons, refer to RevenueSA’s Foreign Ownership Surcharge page.

For information on visa descriptions and to determine whether a visa is a permanent visa (FOS does not apply) or a temporary visa (FOS does apply) refer to:  https://immi.homeaffairs.gov.au/visas/getting-a-visa/visa-listing

If the conveyance is for multiple titles comprising both land coded as Residential (liable to the FOS) and non-residential the conveying document(s) must be submitted to the Commissioner for assessment with advice as to the apportionment of the consideration for the land coded as Residential and the land coded as Non-Residential.

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• Business tax

Stamp Duty Land Tax Manual

Sdltm21590 - example 1, simple assignments of rights.

This is an example of how the rules apply to an assignment of rights.

• A enters into a sale and purchase agreement with B for some land with a consideration of £1 million payable on completion.
• B assigns its rights under the contract to C for a payment of £100,000.
• C completes the acquisition and pays A £1 million.

The intended outcome is that B should have to make a land transaction return for a transaction with consideration of £1 million but can include a claim for full relief. C should have to make a land transaction return with consideration of £1.1 million.

The transactions fall within Schedule 2A in the following way:

• The transactions fall within the definition of a pre-completion transaction in paragraphs 1(1) and (2).
• The pre-completion transaction is an ‘assignment of rights’ that falls within paragraph 2(1).
• Under paragraph 1(1), 1(2) and 2(3): the original contract is the contract between A and B, the original purchaser is B, the transferee is C and the transferor is B.
• The transferee is not regarded as entering into a land transaction by reason of the pre-completion transaction (paragraph 3).

The position of the transferee, C, is covered mainly by paragraph 4.

• C is the purchaser under a land transaction under section 44(3) (paragraph 4(4)). Paragraph 4(2) provides that this is not prevented by the words ‘between the same parties’ in section 44(10).
• Since paragraph 4(3)(a) is satisfied, paragraph 4(5) applies. Paragraph 4(5), read with paragraph 4(9), determines how paragraph 1 of Schedule 4 should be read to determine the chargeable consideration for C’s acquisition. The result is that both the £1 million given to A and the £100,000 given to B are included - total £1.1 million.
• Under paragraph 8(3) the vendor for C’s acquisition is A; the land transaction return should be completed accordingly.

The position of the transferor, B, is covered mainly by paragraph 5, with relief available under paragraph 15.

• The transactions fall within paragraph 5(1). Under that sub-paragraph, B is deemed to be the purchaser under a notional land transaction with the same effective date as C’s land transaction.
• The chargeable consideration for the notional land transaction is dealt with in paragraph 5(3): it is the total of amount A and amount B. Amount A is £1 million as that is the consideration given by C to A under the original contract (paragraph 5(5) ‘amount A’ (a)). Amount B is nil, so the chargeable consideration is £1 million.
• The transactions fall within paragraph 15 so B can claim full relief from tax (subject to the conditions outlined in paragraphs 15 and 18) under sub-paragraph (4).

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Stamp Duty & Registration - Deed of Assignment

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Allahabad High Court On Stamp Duty On Debt Assignment

Contributor

Introduction

Assignment of debt is one of the most common forms of transactions in financial markets. It essentially entails transfer of a debt from a creditor (assignor) to a third-party (assignee).

One of the biggest challenges faced in debt assignment transactions in India is the significant stamp duty implication on the deed of assignment. Considering the volume of assignment transactions undertaken generally by banks and financial institutions or by asset reconstruction companies (" ARCs "), the stamp duty levied becomes a significant cost in such transactions.

The Constitution of India (" Constitution ") confers upon the Parliament and each State Legislature the power to levy taxes and other duties. The subjects on which the Parliament or a State Legislature or both can legislate are specified in the Seventh Schedule of the Constitution. The Seventh Schedule is divided into 3 (three) lists:

• Union List;
• State List; and
• Concurrent List.

The Parliament has the exclusive power to legislate on the subjects enumerated in the Union List. The State List enumerates the subjects on which each State Legislature can legislate and such laws operate within the territory of each State. The Parliament, as well as the State Legislatures, have the power to legislate over the subjects listed in the Concurrent List.

The entry pertaining to levy of stamp duty in the Union List is as follows: -

" 91. Rates of stamp duty in respect of bills of exchange, cheques, promissory notes, bills of lading, letters of credit, policies of insurance, transfer of shares, debentures, proxies and receipts."

The entry pertaining to levy of stamp duty in the State List is as follows: -

" 63. Rates of stamp duty in respect of documents other than those specified in the provisions of List I with regard to rates of stamp duty. "

The entry pertaining to levy of stamp duty in the Concurrent List is as follows: -

" 44. Stamp duties other than duties or fees collected by means of judicial stamps, but not including rates of stamp duty . " [emphasis supplied]

From the aforementioned entries, it is clear that the power to legislate on the rate of stamp duty chargeable on instruments of debt assignment (since it is not covered under Entry 91 of the Union List) is with the State Legislature. However, the power to determine whether stamp duty can be charged or not on a specific instrument is in the Concurrent List.

In this regard, it may be noted that pursuant to the Enforcement of Security Interest and Recovery of Debt Laws and Miscellaneous Provisions (Amendment) Act, 2016 (" Amendment Act "), the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (" SARFAESI ") and the Indian Stamp Act were amended to provide for an exemption from stamp duty on a deed of assignment in favour of an ARC.

As mentioned above, the power to legislate on whether stamp duty is payable or not on an instrument is in the Concurrent List. Therefore, the Parliament has the power to legislate on the aforesaid subject.

Pursuant to the Amendment Act, section 5(1A) was inserted in SARFAESI which provides that any agreement or document for transfer or assignment of rights or interest in financial assets under section 5(1) of SARFAESI in favour of an ARC is not liable to payment of stamp duty.

In several States, notifications have been issued for remission and/ or reduction of stamp duties on debt assignment transactions. For instance, in Rajasthan, the stamp duty chargeable on any agreement or other document executed for transfer or assignment of rights or interests in financial assets of banks or financial institutions under section 5 of SARFAESI in favour of ARCs 1 has been remitted. Further, in Maharashtra, the stamp duty on instrument of securitization of loans or assignment of debt with underlying security has been reduced to 0.1% (zero point one percent) of the loan securitized or the debt assigned subject to a maximum of Rs. 1,00,000 (Rupees one lac) 2 .

Certain State Governments, such as those of Rajasthan and Tamil Nadu have reduced the stamp duty based on the nature of the financial asset being assigned. In Rajasthan, the stamp duty has been reduced for assignment of standard assets whilst in Tamil Nadu, the stamp duty has been reduced for assignment of non-performing assets and assignment in favour of ARCs.

This paper discusses a decision passed by the Allahabad High Court in the case of Kotak Mahindra Bank Limited v. State of UP & Ors. 3 (" Kotak case "), where it was held that an instrument of assignment is chargeable with stamp duty under Article 62(c) (Transfer) of Schedule 1B of the Indian Stamp Act, as applicable in Uttar Pradesh (" UP Stamp Act "), as opposed to Article 23 (Conveyance) of Schedule 1B of the UP Stamp Act.

The stamp duty payable in various States under Article 23 or the relevant provision for conveyance is on an ad valorem basis whereas the stamp payable under Article 62(c) or relevant provision for transfer of interest secured, inter alia , by bond or mortgage deed, is a nominal amount. For instance, in Uttar Pradesh, the stamp duty payable under Article 62(c) is Rs. 100 (Rupees one hundred).

Decision in the Kotak case

In the Kotak case, Kotak Mahindra Bank Limited (" Kotak ") had purchased and acquired certain loans from State Bank of India (" Assignor ") along with the underlying securities.

The question for consideration before the full bench of the Allahabad High Court was whether the deed executed by the applicant with the underlying securities would be chargeable with duty under Article 62(c) or Article 23 of Schedule 1B of the UP Stamp Act.

The court observed that in order to determine whether an instrument is sufficiently stamped, one must look at the instrument in its entirety to find out the true character and the dominant purpose of the instrument. In this case it was observed that the dominant purpose of the deed of assignment entered into between Kotak and the Assignor (" Instrument "), was to transfer/ assign the debts along with the underlying securities, thereby, entitling Kotak to demand, receive and recover the debts in its own name and right.

Article 11 of Schedule 1B of the UP Stamp Act provides that an instrument of assignment can be charged to stamp duty either as a conveyance, a transfer or a transfer of lease. The court observed that since the Instrument was not a transfer of lease, it would either be a conveyance or a transfer.

The court referred to the definition of conveyance in the UP Stamp Act, which reads as follows:

" Conveyance" . — "Conveyance" includes a conveyance on sale and every instrument by which property, whether movable or immovable, is transferred inter vivos and which is not otherwise specifically provided for [by Schedule I, Schedule IA or Schedule IB] [as the case may be];" [emphasis supplied]

The court held that the term conveyance denotes an instrument in writing by which some title or interest is transferred from one person to other and that the use of the words "on sale" and "is transferred" denote that the document itself should create or vest a complete title in the subject matter of the transfer, in the vendee. In this case since under the Instrument, the rights of the Assignor to recover the debts secured by the underlying securities had been transferred to Kotak, it was held that the requirement of conveyance or sale cannot be said to be satisfied.

The court further observed that debt is purely an intangible property which has to be claimed or enforced by action and not by taking physical possession thereof, in contrast to immovable and movable property. Where a transaction does not affect the transfer of any immovable or movable property, Article 23 of Schedule 1B cannot have any applicability.

The court's view was that since debt along with underlying securities is an interest secured by bonds and/ or mortgages, transfer of such debt would be chargeable under Article 62(c).

The court further clarified that under the Instrument, merely the right under the contract to recover the debts had been transferred. Since the borrower(s) had never transferred the title in the immovable property given in security to the Assignor, the Assignor could merely transfer its rights i.e. mortgagee's rights in the property to recover the debts. It was further observed that the Assignor never had any title to the underlying securities and that it merely had the right to enforce the security interest upon default of the borrower(s) in repayment. The right transferred to Kotak was primarily the right to recover the debts, in accordance with law, by proceeding against the underlying security furnished by the bonds/ mortgage deed(s).

Therefore, the court held that the Instrument was chargeable with stamp duty under Article 62(c) of Schedule 1B of the UP Stamp Act.

Whilst coming to the conclusion that assignment of debt would not constitute a conveyance, the court referred to the definition of conveyance to state that debt is an intangible property which has to be claimed or enforced by action and not by taking physical possession thereof, in contrast to immovable and movable property.

In this regard, it may be noted that there are various judicial precedents 4 , where it has been held that an interest (including mortgage interest) in immovable property is itself immovable property.

However, even assuming assignment of debt with underlying securities over immovable property amounts to a conveyance, it may be pertinent to refer to the definition of conveyance in the UP Stamp Act which specifically excludes a conveyance which is otherwise provided for by the Schedule to the UP Stamp Act.

Article 62(c) of the UP Stamp Act reads as follows:

" 62. Transfer (whether with or without consideration) –

(c) of any interest secured by a bond, mortgage- deed or policy of insurance-- "

In view of the above, transfer of any interest secured by a mortgage deed, which is covered under Article 62(c), would be excluded from the meaning of conveyance and would be chargeable to stamp duty under Article 62.

In this regard it may be pertinent to refer to the definitions of 'bond' and 'mortgage deed' under the UP Stamp Act, which is as follows:

" " Bond " includes-

• any instrument whereby a person obliges himself to pay money to another, on condition that the obligation shall be void if a specified act is performed, or is not performed, as the case may be;
• any instrument attested by a witness and not payable to order or bearer, whereby a person obliges himself to pay money to another; and
• any instrument so attested, whereby a person obliges himself to deliver grain or other agricultural produce to another "

" " Mortgage-deed ". — "mortgage-deed" includes every instrument whereby, for the purpose of securing money advanced, or to be advanced, by way of loan, or an existing or future debt, or the performance of an engagement, one person transfers, or creates, to, or in favour of another, a right over or in respect of specified property; "

In view of the above, where a debt secured by a bond or a mortgage deed is assigned under a deed of assignment, the stamp duty payable on such deed of assignment will be under Article 62(c) of the UP Stamp Act or corresponding provisions of the Stamp Act of other States.

However, in cases of unsecured loans or loans secured by an equitable mortgage (where there is no mortgage deed), the deed of assignment would attract ad valorem stamp duty chargeable on conveyance, since the same will not get covered under Article 62(c) or similar provisions in other states.

The market practice until now has been to stamp the deed of assignment of debt under the relevant article for Conveyance in the applicable Stamp Act. In fact, in States such as Maharashtra, the State Government has issued notifications for reduction of stamp duty on a deed of assignment under the article for Conveyance.

The judgment passed by the Allahabad High Court in the Kotak case may prove to be a welcome step in reducing the incidence of stamp duty on debt assignment transactions. However, it would need to be seen whether in other States a similar view is taken by stamp duty authorities.

1. Notification No. F4(3)FD/Tax/2017-110 dated March 8, 2017 issued by Finance Department (Tax Division) Government Of Rajasthan.

2. Notification No.Mudrank-2002/875/C.R.173-M-1 dated May 6, 2002 issued by Revenue & Forests Department, Government of Maharashtra.

3. Reference Against MISC. Acts. No. 1 of 2016, order dated February 9, 2018.

4. Bank of Upper India Ltd. (in liquidation) v. Fanny Skinner and Ors. , AIR 1929 All 161. See also Prahlad Dalsukhrai and Ors. v. Maganlal Muljibhai Tewar , AIR 1952 Bom 454 and Harihar Pandey v. Vindhayachal Rai and Ors. , AIR 1949 Pat 170.

Originally published February 13, 2018.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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• (1) Introduction
• (3) Formal Agreement for Sale and Purchase
• (2) Provisional Agreement for Sale and Purchase
• (4) Redemption
• (5) Assignment
• (6) Mortgage
• (7) Stamp Duty
• (8) Land Registration
• (9) Completion
• (11) Sub-sale and Sub-purchase
• (12) Conveyancing Practice and Procedure

With effect from 1 April 2010, the rate of ad valorem stamp duty is as shown below:

Deferring payment of stamp duty:

With effect from 1 April 1999, an application may be made to the Stamp Office to defer the payment of stamp duty. The following conditions have to be satisfied for deferment of payment :

If the application is approved, the time for payment of stamp duty on the agreement will be as follows:

If the application is not approved, the collector will notify the applicant (or his solicitors) and require the applicant to pay the stamp duty payable.

Time for payment of stamp duty:

If there is no approval for deferment of payment of stamp duty, the time for payment of stamp duty will be as follows:

The time for payment of stamp duty on assignment is within 30 days after the date of execution of the assignment.

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Stamp Duty Imposed For Transfer Of Properties In Malaysia

Stamp duty is one of the unavoidable costs in property purchase in Malaysia.

Under the Stamp Act, stamp duty is tax payable on the written documents during the sale and/or transfer of a real property. At least two documents will attract stamp duty in a conveyancing transaction:

i. the Sale and Purchase Agreement; and ii. the Memorandum of Transfer (if the individual title/strata title of the Property has been issued) or the Deed of Assignment by way of transfer (if the strata title of the Property has yet to be issued).

In a conveyancing transaction, the Purchaser has to pay ad-valorem stamp duty on the written instrument being the conveyance of sale, ie. the Memorandum of Transfer or the Deed of Assignment by way of Transfer and a nominal stamp duty at on every copy of the Sale and Purchase Agreement.

The ad-valorem stamp duty is variable cost payable on the Memorandum of Transfer or the Deed of Assignment by way of Transfer will be calculated based on either the purchase price of the Property or the market value of the Property, whichever is higher, whereas the nominal stamp duty are charged at a set price of RM10.00 on every copy of the document.

In a conveyancing transaction, the Memorandum of Transfer or the Deed of Assignment by way of Transfer has to be submitted to the Collector of Stamp Duty for assessment of such ad-valorem stamp duty payable. Take note that the amount of purchase price stated in the Memorandum of Transfer or the Deed of Assignment by way of Transfer by the parties is not binding on the Collector of Stamp Duty and they have discretion to call upon a valuation expert to obtain the market value of the Property.

From 1st July 2019 onwards, the calculation of the ad-valorem stamp duty of transfer pursuant to normal sub-sale Sale and Purchase Agreement is as follows:-

In cases where the transfer is done pursuant to Sale and Purchase Agreement entered into with a developer, two situations can arise:-

i. When the individual title is available at the time of entering into the Sale and Purchase Agreement, the stamp duty assessed will be based on the purchase price stated in the Memorandum of Transfer and Sale and Purchase Agreement OR the market value of the Property;

ii. When the individual title is not issued during the signing the Sale and Purchase Agreement, the Sale and Purchase Agreement and the Deed of Assignment will carry only the nominal stamp duty of RM10.00 on every copy of the documents. When the individual title is issued subsequently, the stamp duty assessed will be based on the market value of the Property on the date of the Sale and Purchase Agreement entered into with the developer and not the date of the Memorandum of Transfer which is drawn up substantially later.

In circumstances where the transfer is done pursuant to a Deed of Assignment which has already been duly stamped (because the Property was bought when the individual title was not issued), then the stamp duty payable on the transfer is a nominal sum of RM10.00 pursuant to section 11 of the Stamp Act subject to production of the original Deed of Assignment which has already been stamped. Upon issuance of individual title of the Property, an application has to be made for endorsement on the Memorandum of Transfer to evidence that an ad-valorem stamp duty has been paid on the Deed of Assignment prior to the issuance of the individual title.

Further, transfer of property pursuant to grant of probate or letters of administrators will carry a nominal duty of RM10.00.

Many transfers are made between families or close relatives for love and affection without any Sale and Purchase Agreement. Take note that the ad-valorem stamp duty for some transfers for love and affection between families can be exempted either fully or partially.

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When Do I Pay Stamp Duty on a Commercial Lease in NSW?

By Lianne Tan Lawyer

Updated on October 30, 2023 Reading time: 5 minutes

This article meets our strict editorial principles. Our lawyers, experienced writers and legally trained editorial team put every effort into ensuring the information published on our website is accurate. We encourage you to seek independent legal advice. Learn more .

Creation of Lease

Transfer of lease, surrender of lease, key takeaways.

Stamp duty is a tax that’s imposed on the purchase of assets and transactions of property. If you are transferring or surrendering a lease, chances are, you will have been asked to pay stamp duty. So, when is it payable and when is it not?  In 2008, New South Wales abolished stamp duty on new leases. However, there are still certain circumstances where you, a tenant, must pay stamp duty under a commercial or retail lease . We set these out below.

This guide will help you to understand your options when you purchase a business with leased premises.

You must pay stamp duty on a new lease only where you make a lump sum payment to encourage the landlord to grant the lease.

For example, this occurs where the landlord requires a premium payment or if you enter into a lease after the landlord agrees to grant an option for an agreed amount.

The landlord usually sets this amount and you may negotiate it. However, note that as long as an amount is payable, this will be a capital payment  (i.e. the actual amount paid upfront). If it is a capital payment, it will be subject to stamp duty.

Retail Leases

For retail leases , key money payments are not permitted. The definition of key money includes premium payments.  As such, if you are a retail tenant, it is unlikely that you must pay any stamp duty on the registration of a retail lease.  

Premium Payment v Up-Front Rent

There is a difference between premium payments and rent up-front or in lump sum instalments.

The payment must be considered a capital payment. In general, if you pay a sum simply to gain access to the right to lease, rather than the use of the premises, this is likely to be considered a premium. Payments made for the use of the premises will be seen as ordinary rent, and no duty is required.

Exempt Leases

Some leases are exempt from stamp duty even if a premium is payable. These include leases:  

• of units in a retirement village ;
• of premises to the Home Care Service of NSW; or
• for approved nursing homes.

You must pay stamp duty on the assignment or transfer of a lease.   The amount will depend on whether you are paying any money specifically for the transfer.

Even if you are not paying any money for the transfer, you must still pay a nominal sum of $10 for each time you transfer your lease to the NSW Office of State Revenue . The Land and Property Information office is unlikely to accept a transfer without the nominal stamp duty, which will, in turn, delay the assignment.

As the assignment or transfer of a lease often occurs together with the sale of a business, there may also be other dutiable amounts payable.

For example, if the sale of business includes a transfer of lease and goods, then the following nominal stamp duty amounts will be payable:

• $10 on the Sale of Business Agreement;
• $10 for the duplicate Sale of Business Agreement; and
• $10 for the Transfer of Lease.

You must then pay a minimum of $30 if the transfer of the lease occurs in conjunction with the sale of the business. Importantly, the nominal rate is subject to an increase.

Finally, the surrender of a lease  is also subject to stamp duty. This is where you voluntarily give up the lease to the landlord before your lease term has expired.

The amount of duty will also depend on the specific circumstances of the surrender. If the landlord requires you to surrender the premises and pays you an amount as compensation, then this amount is subject to duty.

On the other hand, if you voluntarily surrender the lease, then similar to the lodgement of a Transfer of Lease form, you must pay a nominal $10 assessment duty.

Stamp duty is generally not payable on the registration of a lease unless key money or a premium has been paid. In addition, stamp duty will not be payable for the registration of a retail lease. You will have to pay a nominal $10 for a transfer or voluntary surrender of a lease if no other money is specifically being paid. 

If you have any questions about when to pay stamp duty on your lease, our experienced leasing lawyers can assist as part of our LegalVision membership. You will have unlimited access to lawyers to answer your questions and draft and review your documents for a low monthly fee. Call us today on 1300 544 755 or visit our  membership page .

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Home » Property Trends » Stamp duty and registration charges in Tamil Nadu 2024

Stamp duty and registration charges in Tamil Nadu 2024

The stamp duty charges in Tamil Nadu applicable on property transactions is quite high compared to other Indian states.  This means, when you buy a property in the state, you will need to reserve a significant amount towards the mandatory stamp duty and registration charges .

Table of Contents

Stamp duty is the fee that you are liable to pay to the authorities, in order to register a property under your name. Registration fees are paid to the same authority for doing all the paper work to execute this process.

The state government determines the Guideline Value in Tamil Nadu, which is the minimum value of a property at which property can be registered. Click to read about the latest Guideline Value in Tamil Nadu .

See also: All about stamp duty in MP

Let us discuss the monetary implications of this on a home buyer in Tamil Nadu, in detail. Also, we share the various stamp duty and land or property registration fees applicable in Tamil Nadu .

See also: All about gift deed stamp duty

How is stamp duty in Tamil Nadu calculated?

A property buyer must pay stamp duty in Tamil Nadu as determined by the state government. Stamp duty is charged on the ready reckoner rate / circle rate (also called guideline value in Tamil Nadu) or consideration value of the property, whichever is the higher value.

If the agreement value of a residential property is Rs 50 lakh and the guideline value is Rs 40 lakh, the stamp duty will be calculated on the higher value, that is, Rs 50 lakh.

For example, a person purchased a property of Rs 35 lakh, which is lower than the guideline value. In this case, the stamp duty will be paid on the higher value, which is Rs 40 lakh. Stamp Duty in Tamil Nadu is 7% of the guidance value. Therefore, the person will pay Rs 2,80,000 as stamp duty for this property. The registration charges in Tamil Nadu are 4% of the guidance value. Therefore, the person will pay Rs 1,60,000as registration charges for this property.

Tamil Nadu land registration fees calculator 

Stamp duty and registration charges add up to the overall costs involved in property purchase. There are many online tools for calculating property registration fees.

One can use the online Stamp duty and registration fee calculator by following the steps given below:

• Go to the Stamp Duty calculator tool
• Select the state
• Enter property details such as property value and total area
• Click on the calculate link
• The Tamil Nadu land registration fees calculator will display the amount.

Stamp duty and registration charges in Tamil Nadu for various documents

Source: Registration Department, TN

See also: Stamp duty in Gujarat and registration charges

Note: Stamp duty is always shown in percentage terms. The stamp duty amount is a specific percentage of the property transaction value. This means that if the buyer has purchased the property for Rs 50 lakh, he has to pay 7% of Rs 50 lakh as the stamp duty in Tamil Nadu. He has to pay another 4% of Rs 50 lakh as the land registration fees in Tamil Nadu. So, the buyer will have to keep 11% of Rs 50 lakh, to pay these state duties.

The charges are applicable as per the Tamil Nadu Stamp Act, 2019 and the Indian Stamps Act 1899. According to the acts, payment of stamp duty and registration charges in Tamil Nadu is mandatory for all property transactions. As per the Tamil Nadu Stamp Act, stamp duty is compulsory for some deeds.

See also: All about IGR Maharashtra

Registration of Settlement Deed

A settlement deed refers to a legal document wherein the parties settle their differences or disputes, in cases related to immovable properties such as land. The document needs to be registered for it to be valid. The documents required for settlement deed in Tamilnadu during registration include original title document (and Patta), encumbrance certificate of the property, identity proof and Aadhaar proof of the parties.

The registration fees that must be paid in case of settlement are mentioned below:

• Stamp duty which is 1% of the market value of the property, subject to a maximum of Rs. 25000. Registration fees of 1% of the market value of the property subject to a maximum of Rs. 4000. These charges are applicable for settlement in favour of family members.
• The fees applicable for settlement in other cases include stamp duty of 7% of the market value of the property and registration fee of 4% of the market value of the property.

See also: All about Tamil Nadu’s Patta Chitta document

What is stamp duty?

Stamp duty refers to the tax imposed by the state government on the sale or transfer of property according to the Section 3 of the Indian Stamp Act, 1899. The amount of stamp duty is a specific percentage of the value of the property and it varies from state to state. The stamp duty on property registrations form a significant part of the government’s revenue.

What are property registration charges?

Property registration charges refer to a fee that must be paid to the state government for registering the property document in the government records. The amount is a specific percentage of the value of the property and varies from state to state.

Tamil Nadu property registration charges: Quick facts

About tamil nadu stamp duty act.

A property buyer in Tamil Nadu is required to pay the stamp duty and registration fees to the state government, according to the Indian Stamps Act, 1899 and Tamil Nadu Stamp Act, 2019. The payment of stamp duty and registration charges in Tamilnadu are applicable in property transactions related to sale, lease, partition and resale of a property.

Know about: Hosur 

Tamil Nadu property registration charges for women 2024

While most states offer some sort of rebate if a property is registered in the name of a woman, this is not the case in Tamil Nadu. Men and women have to pay the same stamp duty in Tamilnadu and registration fees. The stamp duty fee is 7% of property market value while the registration charges in the state are 4% of property value. A property buyer is required 11% of property value for the registration of their property.

In contrast, women home buyers in national capital Delhi pay 4% stamp duty as against the 6% stamp duty that a man has to pay here.

What is the guideline value in Chennai 2024?

The guideline value refers to the minimum value of a property as decided by the state value below which a property transaction cannot take place. Generally, the guideline value is lower than the market value. In some cases, the market value may be lower than the guideline value of land. When registering a property, a buyer is required to pay stamp duty based on the guideline value or the market value, whichever is higher.

Property value is determined based on guideline value using the following formula:

Value of a property = Guideline value in Rs per sqm X built-up area in sqm

Factors that impact Stamp Duty in Tamil Nadu

The stamp duty one is required to pay depends by several factors. That includes:

• Property’s market value
• Type of property and the number of floors
• Property location (suburb, metropolitan, rural area, or city)
• Intended usage (whether residential or commercial)
• Age of the property

Stamp duty charges in Tamil Nadu are different for properties situated within and outside the city’s municipal limits. One may have to pay higher amount in case it is located within city’s municipal.

The amenities offered along with the property are also important in determining the stamp duty charges. For example, if you are opting for a flat in a housing project in Chennai with facilities such as swimming pools, elevators, community hall, a clubhouse, a gym, etc., then you may to have to pay a high stamp duty.

Similarly, if you are investing in a commercial property, the stamp duty and tregistration charges will be more compared to that of a residential property.

Factors that impact registration charges in Tamil Nadu

Registration charges you pay when purchasing a property may depend on several factors such as the type of property you have purchased. Considering whether the office or apartment is a unit of a multi-storey plot, the calculation will be done based on the super built-up area.

In case of plots or lands, the guideline value of the land is multiplied by the total square foot area of land.

If the property is an independent house or a villa, then the registration amount is calculated depending on the total constructed area.

Go to the official website of the Registration Department known as TNREGINET website to know more about stamp duty payment.

See also: Can stamp duty be refunded if a property deal is cancelled?

Tamil Nadu property registration charges’ impact on final property price

Buyers need to be aware of the property or land registration fees in Tamilnadu as it can impact their overall property purchase.

Let us examine how to calculate the impact of stamp duty and property registration charges in Tamilnadu on the final property price : 

Suppose Gokul bought a property in Chennai that has a guideline value of Rs 40 lakh. He will have to pay the following charges:

• Registration fees: 4% of Rs 40 lakh= Rs 1,60,000
• Stamp duty: 7% of Rs 40 lakh = Rs. 2,80,000

Hence, the effective cost of owning this property comes to Rs 44.40 lakh.

The Tamil Nadu government recently issued an order to revise the stamp duty charges for property registration. The charges one has to pay is 1% of the property’s market value. Moreover, the registration charges for construction agreements have increased from 1% to 3%, with effect from July 10, 2023. This will directly have a financial implication on the final property cost for buyers.

See also: Everything about Tamil Nadu EC certificate

How to pay stamp duty online in Tamil Nadu?

The payment of stamp duty and land or property registration fees in Tamil Nadu can be done online, via the e-stamping facility. Stock Holding Corporation of India Limited (SHCIL) is the central record keeping agency (CRA) appointed by the central government for granting e-stamp certificates in the country.

One can visit the SHCIL website and get information on transactions that require stamping and the addresses of collection centres.

Here’s a step by step guide:

• Go to the SHCIL website
• Click e-stamp services
• Select Tamil Nadu state from the dropdown

• Fill out the application form. Click on the ‘Download’ tab.

Now, submit the form at the Authorised Collection Center along with payment for the stamp certificate.

The various modes of paying stamp duty in the e-stamping system, include NEFT, RTGS, pay order, demand draft, cheque, cash and account to account transfer. One should reach out to the nearest e-stamping centre before initiating an electronic fund transfer.

Also read: What is e-stamping and how is it done?

How to pay stamp duty offline in Tamil Nadu?

Property buyers can pay the TN stamp duty and registration charges by visiting the sub-registrar’s office in their location. The procedure involves filing an application form, submitting the document and paying the required charges for land or property registration. One the process, the applicants will get the stamp duty certificate. The payment can be made through cash, demand draft, cheque, NEFT, RTGS or debit/ credit card.

One can obtain the stamp paper from a treasury or through the franking method that is a process used for getting a property document stamped. The cost that must be paid is referred to as franking charges. The document becomes legally valid once it is stamped.

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Property registration procedure in Tamil Nadu

Proper inspection of the property and due diligence are crucial before proceeding with a property sale agreement or finalising price negotiation. It is advisable to seek the help of a legal professional.

The sale deed must be prepared after the due diligence is completed. The agreement must be drafted on stamp paper. The value of the stamp paper will depend on the property registration charges. It can be prepared by an advocate or a licensed document writer.

If you are buying a property in Chennai, it must be registered within four months of the execution of the agreement of sale. After the property transaction, the buyer should pay the stamp duty and the applicable registration charges. Visit the Registrar/sub-registrar’s office of the jurisdiction where the property was purchased to complete the property registration process.

Documents required for property registration in Tamil Nadu

Property buyers need to provide the following documents during property registration in Tamil Nadu:

• Identity proofs of property owner and witnesses
• Two passport-sized photographs
• Stamp duty receipt
• No objection certificate (NOC)
• Power of attorney
• Municipal tax bill

Info. regarding: Apartments for rent in Chennai

Tax benefits for stamp duty payment in Tamil Nadu

Property buyers are required to pay stamp duty and registration charges, which significantly increases their overall cost. As per the government rules, the maximum tax imposed on the payment of stamp duty and registration charges will be limited to Rs 1,50,000 only. This benefit can be claimed by Hindu Undivided Families (HUFs) and individuals. One should approach and check with state tax authorities before paying stamp duty and registration charges in Tamil Nadu.

You can visit the official portal of the Income Tax Department to get information about the situation where you are eligible to claim a tax deduction.

Tamil Nadu Stamp Paper: Things to know

Property buyers must be aware of the following points when registering a property in Tamil Nadu.

• The stamp duty is collected for validating the registration agreement of any property.
• One cannot claim property ownership without paying the stamp duty.
• The document serves as a legal document for property ownership and is considered valid in court for legal issues.
• One must obtain a non-judicial stamp paper from the court and treasury.
• There is no provision for purchasing e-stamp paper in Tamil Nadu.

When to pay stamp duty and registration charges?

If you have purchased a property, you must complete the property registration process within four months of execution of the sale deed. If registration is delayed, penalties are levied based on the time taken to register:

• Up to 1 week, 25% of registration charge
• For 1 month, 75% of registration charge
• Up to 4 months, 100% of registration charge

How to check the market value of properties in Tamil Nadu?

Property buyers in Tamil Nadu can find out the market value of properties, also known as the guideline value, through the official Registration Department at portal https://tnreginet.gov.in/portal/ .

• Visit the TNREGINET portal and click on the ‘Guideline Value’ tab. Click on the latest link for the revised guideline value.
• Provide the required details such as street or survey numbers.
• Click on the search option to check the streetwise details.

What is the procedure for property name transfer in Tamil Nadu?

The process for name change for land registration in Tamil Nadu. Visit the Taluk or Village Administrative office in your locality. Fill the patta transfer form and submit it along with the required, duly attested documents. The application may be rejected or accepted based on the department’s report. If approved, the name change will be updated and issued within 15 to 30 days.

Impact on increase in Stamp Duty and registration charges in Tamil Nadu

The Stamp Duty and registration charges in Tamil Nadu were recently revised by the state government. This will result in property buyers paying a higher amount for their property purchase, thus impacting their finances. Significant delays in the payment of property registrations were seen in the state. Moreover, increase in stamp duty and property registration charges also has an impact on home loan borrowers, with many banks not prepared to support the increased property purchase costs immediately. The hike in property registration charges has affected property purchases in both under-construction and ready-to-move projects.

Land registration in Tamil Nadu

How to register land in tamil nadu.

• Purchase stamp paper, the value of which will depend on the property registration charges.
• Draft the sale deed with the help of a qualified professional.
• In Tamil Nadu, land registration must be completed within four months of signing the sale deed. Visit the nearest sub-registrar under whose jurisdiction the property falls to complete the registration process.

How do you calculate land?

In case of a regular plot of land, measure the length and breadth and multiply the results. The measurement of the area of a plot of land can be in any unit.

How to calculate land value in Tamil Nadu?

The Guideline value in Tamil Nadu is the minimum value of a property, set by the state government, at which property can be registered. The Department of Stamps and Registration is the authority responsible for determining the property guideline value in Tamil Nadu. One can find the land guideline value by visiting the official TNREGINET portal.

Check out: House for sale in Coimbatore 

What are agricultural land registration charges in Tamil Nadu?

For buying agricultural land in Tamil Nadu, a stamp duty of 7% of the market value of the property and registration fee of 4% of the property value is applicable. The charges are applicable for the sale, resale and land registration in Tamil Nadu.

Land registration fees in Tamilnadu for a resale property

The Tamil Nadu registration charges for a resale property is 1% of market value or the agreement value of the property. The stamp duty that will be levied on the same is 7%.

GST for land registration in Tamil Nadu

New GST rates were released based on the GST Council meeting on February 24, 2019. The GST rates in residential areas are:

• 5% GST without ITC (Input Tax Credit) on residential properties, not part of an affordable housing segment.
• 1% GST without ITC on residential properties included under affordable housing segment.

12% GST in Tamil Nadu is applicable, which does not apply to sale or resale of old properties.

• Total carpet area of the property should not exceed 60 square metre in metropolitan regions.
• Total carpet area should not exceed 90 square metre in non-metropolitan cities.
• Total value of the property should not exceed Rs 45 lakh. It is applicable in metropolitan and non-metropolitan regions.

Stamp duty in Tamil Nadu: Latest updates

State govt can charge stamp duty on registration of merger of firms: madras hc.

February 27, 2024: The Madras High Court has ruled that the state government can charge stamp duty on registration of merger of companies which has been approved by courts or tribunals, according to media reports. However, the first bench of Chief Justice SV Gangapurwala and Justice D Bharatha Chakravarthy said that if the duty has been paid in other states, it will be adjusted against the value calculated in Tamil Nadu. The authorities can collect a stamp duty of 2% of the market value of the immovable property.

Tamil Nadu announces new property values for streets, roads

January 5, 2024: The Tamil Nadu government, on January 3, 2024, announced the composite value for property on more than three lakh roads and streets across the state, according to a TOI report. The composite value of nearly 1.5 lakh streets and roads in Chennai was announced. The highest value is 28,500 per square foot (sqft) in and around the Boat Club area. It must be noted that the registration charges are 7% of the composite value.

Housing.com News Viewpoint

According to the Tamil Nadu Stamp Act 2019 and the Indian Stamp Duty Act 1899, it is mandatory for a property buyer to pay the stamp duty and registration charges when engaging in a property transaction. Through the SHCIL portal, the payment of stamp duty in Tamil Nadu has been simplified as buyers need not visit the Sub-registrar’s office for this purpose. Prospective buyers should be aware of the latest stamp duty and registration charges, which will make the process hassle-free and help one plan their finances for the property purchase.

Tamil Nadu Stamp Duty and Registration Department: Contact details

Email ID: [email protected]

Registered Office Address: 301, Center Point, Dr Babasaheb Ambedkar Road, Parel, Mumbai – 400012

e-Stamping Operations Office Address: SHCIL House, Plot Number: P-51 T.T.C Industrial Area, MIDC, Mahape, Navi Mumbai – 400710

See also: All about EC search Telangana

Is it mandatory to register property in Tamil Nadu?

Yes, as per the Registration Act, 1908, it is mandatory to register your property.

Where can I pay stamp duty in Chennai?

You can either pay the stamp duty at the registrar/sub-registrar’s office or avail of the e-stamping facility.

What are the documents required for registration of property?

You will need the stamp duty receipt, your PAN card, government ID proofs of all parties, including the witnesses, two passport-sized photographs, NOC, no dues certificate, sale deed, POA, pattadar passbook, etc.

Can I pay stamp duty by credit card in Tamil Nadu?

The Department of Registration in Tamil Nadu takes initiatives such as equipping registrar offices with facilities like PoS (Point of Sales) devices and enable citizens to pay their property registration charges using debit cards or credit cards.

What is the guideline value in Tamil Nadu?

The guideline value is the property’s value determined by the Government, below which the property cannot be registered. The aim of this rate is to prevent the evasion of stamp duty payments. The value depends on past transactions in a particular street or survey number, development of a locality, etc.

Is registration required once the entire loan amount is repaid on the property?

One is not required to register the property again after repaying the home loan. Since registration of the mortgaged property is done individually, once the amount is paid, the mortgage documents will become null.

For how long is Tamil Nadu Stamp Paper considered valid?

Stamp paper in Tamil Nadu or other states do not have any expiry date. According to Section 54, if stamp paper is not used for six months, one can deposit it back and get the refund by paying some penalty.

How to register will in Tamil Nadu?

A will refers to a legal document that entitles a person to specify the person (persons) to whom their property will be distributed after their death. A will can hand-written or types on a paper. It is not mandatory to register a will.

What is the difference between registered will and non registered will?

A will is valid even if it is not registered. However, legal experts advise registering a will as it cannot be challenged in a court.

What is the property registration charges in Thane 2023?

Stamp duty fees in Maharashtra is 5% of property’s market value for women and 6% for men. The registration charges are 1% of the property value.

What is the fee for Patta document in Tamil Nadu?

One can apply for a Patta online in Tamil Nadu through official portal https://eservices.tn.gov.in/eservicesnew/index.html. Patta can be obtained online by paying a nominal amount of Rs 100/-.

Can we register land in Tamil Nadu without Patta?

Patta, which is a revenue record of a plot of land, is needed for various land-related transactions. A developer must have this document when constructing a housing project. However, in case of apartments, no Patta is issued to the legal owner as they have a divided share of the land on which the property is built.

What is the MOD fee in Tamil Nadu?

The registration charges for Memorandum of Deposit of Title Deeds (MODT) is 1% on loan amount, subject to a maximum of Rs 6,000. The Stamp Duty applicable is 0.5% on loan amount, subject to a maximum of Rs 30,000.

Who should pay mod charges?

If one is opting for a home loan, the borrower must pay the MoD charges when the property is registered in their name or when they get the first instalment of their loan.

Is registration mandatory for home loan?

Generally, banks and financial institutions do not provide loans for unregistered properties. In the case of under-construction property, the home loan can be obtained without the property registration documents. However, the property should be registered after possession and a completion certificate must be obtained.

What are plot registration charges in Tamil Nadu?

Stamp duty of 7% of property market value and registration charges are 4% of property value are applicable for plot registration in Tamil Nadu.

What is the stamp duty for gift deed in Tamil Nadu?

The stamp duty on gift deed registration applicable in Tamil Nadu is 5% of the market value of the property. So, the property rate is Rs 50 lakh, the buyer must pay Rs 2,50,000 stamp duty on gift deed.

Is stamp duty payable on release deed?

In India, according to section 17 of the Registration Act 1908, a release deed is considered valid only when it is registered at the sub-registrar office. Stamp duty and registration charges are applicable on registering the release deed.

What is release deed in Tamil Nadu?

A release deed is a legal document executed for transferring a person's share in a jointly owned property to a co-owner. In Tamil Nadu, stamp duty and registration charges are applicable for a release deed. A stamp of 1% on market value is applicable (not exceeding Rs 40,000) for release among family members and 7% in case of non-family members. The registration charges are 1% on the market value subject to a maximum of Rs 10,000 in case of coparceners.

Will Patta change automatically after registration?.

In a move that aims to address the delay in transferring pattas for sub-divisions, the state government launched a software for the Directorate of Survey and Settlement, which automatically divides and transfers ‘Pattas’ in the names of those who buy plots in approved layouts. Patta will be issued in the name of individual owners soon after lands are purchased through registration. They need not apply for Patta transfer separately or visit the Tahsildar office.

Is gift deed valid without registration?

According to section 123 of the Transfer of Property Act, any gift involving an immovable property should be registered. The stamp duty and registration charges is also payable.

What are the land registration charges in Tamilnadu 2024?

The land registration charges in Tamilnadu are 4% of the property’s market value during sale or transfer.

How are land registration charges in Tamil Nadu calculated?

The land registration charges in Tamilnadu is determined by the state government by considering various factors, including the type of property document.

Is stamp duty refundable?

Stamp duty is not refundable.

Can stamp duty be claimed as an income tax deduction?

Yes. Stamp duty payment can be claimed as income tax deduction up to Rs 1.5 lakh, under Section 80C of the Income Tax Act, 1961.

Are stamp duty and registration charges included in home loan?

Stamp duty and registration charges are not covered by home loan.

Got any questions or point of view on our article? We would love to hear from you. Write to our Editor-in-Chief Jhumur Ghosh at [email protected]

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Harini is a content management professional with over 12 years of experience. She has contributed articles for various domains, including real estate, finance, health and travel insurance and e-governance. She has in-depth experience in writing well-researched articles on property trends, infrastructure, taxation, real estate projects and related topics. A Bachelor of Science with Honours in Physics, Harini prefers reading motivational books and keeping abreast of the latest developments in the real estate sector.

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