Modification In Levy Of Registration Fees On Property Transactions In Karnataka

The Government of Karnataka has recently issued a notification under the Registration Act, 1908, effecting a major change in the cost of property transactions across the state. With effect from 31 August 2025, the registration fee on property documents has been doubled from 1% to 2% of the property value, while the existing stamp duty of 5% remains unchanged. Additional charges such as cess and surcharges, also continue as before.

The following are the amendments to the Table of Registration Fees that Karnataka had earlier notified under the powers given by Section 78 of the Registration Act, 1908:

1. Article 1(4) (a): Registration fee increased from Rs. 10 per Rs. 1,000 or part thereof to Rs. 20 per Rs. 1,000 or part thereof.
2. Article III(a) (i): The fee earlier prescribed as Rs. 1 is now substituted with Rs. 2.
3. Article III(a) (ii): The fee earlier prescribed as Rs. 1 is now substituted with Rs. 2.

Implications

This revision has significant implications for both homebuyers and the real estate market at large. According to the notification dated 29 August 2025, all immovable property registrations executed from 31 August onwards will attract the revised registration fee. For a property valued at Rs. 1 crore, this translates into an additional outlay of Rs. 1 lakh purely towards registration charges raising the overall transaction cost.

The state government expects this change to augment revenue collections, especially as property registrations in Bengaluru and other urban centres remain buoyant. However, market experts caution that the higher upfront cost may temporarily dampen demand, particularly in the affordable housing segment.

Property consultants believe that doubling the fee could discourage first-time buyers and those seeking mid-range homes, who are more sensitive to transaction costs. Developers fear that the increased burden may slow down sales momentum at a time when the sector has been witnessing renewed demand.

Analysis

For prospective buyers, the key takeaway is the need to reassess budgets and plan for the increased registration cost when entering into sale agreements from September onwards. Investors and high-value property purchasers may absorb the hike more easily, but the financial impact will be sharper for middle income households. From a policy perspective, this decision highlights the government’s effort to enhance non-tax revenue sources while maintaining stamp duty at current levels. Whether this translates into a sustained revenue boost or leads to a short-term slowdown in registrations remains to be seen.

Conclusion

With the new rates already in effect, buyers, sellers, and developers must adapt quickly. Staying informed about regulatory changes such as this is essential for making well-planned real estate decisions in Karnataka’s evolving property market.