Stamp duty on lease agreements increased in Kerala

Thiruvananthapuram: The state has raised the stamp duty on land lease agreements, with the new rates taking effect on April 1 and based on the fair value of the land. Previously, stamp duty was assessed on the lease amount itself. Many fear that leasing agricultural land for an extended period will become unprofitable due to the high stamp duty.

The lease amount was determined by the parties involved in the deal resulting in lower stamp duty payments. However, the recent government decision mandates stamp duty payment based on the fair value of the land.

Under the new system, a stamp duty of eight percent is applicable on each slab, calculated at a fixed percentage of the fair value throughout the lease period. In the case of leasing a building, the stamp duty is determined by the higher value between the fair value of the land and the total rent. 

Recent lease registrations are subject to the revised stamp duty rate, while registration fees remain at the old rate. However, several registrar offices have yet to implement the updated rates due to confusion and lack of clear instructions from the Registration Department.

The stamp duty was increased from Rs 200 to Rs 500 for lease agreements of up to one year. Most of the transactions in the agriculture sector are less than one year old. It was not mandatory to register them. The registration department has now asked local self-government bodies to ensure registration in this category as well.