Buying a home in 2007 is going to get more expensive than one bargained for, and one should be prepared to dig a little deeper into pockets, as home buyers will have to pay 25% more in stamp duty for their new real estate purchases.

Reliable sources working for the Department of Revenues confirm, there will be an increase in the market value of properties, as we usher in the New Year. The established rule is that a property’s market value is an estimate of its open market price on 1st January of a given assessment year.

Which means, say any land valued at Rs. 3160 per sq. ft. will in 2007 cost Rs. 4,740 per sq. ft. Thus, a 500 sq. ft. one BHK room in the area will in the New Year be valued at Rs. 23.27-lakh, instead of Rs. 18.70-lakh. Similarly, commercial structures are in for a rise in stamp duty, as well.

Purchasers will be required to pay a stamp duty of Rs. 7,600 for the first Rs. 5-lakh, plus 5% of the remainder of the deed amount or the market value, whichever is greater. While, commercial buyers will have to pay stamp duty at 5% of the market value.

Sunit Gupta, expert valuator of immovable property, says: “Rates in areas that have seen considerable development, such as the Bandra-Kurla Complex, Nariman Point, Worli, Bandra, Mulund, Ghatkopar, and Lalbaug, could even cross the 25% increase mark."

And, people purchasing flats will be asked to pay stamp duty that is calculated on the agreement or the flat’s market value, whichever is higher. Advocate Vinod Sampat, a property tax consultant and President of the Registration Fee and Stamp Duty Association attributes the raise in stamp duty to property prices increases in 2006, saying: “Flat purchasers wanting to avoid the additional monetary burden must execute property documents by the yearend."