Closing Costs for NRI Property Buyers in Tamil Nadu: Know What You Are Buying First

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Last updated: Oct 8, 2026

If you are buying property in Chennai from abroad, you have probably already heard three different numbers for what it will cost on top of the price. One agent says 9%. A website says 11%. A friend says “just add GST”. It is a fair thing to worry about. You are sending serious money from a distance, and the last place you want to discover you are short is the Sub-Registrar’s office.

Closing costs are not random, though. Two decisions settle most of the amount, and you can make both before you sign anything: what you are buying, and how you are buying it. This guide takes them in that order, so you can work out your own number instead of relying on someone else’s. If you are buying from abroad, our NRI property services cover the local side of the purchase.

Rates in this guide were checked in October 2026. Government rules change, so use the figures to plan, and confirm the current rate with the Sub-Registrar Office or the Registration Department’s “Duty and Fees” page before you pay.

Step 1: What Are You Buying?

This is the first decision because it sets the largest part of your cost. Find your case below.

A plot or piece of land

The sale deed attracts 7% stamp duty and a 2% registration fee on the market value. For registration the market value is generally the higher of the price in your deed and the government’s guideline value for that street or survey number, so a low price on paper does not reduce the duty. There is no GST on the sale of land, and that includes a developed plot in a layout with roads, drains and power lines laid. If the developer bills a separate charge for development work, ask whether GST is added to that charge.

A new flat, villa or row house from a builder (first sale)

Since December 2023, Tamil Nadu uses a single sale deed on a “composite value” for the first sale of a flat or villa from a builder, in place of the older arrangement of a land-share deed plus a separate construction agreement for most first sales. Stamp duty on this deed follows slabs, as reported when the change was introduced: 4% up to ₹50 lakh, 5% from ₹50 lakh to ₹3 crore, and 7% above ₹3 crore, with the standard 2% registration fee on the composite value. These slabs are not shown on the Registration Department’s Duty and Fees table, so confirm the slab for your flat with the Sub-Registrar Office before you budget.

Whether you pay GST depends mainly on one document: the completion certificate, issued by the planning authority when the building is finished. The legal test is the completion certificate or the building’s first occupation, whichever comes earlier. In practice the certificate usually comes first, but if the building was already occupied before it was issued, that earlier date counts.

• Flat still under construction, or no completion certificate yet: GST applies, generally at 5%, or 1% for eligible affordable housing (these rates apply without input tax credit for the builder).
• Completion certificate already issued (or the building already occupied) when you pay: no GST, even though you are the first buyer from the builder. Stamp duty still follows the composite-value slabs.

The timing of your payments matters, not just the date of the sale deed. If you paid a booking amount or instalments before the completion certificate or first occupation, GST generally applies to those payments. So ask the builder for a copy of the completion certificate and its date before you pay anything, and check how GST is shown in the payment schedule. The lower stamp duty slabs can be cancelled out by GST, so compare the total, not one line.

A resale flat or house

A resale is a standard sale deed: 7% stamp duty plus 2% registration fee on market value. The new-flat slabs are meant for first sales from a builder and are not meant for resale, even though some commercial websites present them that way. GST does not apply to a resale, or to a ready flat that already has a completion certificate.

Here is the same information in one place. Rates as checked in October 2026.

A note on what NRIs can buy

NRIs and OCI cardholders can generally buy residential and commercial property in India, but not agricultural land, a farmhouse or plantation property without special permission from the Reserve Bank of India. If your plot is classified as agricultural in the revenue records, check this before you pay an advance. The money also has to come the right way: by inward remittance through normal banking channels, or from your NRE, FCNR or NRO account.

Step 2: How Are You Buying?

The second decision adds smaller items on top of the first. None of them is large on its own, but they are the ones people forget to budget for.

Paying in full, or with a bank loan

If a bank finances part of the purchase, it will usually take a mortgage over the property by a Memorandum of Deposit of Title Deeds (MODT), which is registered. The Registration Department lists the duty on it as 0.5% of the loan amount (maximum ₹40,000) as stamp duty, and 1% of the loan amount (maximum ₹8,000) as registration fee. Because of those caps, the most this document can cost in government charges is ₹48,000, however large the loan. Which mortgage document your bank uses is the bank’s choice, so ask yours early.

Separately from government duty, lenders charge their own fees, commonly a processing fee, and may ask for a valuation and a legal opinion. These vary by bank and change often, so get the current fee schedule from your lender in writing.

Signing in person, or through a Power of Attorney

Many NRI buyers cannot be in Chennai for registration and appoint someone to sign for them. What it costs depends less on who holds the power and more on what the document allows them to do.

As a buyer, you normally need only the first kind. The official table has no separate row for a power to buy, so it normally falls under “other purposes”; confirm this with the Sub-Registrar Office when the draft is ready. The table also does not define “family member”, so check that too before relying on the lower rate. The higher rates in the table apply when the power includes selling, so ask your advocate to word it for purchase and registration only, unless you genuinely need more. A Power of Attorney signed abroad has to be in the right form before a Sub-Registrar will accept it:

• Sign it before the right person. If you live outside India, it must be executed before and authenticated by a notary public, a court, a judge, a magistrate, or an Indian Consul or Vice-Consul.
• Apostille, or consular attestation. If your country is in the Hague Apostille Convention, such as the US, the UK, Canada, Australia or Singapore, India accepts an apostilled document without further legalisation. The UAE is not a member, so if you live in Dubai, sign it before the Indian Consulate or Embassy.
• Have it stamped in Tamil Nadu. A document signed abroad should be sent to India in the original and stamped in Tamil Nadu within the applicable time limit. Allow time for the courier and the stamping before the sale deed is signed.

An agreement to sell before the sale deed

Many purchases begin with an agreement to sell and an advance. The Registration Department lists ₹200 stamp duty on an agreement to sell, and a registration fee of 1% of the advance. If you are given possession under the agreement, the fee is 1% of the whole price instead. In Tamil Nadu an agreement to sell has to be registered, so this is a cost to plan for, not an optional extra. It is paid on top of, not instead of, the sale deed charges.

Buying from a resident seller, or from an NRI seller

If the seller is a resident of India and the property is worth ₹50 lakh or more, you deduct 1% as TDS and deposit it with the tax department using Form 141. The ₹50 lakh is measured on the higher of the price and the stamp duty value, and you do not need a separate TAN for this. Agricultural land is outside this rule.

If the seller is an NRI, a different and larger deduction applies, with no ₹50 lakh threshold. It is a topic of its own, and it needs to be settled with a chartered accountant before the sale agreement is signed, not at registration. As a buyer who lives abroad, you will generally also need a TAN (tax deduction account number) for it: the relief from 1 October 2026 that lets a buyer use a PAN and Form 141 instead applies only to resident individuals and HUFs. Our guide to TDS when an NRI sells property in India explains how it works.

Ramesh’s Purchase, Worked Through

Consider a buyer, we will call him Ramesh, who works in Singapore and has agreed to buy a resale flat in Chennai for ₹80 lakh. He is taking a ₹40 lakh bank loan, and his brother in Chennai will sign for him under a Power of Attorney to buy and register. To keep the example simple, we assume the guideline value is the same as the price. His government charges add up like this.

That total is about 9.4% of the price, and it is paid in a sensible order, which is what makes it manageable:

1. Agreement to sell. ₹200 stamp duty and a registration fee of 1% of the advance. The advance goes to the seller.
2. Loan sanction. The bank’s own fees come now, separate from government duty.
3. Sale deed registration. The big item: stamp duty and registration fee on the sale deed.
4. Loan document registration. The smaller MODT charge, usually at the same time.

This total does not include the bank’s processing and valuation fees, an advocate’s fees, remittance charges or exchange-rate differences. Ramesh budgeted those separately. Had the same ₹80 lakh been paid for an under-construction flat from a builder, and assuming the composite value matched the price, stamp duty would have been 5% (₹4,00,000) plus ₹1,60,000 registration, but GST of 5% (about ₹4,00,000) would have been added on top. That is roughly ₹9.6 lakh against ₹7.2 lakh on the resale deed. This is why knowing what you are buying comes first.

Costs That Are Not Government Duty

It helps to keep two kinds of cost apart in your head. Government charges are fixed by rule and are not negotiable. Everything else is a service fee set by a lender or professional, and it can often be discussed:

• Bank processing fee, valuation fee and legal opinion charge
• Advocate or document-review fees
• Bank charges and exchange-rate difference on remitting money from abroad
• Any fee for someone to coordinate the purchase locally

Rules That Changed Recently

• The Registration Department’s current table shows a 2% registration fee on a sale deed, not 4%. A figure of 11% in total is out of date. The page was last updated on 22 January 2026.
• The Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026 and renumbered many sections, including the ones for TDS on property purchases. An article that still says “Section 195” or “Section 194-IA” describes the old law.

Mistakes We See NRI Buyers Make

• Budgeting 11% for government charges when the current figure for a sale deed is 9%.
• Not checking whether a new flat has its completion certificate, and when it was issued. Payments made before it, or before the building was first occupied, generally attract GST; payments made after it generally do not.
• Forgetting the loan document charge, or assuming the bank covers it.
• Signing a broad Power of Attorney that also allows selling, when a purchase-only one is cheaper and safer.
• Assuming the 1% TDS for resident sellers applies when the seller is an NRI.

Frequently Asked Questions

Who pays the stamp duty and registration fee, the buyer or the seller?

In a typical Tamil Nadu resale the buyer pays them, unless the sale agreement says otherwise. Put who pays what in writing in the agreement to sell.

Will my bank accept the free Encumbrance Certificate I downloaded?

Usually not. Banks generally want the digitally signed Encumbrance Certificate applied for through the TNREGINET login, and the fee depends on the document. Some banks do not accept one more than about two weeks old, so apply when the bank asks and ask how recent it must be.

Is there GST on a new flat that already has its completion certificate?

Generally no. If the completion certificate was issued, or the building first occupied, before you pay, GST does not apply, even on a first sale from the builder. Payments made before that date generally attract GST.

Can I pay in cash?

NRIs are generally expected to pay through their NRE or NRO account or through inward remittance. Foreign currency notes and cash are not the route the rules provide for.

Do I have to be present at registration?

Not necessarily. You can authorise someone in India through a Power of Attorney. One signed abroad should be properly executed and authenticated there, sent to India in the original, and then stamped (adjudicated) in Tamil Nadu within the applicable time limit. A Power of Attorney executed outside India is generally not required to be separately registered in Tamil Nadu before it is used for the property transaction.

Can the stamp duty be reduced by showing a lower price?

Not reliably. Duty is generally worked out on the higher of the deed price and the government’s guideline value, so a lower price on paper does not necessarily reduce it.

Sources & Official References

• Registration Department, Government of Tamil Nadu, TNREGINET “Duty and Fees” page (stamp duty and registration fee table, including sale deed, agreement to sell, Memorandum of Deposit of Title Deeds and Power of Attorney), page last updated 22 January 2026.
• Government of Tamil Nadu, Commercial Taxes and Registration Department, G.O. (Ms) No. 131 dated 1 December 2023, as reported in the press when it was introduced (composite value and stamp duty slabs for first sale of flats); these slabs are not on the Duty and Fees table above.
• CBIC, GST rate structure for under-construction residential property (5% standard, 1% affordable housing, no input tax credit), and CGST Act, 2017, Schedule II, paragraph 5(b) (no GST where the entire consideration is received after the completion certificate is issued or after first occupation, whichever is earlier).
• CBIC Circular No. 177/09/2022-TRU dated 3 August 2022 (sale of land, including developed plots, is not a supply under GST; Schedule III, entry 5 of the CGST Act, 2017).
• Income-tax Act, 2025, Section 393(1), Table S. No. 3(i) (TDS of 1% on purchase of immovable property from a resident seller) and Form 141.
• Ministry of External Affairs, “Acquisition and Transfer of Immovable Property in India” (FEMA rules for NRIs, including the restriction on agricultural land, plantation property and farmhouses, and permitted payment routes).
• Registration Act, 1908, Section 33(1)(c) (Power of Attorney executed by a principal who does not reside in India).
• Indian Stamp Act, 1899, Section 18 (instruments executed outside India).
• Ministry of External Affairs, “Attestation / Apostille” (acceptance of apostilled documents in India), and the HCCH status table of the 1961 Apostille Convention.