Indian real estate is regulated on two levels: the Real Estate (Regulation and Development) Act, RERA 2016, at the national framework level, and taxes such as stamp duty and registration at the state level, so identical transactions carry different costs from one state to the next. Projects must be RERA-registered, and developers' marketing and payment practices are regulated accordingly.
Market structure in brief
- RERA changes the buyer's position: registered projects must disclose plans and timelines, quote on carpet area, and park a large share of buyer funds in a dedicated project account.
- Carpet area is the honest measure: RERA mandates quoting based on carpet area (usable area), distinct from the older super built-up conventions that inflated comparisons.
- Stamp duty and registration are state subjects: rates vary by state and affect total acquisition cost materially, always check the specific state's schedule.
- Home loans follow central bank bands: the Reserve Bank of India caps loan-to-value by loan size, broadly up to 90% for small loans, 80% in the middle band and 75% for larger ones, and these caps exclude stamp duty and registration charges.
- A two-document sale: an agreement to sell typically precedes the registered sale deed that actually transfers title, with possession often following registration.
Vocabulary a buyer will meet
RERA (the regulator under the 2016 Act), carpet area (usable floor area), sale deed (the registered transfer document), agreement to sell (the preceding contract), stamp duty (the state transfer tax) and encumbrance certificate (a record of liens on the property, checked during diligence).