UP set for marked stamp duty cut on rent agreements

The state government has also begun developing an online platform that will enable tenants and landlords to execute and sign rent agreements digitally through Aadhaar verification eliminating the need to visit sub-registrar offices. The new system, to be integrated with the state’s property registration portal, will allow people to register rent deeds from their homes.

According to the proposal sent by the department of stamp and registration to the state cabinet for approval, the stamp duty on rent agreements will be reduced sharply across categories.

IG, stamps and registration, Neha Sharma said the proposal was ready after months of exercise, including invitation of comments/objections to the proposal. “The final proposal is expected to receive the cabinet’s approval very soon,” she said though she was not forthcoming on details.

Currently, rent agreements for a one-year term with an annual rent value up to ₹2 lakh attract a 4% stamp duty—2% as base duty and 2% as additional duty—amounting to around ₹8,000. “Once the new rules come into force, the amount will be a flat ₹500,” said a senior stamps and registration department official quoting the proposed provisions.

For agreements with annual rent between ₹2 lakh and ₹6 lakh, the duty will drop from about ₹24,000 to ₹1,500. For those between ₹6 lakh and ₹10 lakh, it will be reduced to ₹2,500.

“Also, the registration fee, which is currently 1% of the rental value, will also be rationalised. It will come down from ₹2,000 to ₹500 for rent up to ₹2 lakh, from ₹6,000 to ₹1,500 for rent between ₹2 lakh and ₹6 lakh, and from ₹10,000 to ₹2,500 for rent between ₹6 lakh and ₹10 lakh,” the official said.

The move comes as the state seeks to formalise its vast rental housing market, which largely operates outside the legal system. Most landlords and tenants in urban areas prefer 11-month agreements to avoid high stamp duty and the cumbersome registration process. Rent agreements for a period less than a year are not registrable. However, such short-term agreements are not legally binding under the Registration Act and often fail to hold up in courts in the event of disputes.

Official data show that in 2024–25, only around 36,000 rent agreements were registered for periods up to 10 years across the state that is believed to be just a fraction of the actual number of rental arrangements in cities. “With this reduction, we expect multiple rise in registrations,” said the official.

“Parallelly, the government is working on an Aadhaar-based software solution to facilitate online execution and registration of rent agreements. The feature, once operational, will enable both parties to sign digitally verified agreements without visiting government offices- a step expected to curb corruption and save time,” he said.

As per current regulations, rent agreements can be made for up to 30 years. For agreements up to 30 years, stamp duty is calculated on the annual rental value, while those beyond 30 years attract duty based on the land value- making such long-term agreements extremely costly and hence rare.

Officials said the upcoming reforms would initially apply only to agreements of up to 10 years. Future amendments could bring longer-duration contracts under similar rationalised duty structures.

The initiative, it is believed, will not only increase government revenue by expanding the base of registered agreements but also bring transparency to the urban rental market, benefiting both landlords and tenants.