Whether you are looking for your dream home or if you are planning to invest in real estate, there is a lot of research that goes into the entire process. The financial aspect of buying property is an important part of the process, but what many people don’t know is that the financial aspect also has numerous parts to it. There are several small and big payments involved in real estate transactions that can significantly increase the price of a property. Apart from the processing fee, registration charges, technical appraisal fee, stamp duty, etc., you should also be aware of what franking on stamp paper is and the charges involved.
What Is Franking?
Franking refers to the process of getting property documents stamped, and it also refers to the seal on the papers, which indicates that the stamp duty has been paid. The franking charge is an extra fee related to stamp duty, incurred at the same time as the stamp duty. A franking machine is used to imprint a stamp on relevant documents, signifying the payment of the stamp duty and franking charges, which means that the documents, like home loan papers, agreements, or sales deeds, are now legalised. The franking of documents is managed only by commissioned banks and government agencies, who have the right to charge up to 0.1% of the transaction value as franking charges.
The Importance of Franking Documents
Franking confirms and legally validates that the stamp duty has been paid. It adds legal weight to any real estate transaction, is accepted by banks and government agencies, helps prevent frauds, and is required for home loan approval as well as property registration.
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Legal Validity: Having paid the franking charges means that the property has been legally registered in the books and that the franked document will act as proof of ownership.
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Transparency: Franking property documents helps ensure transparency in all real estate transactions and offers a legal record of the purchase. This may to prove to be helpful in cases that involve legal dispute or fraud.
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Reduced Stamp Duty: Instead of having to buy stamp paper for each page of the document, franking only requires a single postage payment. In many cases, the franking charges are also deducted from the stamp duty costs.
Franking charges form an essential part of purchasing property and are important for ensuring smooth and transparent real estate transactions.