New flat or resale?

A new flat and a resale flat are not the same purchase wearing a different price tag. One comes from a builder who has never sold this exact unit before, with GST on top of the price and a construction timetable still to run. The other comes from a person who already owns it, with no GST, a building you can inspect exactly as it stands today, and a stack of paperwork a new flat simply does not generate – a chain of past owners, very possibly someone else’s home loan still sitting on the title, and an association that has been collecting maintenance for years before you showed up.

Some of what differs is cost, and law fixes most of it. Some of it is paperwork, and there the risk sits with you, not the builder’s legal team. This guide works both through on the same flat priced at ₹1 crore, once as a new flat bought under construction and once as a resale, then covers what a resale specifically asks you to check before you pay anything.

The cost, side by side

Stamp duty, cess, surcharge and registration are identical on this flat because ₹1 crore is well above ₹45 lakh, where a builder’s first-sale discount stops applying anyway – the two routes land on the same base rate. GST is the one charge the law removes entirely for a resale. Below ₹45 lakh the picture changes: the full-cost guide covers the first-sale slabs in full, and the next section shows why they never applied to a resale in the first place.

The Karnataka Stamp Act’s discounted rates for a flat – 2% up to ₹20 lakh, 3% from ₹20–45 lakh – sit in a clause that only reaches a conveyance “executed by a promoter, a land owner, or a developer ... pertaining to premises of ‘Flat’ ... or ‘Apartment’” (Schedule, Article 20(2) and (2A)). A resale is a conveyance by whoever currently owns the flat, not a promoter or developer, so it was never eligible for that clause at any price. It has always paid the ordinary Article 20(1) rate of five per cent, the same rate a first sale above ₹45 lakh pays anyway. On a cheaper flat the gap is real: a ₹30 lakh flat’s first sale pays 3% (₹90,000); the identical flat resold pays the full 5% (₹1,50,000) – ₹60,000 more, purely because of who is doing the selling, not what is being sold.

TDS, and the NRI exception

Section 393(1) of the Income-tax Act, 2025 makes the buyer deduct 1% TDS on any property bought for ₹50 lakh or more, and files it on Form 141. That rule does not care whether the flat is new or resale – on our ₹1 crore flat it is ₹1 lakh, deducted from what you pay the seller, either way. What changes the rule entirely is who the seller is.

Section 393(1)’s 1% rate, and its ₹50 lakh threshold, apply only where the sum is paid “to a resident” – that is the chapeau of the sub-section itself. Pay an NRI seller instead and you move to a different table in the same section. Section 393(2), “FOR PAYMENTS TO NON-RESIDENT,” Table serial number 17, charges TDS on “any interest ... or any other sum chargeable under the provisions of this Act, not being income chargeable under the head ‘Salaries’,” payable to “any non-resident (not being a company) or a foreign company,” at “rates in force” – not a flat 1%, and with no ₹50 lakh floor. In practice that means TDS on the whole sum chargeable to the seller, at the rates that apply to their gain, not a simple percentage of the price. A resale is exactly where this is likely to come up: individual sellers are far more often NRIs than a builder ever is.

Because the rate is not fixed, do not estimate it yourself. Either party can apply to the Assessing Officer for a certificate fixing a lower rate or the exact chargeable proportion before you pay (section 395(1)–(2)), and you will need a TAN, not just a PAN, to deduct and deposit tax for a non-resident seller. Get a chartered accountant involved before you agree a payment schedule if the seller is an NRI – deducting too little leaves you, the buyer, liable for the shortfall.

The title chain and the EC

A new flat’s title runs one way: from whoever owned the land, through however it reached the builder, to you. That chain is checked once, by the builder’s lawyers and by K-RERA at registration, and the documents guide covers what to check in it. A resale hands you that same chain plus every transfer since: the builder to the first owner, and then owner to owner to owner, down to the person selling to you now. Nobody has checked the later links for you, so your lawyer has to.

The usual practice is to have a lawyer trace the title back at least thirty years, not twelve. The Limitation Act, 1963 gives a straightforward reason for both numbers: a suit for possession of immovable property based on title has to be brought within twelve years of the possession turning adverse (Schedule, Article 65), while a mortgagor’s suit to redeem or recover mortgaged property – the longest ordinary time limit touching immovable property in the Act – runs for thirty years (Article 61). Thirty years covers both limits with room to spare. An encumbrance certificate is the main tool for that search, but Kaveri’s online EC records only go back to April 2004; anything before that needs a manual search at the sub-registrar’s office, which is worth budgeting time for on an older resale flat.

The mother deed

The mother deed is the earliest deed your lawyer can find in that chain – typically the one where the land first left government or family ownership and entered the market. Every later sale deed should refer back to it, directly or through the deed before it, without a break. A missing link, a survey number that does not match, or a mother deed your lawyer cannot locate at all is not something to take the seller’s word on; it is exactly what the title search exists to catch, and exactly when to bring in a lawyer rather than push ahead.

If the seller still has a loan

A flat bought on a home loan has its original title deeds sitting in the lender’s custody, deposited under a mortgage by deposit of title deeds when the loan was sanctioned. If your seller’s loan is not yet closed, those originals are still with their bank, and you cannot complete a clean registration without dealing with that first.

RBI sets out what the bank owes the seller once the loan is repaid in full: it “shall release all the original movable / immovable property documents and remove charges registered with any registry within a period of 30 days after full repayment / settlement of the loan account,” and if the delay is the bank’s fault, it must pay ₹5,000 for every day beyond that (Commercial Banks – Responsible Business Conduct Directions, 2025, paragraphs 354 and 358). In practice a sale usually closes one of two ways: the seller repays and closes the loan before your registration, and hands you the release letter and the original deeds; or your bank pays part of your loan directly to the seller’s lender to close it, with registration following once the release is confirmed. Either way, insist on seeing the closure statement and the bank’s release letter, and check that the encumbrance certificate actually shows the mortgage entry released, not merely that someone has told you it is closed. A mortgage with no matching release entry on the EC is a live claim on the flat.

Financing an older building

A resale loan is disbursed differently from a new-flat loan. HDFC Bank’s own FAQ says that “for second sale / resale properties the complete loan amount is disbursed at the time of execution of a sale deed,” with EMIs starting the month after, rather than the staged, part-by-part release a builder’s construction schedule gets. That is simpler, but it also means your bank’s valuation and paperwork checks all have to clear before registration, not spread across a two- or three-year build.

A lender can also weigh the building itself. Kotak Mahindra Bank’s own page on its home-loan rates says plainly that “the location, age, and condition of the property you are purchasing also influence the interest rate offered.” Not every lender publishes a rule this specific, and none of them publish a fixed cut-off age for a Bangalore flat, so ask your own lender directly, early, rather than assuming an older building will be financed on the same terms as a new one. SBI’s home-loan FAQ lists what it expects on a resale purchase: “Clear and marketable Title, Sale Deed, Encumbrance Certificate, latest tax receipts, Occupancy Certificate, Building Plan Approvals and Possession Certificate” – effectively the same paperwork this guide covers, checked by the bank as well as by you.

The deed of apartment

Where a building falls under the Karnataka Apartment Ownership Act, 1972, each apartment together with its undivided interest in the common areas “shall for all purposes constitute heritable and transferable immovable property,” and every apartment owner must execute “a Deed of Apartment in relation to his apartment in the manner prescribed” (sections 4 and 5(2)). That undivided-interest percentage is fixed by the Declaration, computed from the apartment’s value against the whole property, and the Act calls it permanent: it “shall not be altered without the consent of all of the apartment owners” (section 6(2)). On a resale, ask for the seller’s own registered Deed of Apartment, not just the sale deed – it is what fixes exactly what undivided share is changing hands along with the flat.

Where parking actually sits

Parking is not automatically part of what you are buying. The Act’s default definition of “common areas and facilities” expressly includes “the basements, cellars, yards, gardens, parking areas and storage spaces” (section 3(f)(3)) – owned in common by every apartment owner, not by any one of them – unless the Declaration carves a particular slot out as a “limited common area,” reserved for one apartment’s exclusive use (section 3(m)). Before you treat a parking slot as part of the sale, ask to see the clause in the Declaration or Deed of Apartment that allots that specific slot to that specific flat. A slot the seller has simply used for years, with no such clause, is common property the association controls, not the seller’s to hand you.

No-dues, arrears and the OC

The apartment owners’ association charges its common expenses to each apartment by its share of the undivided interest (Karnataka Apartment Ownership Act, 1972, section 10), and most associations will not update their records to your name, or issue the no-objection letter many societies require before a transfer, until any arrears on the flat are cleared. Ask the seller for a current no-dues certificate from the association and the latest maintenance statement before you register, and check it against what the association itself confirms – not just what the seller tells you.

Whether the building has an occupancy certificate matters more on a resale than almost anywhere else in this guide, because an older building is exactly where one can be missing. Occupying a building lawfully needs the OC, or thirty days’ silence from the authority after a completion notice (Greater Bengaluru Governance Act, 2024, section 241(5)); building services generally follow from that. The Supreme Court has since told utilities and lenders to hold the same line directly: “all the necessary service connections, such as, Electricity, water supply, sewerage connection, etc., shall be given ... to the buildings only after the production of the completion/occupation certificate,” and “banks / financial institutions shall sanction loan against any building as a security only after verifying the completion/occupation certificate” (Rajendra Kumar Barjatya v U.P. Avas Evam Vikas Parishad, 2024 INSC 990, paragraph 21). Ask for the OC directly. If the building does not have one, understand that a lender may decline to finance the purchase against it, and that you would meet the same question from your own buyer when you eventually sell.

The transaction, step by step

Before you make an offer

• Price the resale on its own numbers: no GST, but the same stamp duty and registration a first sale above ₹45 lakh pays.
• Check who the seller is before you fix the TDS rate – an NRI seller is a different, uncapped calculation, not 1%.
• Get a title search back at least thirty years, with a manual check at the sub-registrar’s office for anything before April 2004.
• If a loan is still open, insist on the closure letter and check the EC shows the mortgage actually released, not just repaid.
• Ask for the registered Deed of Apartment, and the specific clause that allots any parking slot you are counting on.
• Get the association’s no-dues certificate and the latest maintenance statement before you pay.
• Ask for the occupancy certificate directly; an older building without one can be hard to finance, and harder to resell later.