Patna: The Bihar government has announced plans to halve registration fees on rental and lease agreements, a move expected to benefit more than one million tenants and encourage greater compliance with legal requirements.
The state’s Prohibition, Excise and Registration Department has prepared a proposal to reduce the registration component of rent agreement charges by 50%. A high-level committee has been formed to finalise a blueprint for the revised rates, which is expected to be presented soon.
Officials say the reform is aimed at reducing the financial burden on tenants and landlords, many of whom have avoided registering agreements because of high costs.
According to data from the Patna Municipal Corporation, the city has around 3,10,000 registered holding tax-paying houses, accommodating more than one million tenants. Despite the legal requirement for rental agreements to be registered, only about 5,000 agreements are formally executed each year.
Under the current system, tenants and landlords must pay a stamp duty of 0.5% of the total rental value and a registration fee of 2%. For example, on a total rental value of Rs 10 lakh, stamp duty amounts to Rs 5,000 and the registration fee to Rs 20,000, bringing the total cost for a 10-year agreement to approximately Rs 25,000.
Under the proposed changes, the stamp duty will remain at 0.5%, but the registration fee will be reduced to 1%. In the same example of a Rs 10 lakh rental value, the total cost would fall to around Rs 15,000 — a saving of Rs 10,000.
Legal experts have long stressed the importance of formal registration. Shekhar Neelam, a retired deputy inspector general of registration, said rent and lease agreements must be registered under the Registration Act to be legally enforceable. Even agreements for less than one year, he said, lack legal validity without proper registration.
Advocate Anil Kumar Udyogiya added that the Notary Act does not provide for rent or lease agreements, meaning notarised documents do not carry the same legal weight as registered ones. In the event of a dispute, only registered agreements are considered valid in court.
Officials believe that lowering fees, combined with greater awareness about legal requirements, could significantly increase the number of registered rental agreements in the state in the coming months.
