Procedure for Replacement of property in mortgage deed


We have a business loan from SBI. This is secured by a mortgage deed over 3 properties. We have decided to sell one of these properties. The bank is now insisting on adding one property in lieu of the property we are proposing to sell and hence releasing from mortgage deed. Hence I need to replace one property in the mortgage deed i.e. add one property and remove the one. Please advise on the stamp duty implication on this transaction. Kindly note that our company, SBI and all properties are based in Gujarat. The value of the property is around Rs. 1.5 cr and the value of the loan is Rs. 12 cr.

Answers (2)


114 votes

First my advice is to execute two separate deeds.
one is for cancellation of one property, here the stamp duty would be Rs. 100/-.
second deed would be for placing a new property as security and the stamp duty would be leviable as per schedule 45(b) of Gujarat Stamp Duty Act, here the stamp duty would be Rs. 5 for every Rs. 1000 and as the secured amount is Rs. 12 cr then the total stamp duty would Rs. 6 lacs.


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176 votes

Dear Sir,

You shall first have to enter into a release deedthe Bank shall issue an NOC to you for the property that you wish to sell. Thereafter, the new mortgage shall attract a separate stamp duty and charge shall be created by the bank over it.
If you are under the impression that you will get benefits because you will replace one property in the mortgage deed

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