Transfer of an Under-Construction Flat: Buying from the Original Allottee in Noida and Gurugram

Buying an under-construction flat from its first allottee, rather than from the builder, is common across Noida, Greater Noida West, Gurugram and the Dwarka Expressway. Sellers do it to exit before possession, and buyers do it to get a unit in a sold-out tower or to pay less than the builder’s current price. But a flat that is still being built has no sale deed yet. What changes hands is the allotment, the agreement for sale and the payment history. That makes the transfer a three-way process involving the seller, the buyer and the builder, often with one or two banks as well. This guide explains how the transfer works, what RERA says about the new buyer’s rights, the charges and taxes involved, and the checks that protect you.

What is actually being transferred

Before possession and registration of a conveyance or sub-lease deed, the seller owns contractual rights: the right to the flat on completion under the agreement for sale, and credit for the money already paid. A transfer, sometimes called an endorsement, nomination or assignment, moves those rights to you. The builder records the change in its books and issues the allotment, or a fresh agreement, in your name.

The RERA Act is helpful here. Its definition of “allottee” in Section 2(d) includes the person who later acquires the allotment through sale, transfer or otherwise. UP RERA’s FAQ on the Act confirms that the term covers secondary sales. The UP model agreement also says that all its provisions and obligations apply to, and can be enforced by and against, any subsequent allottee, because they go with the unit. In plain terms, once the builder endorses the transfer, you step into the seller’s shoes for possession, specifications, delay interest and defect liability.

The step-by-step process

• Step 1: Verify the project and unit. Look up the project on UP RERA or HRERA: registration validity, the declared completion date, any extension, quarterly progress, and complaints. Confirm the tower and unit exist in the sanctioned plan.
• Step 2: Collect the seller’s papers. You need the application form, allotment letter, registered agreement for sale, the builder’s latest statement of account, all payment receipts, GST invoices, TDS certificates for past instalments and any demand letters.
• Step 3: Ask the builder for a no-dues and transfer-terms letter. This should state the amount paid, the amount outstanding, the transfer charge and the documents needed. Some builders do not allow transfers until a minimum percentage is paid or until a lock-in passes; the letter should say so.
• Step 4: Deal with the seller’s home loan. If the seller borrowed, the bank holds the original agreement and usually has a tripartite agreement with the builder. Either the seller closes the loan, or your bank pays the seller’s bank directly and takes over. Get the bank’s NOC and the release of the lien.
• Step 5: Sign an agreement between seller and buyer. It should record the premium you pay the seller, the amount you will reimburse for instalments already paid, who pays the transfer charge, and what happens if the builder refuses the transfer.
• Step 6: Apply to the builder for transfer. Both parties usually sign the builder’s transfer forms, affidavits and indemnities, and pay the transfer fee.
• Step 7: Register or stamp what your state requires. Where the original agreement for sale was registered, the transfer typically needs a fresh registered agreement or a registered deed of assignment, with stamp duty. Confirm the requirement with the sub-registrar or a lawyer before you pay the seller.
• Step 8: Take the endorsed papers. Collect the endorsed allotment or new agreement in your name, an updated statement of account and the builder’s acknowledgement that future demands will be raised on you.

Money: who pays what

UP RERA’s cap on builder transfer charges

In a May 2026 interview, UP RERA chairman Sanjay Bhoosreddy said the authority had capped the transfer charges developers may levy. He said builders had been charging anything from 2 percent of the property value to Rs 800 per sq ft, which could add Rs 10 lakh to Rs 25 lakh for a buyer. Under the new limits he described, transfers within the family in inheritance cases are capped at Rs 1,000, and transfers outside the family at Rs 25,000. Ask your builder to apply the cap, and get a copy of the UP RERA order or regulation itself before you pay a higher demand. This cap concerns the developer’s charge; any development authority charge on leasehold land is separate.

Noida and Greater Noida leasehold charges

Land in Noida and Greater Noida is held on lease from the authorities, so a change in the person holding rights in a flat can attract an authority transfer charge. For completed flats, the resale is recorded through a transfer memorandum (TM). An Outlook Money explainer from August 2025 describes Noida TM charges as a percentage of the original allotment price that falls with the age of the allotment, from 50 percent for allotments before 1990 down to 2.5 percent for allotments after 24 September 2021, with relief for immediate family and double charges for GPA transfers. An older report says the Noida Authority’s board cut transfer charges for residential properties from 5 percent to 2.5 percent in September 2020. These two sources do not agree on the dates, so confirm the current schedule with the authority before you sign.

For a flat still under construction and not yet sub-leased, ask the builder in writing whether any authority charge will be passed on to you at the time of transfer or at the sub-lease stage.

Tax points for buyer and seller

• TDS. Where the consideration or stamp duty value is Rs 50 lakh or more, the buyer deducts 1 percent TDS on payments to the seller. From 1 April 2026, under the Income-tax Rules, 2026, the challan-cum-statement is Form 141 (replacing Form 26QB) and the certificate is Form 132 (replacing Form 16B). Form 141 asks for buyer-wise and seller-wise shares, the stamp duty value and the instalment sequence, so keep the paperwork in order. You continue to deduct TDS on instalments you pay the builder.
• Seller’s capital gains. The seller’s gain is the price received minus the amounts paid. Whether it is short-term or long-term depends on the holding period, which is often measured from the allotment date. The seller should take tax advice.
• GST. GST continues on instalments you pay the builder at the rate that applies to the project. Get GST invoices in your name for those instalments.

Checks that protect the buyer

• Get the builder’s written transfer consent before you pay the seller more than a token amount, and make the token refundable if the builder refuses.
• Reconcile every receipt with the builder’s statement of account. Unpaid interest or penalties may follow the unit.
• Check that no other bank or person has a charge on the unit. Search CERSAI and ask for the seller’s loan statement.
• Make sure the seller has no complaint pending against the builder about this unit, or agree in writing who gets any award.
• Check the project’s RERA status: a lapsed registration or a long string of extensions is a warning.
• If the seller is an NRI, different TDS rules apply; take advice before paying.

Common disputes

• Builder refuses or delays the transfer, sometimes to push its own inventory. RERA’s definition of allottee supports the subsequent buyer once the transfer is done, but whether a builder can refuse depends on the agreement’s terms. Raise it with RERA if the refusal is unreasonable.
• Delay interest. Builders sometimes argue that a subsequent buyer who bought knowing of the delay should get less. Keep the original dates on record and ask a lawyer about how RERA authorities treat such claims.
• Double-selling of the same unit by a seller or broker. Only the builder’s endorsement and its records protect you.

As of October 2026

This guide uses the RERA Act, UP’s model agreement and FAQ, reports on Noida transfer charges and the 2026 TDS forms. Charges and practice vary by builder and state. It is general information, not legal or tax advice.

Frequently asked questions

Sources

• Real Estate (Regulation and Development) Act, 2016 (UP RERA copy)
• UP RERA: Frequently asked questions on the RERA Act
• UP RERA model agreement for sale, 2018
• Realtynmore: UP RERA limits transfer charges, over Rs 1,600 crore recovered for homebuyers (May 2026)
• Outlook Money: Transfer memorandum, the hidden tax on resale flats in Noida (Aug 2025)
• Avi Arora: Noida Authority reduces transfer charges on residential and group housing
• Sobha: GNIDA lease deed and transfer memorandum in Greater Noida
• TaxGuru: TDS on property transfers from 1 April 2026, Forms 141 and 132
• ADiHomes: TDS on property purchase and how to pay 1 percent
• CERSAI: Central Registry home page

Updated 25 October 2026. This article is general information, not legal or financial advice; check current rules and project details before you decide.