What is property registration? Introduction
Whenever a property buyer buys a piece of land/immovable property, he/she needs to register the same with the authority concerned. Once the registration agreement is submitted at the local registrar’s office and the registration is complete, the buyer legally becomes the owner of the apartment. The law does not recognize unregistered owners and does not give them any rights over the property. Steps to Take While Registering a Property Verify the property title
The property documentation will change depending on whether the property is being transferred from the developer or seller. The process of due diligence gets easier in case of a secondary sale as the first owner of the property would have all the documents in place for the registration of the property. If the title were not clear and marketable, most financial institutions would refuse to finance the property. Find Sub Registrar Office
One has to present the Sale Deed in the concerned Sub-Registrar Office where the land is situated. Your lawyer or attorney will help you to find your property location and the concerned registrar office. Sale Deed and Stamp Duty
The Schedule of the property should be correctly mentioned in the Sale Deed and if any structure is situated over the landed property that has to be mentioned in the Sale Deed along with its cost. Preparation of property Sale Deed is done by an authorized attorney on behalf of the purchaser. The stamp duty is usually a percentage of the transaction value levied by the state government, on every registered sale. The levy of stamp duty is a State subject and thus the rates of stamp duty vary from State to State. Take an appointment
The registration fee should be paid a few days before going for registration and the receipt is to be shown at the Sub-Registrar’s Office one day before the actual date of registration. An appointment has to be taken over the phone and registration has to be done at the office of the Sub-Registrar. Submission of Documents
After detailed verification of the Sale Deed, the registration process will be completed as per the Registration Act. Once the registration is complete, the duly registered document may be collected by signing the dispatch register or by giving a letter of authority to someone to collect it on your behalf. The final sale deed should be stamped and registered at the appropriate Sub-Registrar’s Office. The Sub-registrar keeps a copy of the documents and returns the original documents to the buyer within 30 minutes.
Mutation of the title
Once the registration is complete, the purchaser has to apply to the local municipal authority to get the title of the property concerned transferred to his/her name. This is commonly referred to as mutation of the title of the property.
Which documents must be compulsory registered?
Adjudication is the process of ascertaining the market value and valuing the property to ascertain the stamp duty that is applicable on the property. If the document is signed, adjudication must be done within one month, else two per cent interest per month will be charged. Adjudication is valid up to six months or till December 31st of a particular year, whichever is earlier.
Registration Fees Challan
The Sub-registrar will determine the registration fees payable and issue the challan through which it confirms to accept the pay slip. Pay the registration fees by challan/pay slip from any nationalized bank as per the procedure laid down by the respective Sub-registrar.
No Objection Certificate
No Objection Certificate under the Urban Land Ceiling Act is required if the area of land transferred exceeds 500 sq.m. (Mumbai city) and if the land belongs to a government, semi- government body or a charitable trust, NOC of such government or charitable trust is required.
Property Card of the land on which the property is being registered or is situated.
Original document and its copy
The document must be printed or typed on one side only and in black ink. A photocopy should be taken on only one side of the paper and there should be butter paper between the two sheets of the photocopy.
Proof of old construction
It is better to get the document adjudicated in case the building is very old and proper depreciation is not given by the Sub-registrar. If property sold or purchased is in the old building and the benefit of depreciation is claimed on the market value, then any one of the following documents is to be produced as a proof of old construction:
Municipal assessment bill of the building
Building Completion Certificate
Original registered agreement between the builder and buyer or of any other flat in that building.
Proof of identity
You need to produce ID proof with photo. The ID proof can be any of the following: Copy of driving license, Passport, PAN card, Driving License, Employee ID, Voter ID or Proof of your address with some supporting document.
When and where should the documents be registered?
Whenever a property buyer buys a piece of land/immovable property, he /she needs to register the same with the authority concerned. The registration can take place at the Sub-Registration Office within which the property is located or in the District Sub-Registrar Office of the District where the property is located.
What are the fees involved while registering different types of properties?
Generally, Stamp Duty is to be paid on or before the date of registration of the Agreement. The rate of Stamp Duty varies from state to state however a delay in payment of Stamp Duty would attract penalty @ 2% per month subject to maximum of 200% of the proper stamp duty amount.
Registration is the process of recording the contents of a document with a Registering Officer. The documents are registered for the purpose of conservation of evidence, assurance of title, publicity of documents and prevention of fraud. The Registration fee varies for state to state across the country.
Some states also levy VAT on under-construction property. The VAT rate is generally 1% of the Agreement Value. There has been lot of criticism and controversies regarding the decision of the state governments to levy VAT on under construction property stating that construction of property cannot be considered as goods.
Service tax is another tax levied by the Central Government on under construction property. The current rate of service tax is 15%. Swachh Bharat CESS is levied at @ 0.50% and Krishi Kalyan CESS @ 0.50% is calculated on top of the service tax rate which takes the effective service tax rate to 15%.
What is stamp duty? How to arrive at the correct value?
Stamp duty is payable under Section 3 of the Indian Stamp Act, 1899. Stamp Duty must be paid in full and on time. It is a legal tax and acts as an evidence for any sale or purchase of a property. The levy of stamp duty is a state subject and thus the rates and amounts of stamp duty also vary from state to state.
Who is liable to pay the stamp duty, the purchaser or the developer?
In the absence of any agreement to the contrary, the purchaser/transferee has to pay stamp duty. However in case of exchange of properties, both parties have to bear stamp duty equally.
What is a Power Of Attorney?
A power of attorney is an instrument that is used by people to confer authority on somebody else to legally act on their behalf. They can be of two types — special power of attorney (SPA) and general power of attorney (GPA). While an SPA is used for transfer of only a specific right to the person on whom it is conferred, the GPA authorizes the holder to do whatever is necessary.
Can I authorize someone else to register my property by granting him Power of Attorney?
Property sales through the common practice of general power of attorney (GPA) will not give ownership title to the buyer.
This sums up the process and details of purchasing a property and registering it to become the rightful owner of a home legally recognised by law.
What are problems that you could face after buying a property?
Registering your home and claiming ownership of the house is a big step towards buying a home. However that is just one step which gets you closer to owning your own house. No matter whether you plan to reside in it, or use it as an investment, there are quite a few things which can go wrong after you purchase a property. Here are some of the issues people face after buying property.
Types of Problems
The most common problem facing property buyers today is project delays that can stretch to several years. While most builders have a penalty clause for delays, it is only a fraction of the EMI you pay for your home loan—about Rs. 5 per sq.ft per month. Then there are issues like building plans being changed midway through the construction, or common facilities falling short of expectations.
If a builder uses sub-standard material in construction of a building or makes false misleading representations about the condition of the house then it is denial of the facility or benefit of which a consumer is entitled to claim value. You also have an option to file a civil suit against the builder claiming damages for breach of obligations. The consumer forums then order the builders to remove the defects and also pay compensation to you, the allottee. Construction on illegally acquired land
In cases where the construction has been made on illegally acquired land you can either claim the refund of the amount invested by him in the property or he can ask for an alternate accommodation by the same builder.
If you are overburdened by the excessive hidden charges or enhanced external development charges than what were mentioned in the in the allottee-builder agreement, you can file a civil suit in a civil court.
What is your recourse in case of a delayed project?
Earlier buyers used have little say in booking agreements. The penalties for delay in payments by buyers are mentioned explicitly but obligations of timely delivery by builders are played down. Such lopsided agreements were common a few years ago. But with the passage of the Real Estate Bill in March 2016, the customers will be safeguarded from the whim of the builders-
Timely completion of the projects will be ensured with the government making it mandatory for the builders to deposit 70% of the amount taken from the borrowers for the completion of the project in a third party account.
To help buyers make an informed decision, the builders will have to disclose all information regarding the projects completed in the past 5 years, layout, approval etc.
If the property is not handed over on time, then it is the liability of the builder to pay the interest rate to the customer as is being paid by the buyer to the bank.
The customers cannot be conned by selling the property as per super area. It has to be sold on the basis of carpet area.
Ad-hoc changes cannot be made to the building plan without the consent of 66% of the buyers
If there are in any discrepancies in the property or structural deficiencies, then the buyers can contact the builder within one year of possession and the builder will be held responsible.
The necessary obligations of the builders will be regulated by State level authorities called Real Estate Regulatory Authorities (RERAs)
Who should you approach for legal action?
Those who seek redressal for their claims and wish to be compensated properly can approach the builders. If they refuse to consider the request, you can approach various institutions for legal action against the builder, such as: Civil Court
The Supreme Court has held that a consumer has the right to approach the Civil Court or the Forum under the Consumer Protection Act for relief in a situation where the builder commits breach of his obligations. There are laws such as the Development Control Rules under which the case can be filed before a Civil Court for damages for refund of amount and interest on the said amount. Consumer Forum
According to the Consumer Protection Act, a person who applies for allotment of a building site or for a flat constructed by the Development Authority or entered into an agreement with a builder or a contractor is a potential user and the nature of construction is covered in the expression “service” of any description.
Thus, the Consumer Protection Act provides protection against the malpractices of the builders and developers. It provides a three tier machinery for the redressal of consumer grievances based on the value of goods or services and the compensation if any. Any person dissatisfied by the services or delayed delivery of possession can approach the consumer forum for his redressal. Competition Commission of India
The allottee can file a complaint against the unfair practices of the builders before the Competition Commission of India which has been empowered to investigate anti-competitive practices and impose stringent penalties on the offenders.
A complaint before the Competition Commission can be made against that builder only who is a dominant entity in the market. The definition of dominant position is a subjective definition and takes within its sweep many builders who tend to abuse their dominant position against that of the allottee who has invested money in his project. Regulatory Forums and Criminal Courts
An allottee can approach the regulatory authorities complaining against the non-compliance of the statutory obligations by the builders. In cases where the builders make false promises to the flat purchasers and do not comply with their statutory obligations, the allottee has an option to file a criminal case in a criminal Court against the builder along with the consumer complaint to be filed in consumer forum. New Regulatory Authority
The new regulatory authority called the Real Estate Regulatory Authority that will be set up in states and the appellate tribunals for real estate where the real estate complaints will be dealt with in 60 days. If found guilty of the charges levied by the customers, the builders can face imprisonment for up to 3 years. Conclusion
This summarises the problems that can come your way during the time period of buying a property to finally being able to use it for yourself. Use your rights as a citizen, a consumer, and a lawful owner to avail of these remedies which can protect your from the effect of these problems.
Basic Vastu Tips to be adhered to after buying a home? Introduction
People take great pains to make the home just like they have always dreamt it to be and to make it as comfortable as they can for themselves and their family. One of the important factors that has a big impact on the comfort and vibes of every house, that people live in, is Vastu. Mentioned below are a few tips to make the home a comfort zone that fills its inhabitants with positive energy: Basic Vastu Tips Have a Nameplate outside your Door
There is a science behind the idea of having a nameplate outside one’s door. As per advice from established Vastu experts keeping a nameplate outside their home attracts good vibes. It indicates ownership of the house and it works in the favour of the owners as it helps trace positivity and good opportunities back to you. Avoid Placing Unpleasant Objects in the House
Thorny plants like cactus and other shrubs should not be kept inside the house, they attract negative energies. Avoid keeping artificial cloth or plastic flowers or plants, instead decorate your house with real flowers. Similarly, do not have doorbells that do not have a pleasant ring, they tend to spoil the mood of the house. Avoid Placing Mirrors in the Bedroom
According to Vastu, there should not be any mirrors in the bedroom it is said to be a cause for major discord and ill health in the family. If there is already in the bedroom it is advisable to keep it covered by a curtain and as far as possible from the bed. Light lamps and Incense Sticks
Fire is considered effective in burning away all negative vibes and evils residing in a house. Lighting lamps, diyas and incense at home each evening and morning helps keep the atmosphere positive at home. It acts as a cleanser, shooing away the negativity or any evil eye. Placing Correct Paintings and Portraits
The Picture frames that you hang up on the walls are an important part of the ambience of the house. Picture frames that depict tragedy, war, anger have a negative impact of the atmosphere at home. While photos of an eagle or an owl are considered inauspicious and are not good for a home. Place holy water in the house
In the dark, unused corners of the house, it is advisable to place holy water to ward off evils. Placing holy water also helps the inflow of positive energy. Keep Medicines away from the Kitchen
You can do so by keeping medicines away from the kitchen. This is because a kitchen is an area at home which indicates health and happiness, and medicines indicate otherwise. Hang wind chimes in the house
This is a well-accepted and loved measure to protect your house from negative vibes. Using wind chimes as the tinkling bells help to break negative energy patterns and help the positive energy to flow easily. Conclusion
With these tips it is easier to clear the house of all evils and protect it from negative vibes and bad luck. Those who believe in vastu must try these methods, for those who don’t believe it wouldn’t hurt by try this out. Take a step towards making your home a calm place and bring good luck at your doorstep through these Vastu tips.
All you wanted to know about Sale of Property Introduction
Selling of property, essentially means handing over the ownership rights of land or structure you own, to the purchaser for a definite sum of money. However, selling a property always carries its share of worries and in the present scenario these worries have further multiplied. Here is a list of details that might answer your questions and help you with the selling of property. Can I sell the property, even when the home loan is outstanding?
Yes, you can sell the property even if the home loan is outstanding. The buyer will also demand the copies of stamp duty and registered house documents. Since these papers will be mortgaged with the bank if you have taken a home loan, you can use a photocopy of the required documents to initiate a deal. Depending on the kind of property and ownership, some more documents, such as a no-objection certificate from the housing society and a documented consent in case of jointly owned property, will also be required. How much is the registration fee on the sale of Immovable Property?
According to Section 17 of the Indian Registration Act, 1908, it is mandatory to register the documents regarding the transfer, sale or lease of property. The registration fee currently fixed for registering documents relating to property transactions is approximately 1% of the market value or agreement value, whichever is higher, subject to a maximum of Rs. 30,000. What constitutes conclusion of sale of a property?
The sale process is complete when the ownership of the property is transferred for an indefinite period of time and the new owners possess the right to the sell the purchased property. This right can be fully transferred by registration after the sales deed at the office of the sub-registrar. The Sale deed registration process in India varies from state to state. Some of the general provisions mentioned in the sale deed registration are:
Transfer Title of Property
Terms for Payment
Arbitration What are the taxes involved while selling a property?
At the time of sale of property there are many taxes which are applicable. Some are levied countrywide while the others are levied in specific states only.
The taxes levied on the sale of property are: Capital Gains Tax
This tax is applicable on the profit/capital gain that arises out of the sale of property. This tax is to be paid by the seller and has to be paid by sellers in every state across India as it is a part of the Income tax Act. If the property was held for more than 3 years, capital gains tax is levied at a flat rate of 20 % and indexation benefit is allowed to be deducted from the taxable amount. TDS
The buyer of the property is required to deduct 1% from the amount payable to the seller. This is not an amount to be paid by the buyer from his pocket but must be deducted from the total payable to the seller.
This deducted amount should later be deposited by the buyer with the income tax department. This tax is applicable across India and only for transactions with a value above Rs. 50 lakhs. Service tax
If the property sold is an under construction property, service tax will be applicable on such a property. The effective rate of the service tax for property is 3.625% or 4.35% depending on the size of the property and transaction amount.
This tax is also applicable across the country and must be paid by the buyer to the seller who will later deposit this amount with the Government. VAT
As VAT is a state level subject some states levy VAT on the sale of property while the others don’t. The amount of VAT also varies according the rates prevalent in every state. The VAT is required to be paid by the buyer to the seller. Stamp Duty on Property
At the time of transfer of title of property which has been registered with the government, stamp duty is required to be paid on property. In the case of stamp duty on property, the amount has to be equally shared between both parties. Stamp duty rates and amounts vary from state. How can I qualify for the capital gain tax exemption?
Capital gains from sale of property, which are generally long term assets, are taxed at a flat rate of 20% and can run into much higher amounts. However this amount of tax can be avoided with these provisions provided by the income tax department: Section 54:
Under Section 54 Any Long term gain from the sale of a residential property shall be exempt to the extent this amount is invested in:
Purchase of another Residential property within 1 year or before 2 years after the due date of transfer of property sold.
Construction of a residential house within 3 years from the date of acquisition.
Although as per section 54, the assesse is given 2 years to purchase a new house and 3 years to construct a house property, the capital gains will still be taxable on the sale of the original property in the year in which it was sold. Capital Gains Account Scheme
U/s 54, the assesse has to decide about buying or constructing a new house by the end to the year in which the property was sold or pay tax on the sale. To avoid this situation the Income Tax Act specifies an alternative with the Capital Gains Account Scheme.
The amount not invested in buying or construction of the new house, before the due date of furnishing the returns, can be invested in the Capital Gains Account Scheme. Through this, the amount paid for purchasing or constructing the house will be exempt in that year. If the amount in the Capital Gains Account Scheme remains unutilized after the period of 3 years then the amount in the account it will be taxable under capital gains for that financial year. Conclusion
With these useful tips at hand your property sale should become a simpler and less cumbersome task. Apart from these you can also use the services of an estate agent or a real estate broker as you won’t have to waste time by running around to manage the various aspects of selling like advertising, meeting clients and showing the property to potential customers.