Friday, December 23, 2016

Planning to Buy a new property?Must know things before buying a property!

Nowadays, most of the people invest a big part of their savings in land. But many people don't know what all things to check while purchasing a land and there are a lot of situations where buyers get trapped! Legal issues are the biggest challenge for a newcomer to the field as real estate is becoming the real business these days.

It’s important to go through the cost of property and modes of a fund for you to protect yourself from becoming the victim of fraudulence. Having a good knowledge about the documents that need to be put in place for the purchase of the property which will help you in protecting yourself against cheating.

It is crucial that the entire procedure is dealt systematically to reduce the difficulty that accompanies it. You can find below the list of documents required for buying a property.

·         Title Deed / Certificate of Title of the land: 
Make sure that the title deed of the land is in the name of the seller. Also, you should verify that he has full right to sell the land and that he is the sole owner of the land. It would be wise to get the title deed reviewed by a lawyer.

·         Encumbrance Certificate:
An encumbrance certificate is an evidence that the property has no monetary and legal liabilities. The encumbrance certificate can be obtained from the sub-registrars office where the deed for the land has been registered. In all cases, governmental authorities will urge on a 13-30 years encumbrance certificate.

·         Survey Sketch:
Get a recognized surveyor to measure the land and see that the dimensions, area, borders etc. are exact as per documents.

·         In the case of "Pledged Land":
Ensure that the seller has paid back all the amounts due. Also, check that land is not pledged and if the land is owned by joint holders then get a "release certificate" from everyone involved which is necessary to release all the debts over the land legally.

·         Power of attorney/s if any:
It is a legal document that results in the grant of authorisation from one person to act for another person. Ensure, the POA owner has no objections to selling the property.

·         Tenure of Land:
If the land is leasehold and the residue tenure of the lease is short. An additional ground rent may be payable by the buyer on the renewal of the lease if there is no provision for renewal on old rent. It is also possible that there may be no renewal clause at all.

·         NOC and Dues:
Make sure that seller has copies of certificates such as NOC and Dues if the premises are in a society.

·         Income-Tax:
If you are buying a new property, you have to pay Service Tax, VAT and Stamp Duty on the total amount of purchase. If you buy re-sale property, then you do not have to pay any of these taxes. If you failed to deposit the amount with the income tax department or did not deduct tax at source (TDS) on time you may have to pay a penalty of up to Rs.1 lakh.

Further, if the seller is a non-resident of India, TDS may be deductible from the consideration paid unless certificate for non-deduction or lower deduction is obtained from the concerned Income-tax officer.

·         Agreement:
Guarantee that agreement for Sale and Sale Deed, duly stamped, performed and registered are in your ownership.

·         Commencement and occupancy certificates:
The completion certificate and occupancy certificates from the planning authority are essential for any construction as per the provision of law. Check out the genuineness of the documents with the concerned authorities.

·         Documentation:
The sale document should be properly stamped and registered and the original title deeds should be taken by the purchaser from the seller.

After all these initial checks are made you can go about the actual process of buying the land.

Every area in the country has a defined specific circle rate. These valuations are revised by the government based on the latest transactions that have taken place in any given area. In most cases one has to pay taxes on valuations are lesser than the actual market value of the property.

If you are choosing for a home loan, always confirm with the bank whether the home loans method is eligible for that particular area. Analyze concerning the current property cost, earlier property selling rates. This will help to negotiate and get the best deal.

If you are a foreign national of non-Indian origin resident outside India, you are not allowed to buy all types of property in India. There are Reserve Bank of India guidelines and Foreign Exchange regulations that restrict NRIs from buying certain types of property.  It is illegal for foreign nationals to own property in India unless they satisfy the residency requirement of 183 days in a financial. It is also illegal to buy property on a tourist visa. However, you have no restriction in buying or selling residential as well commercial properties in India. NRIs can make the purchase using Indian currency, through funds received in the country by means of normal banking channels. These funds have to keep up in a non-resident account under the Reserve Bank of India (RBI) and the foreign Exchange management Act (FEMA) regulations.For more details visit and Talk to a Lawyer!

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