Property Registration and Its Importance in India
The sale of immovable property exceeding Rs.100 must be registered according to the Property Registration Act, 1908 under Section 17. Property registration is carried out when the property is sold or inherited or gifted. Every state government charges a certain amount for property registration, and it varies from one state to another. Discount is provided if the property is registered under women or senior citizen names.
Documents required to register property:
- Seller and Buyers passport size photographs
- Latest property registers card copy
- Aadhaar card, Pan card or any other identity proof of parties involved
- Power of attorney
- Old sale deed copy that is verified
- Municipal tax bill copy
- No objection certificate copy under the land ceiling act
- Construction completion certificate
- Stamp duty and registration fee payment receipt
Things to check before registering a property:
- Chain of documents – The buyer must cross-check the documents related to when and how the property is transferred from one owner to another.
- Due clearance – Before buying the property, check for the electricity bill, water bill, taxes, etc. should be cleared and updated.
- Calculation of stamp duty – based on the market value of the property, stamp duty is calculated, and it varies from one state to another.
- Deed preparation – The terms and conditions, buyer and seller details, etc. must be drafted in a deed. It can be a sale deed, gift deed, lease deed, etc.
- Encumbrance – Encumbrance certificate gives the assurance that the property is free from legal disputes and mortgages. The buyer must check this before buying this property.
Benefits of property registration:
- Land ownership related disputes can be resolved easily
- Land ownership details can easily be fetched from the sub-registrar office if the property is registered
- Encroachment by trespassers can be stopped, as the property owner is given an official plan of land, post-registration
- Any mistake done by the registrar at the time of registration due to which the buyer has incurred losses, will be compensated by the government
- The seller of the property will obtain tax deduction benefit under section 80C if the property is registered
- Property registration also helps in the mutation of property. The mutation is a process of transfer of ownership from one person to another. This helps the government to collect tax from the right owner.
Factors that determine the property registration cost:
- Property type – The registration fee is different for commercial and residential property. A higher fee is charged for commercial property as it is built for business purposes and requires additional amenities.
- Age of the property – The registration charges are high for a new property when compared to an old property. In case of an old property, the value would be depreciated from the time it was constructed.
- Transfer type – Registration charges are less if the property is registered as a Gift Deed and if the title is transferred to a family member. A standard registration fee is charged if the property is purchased from a non-family member.
- Property location – If the property is located close to the bus station, railway station, or airport, in developed towns and metro cities, the registration charges are high.
- Owner’s Gender – The government provides a discount if the property is registered under the woman’s name.
- Amenities – The registration charges are high for amenities such as the library, gym, swimming pool, clubhouse, etc.
Property Registration Process:
- Based on the circle rate in that area estimate the property value
- After the calculation of the property value, a non-judicial stamp paper must be purchased. The stamp paper can be obtained online or purchased from the licensed stamp vendor.
- Based on the nature of the transaction, a deed must be typed on the stamp paper. This deed can be a sale deed, gift deed, etc.
- To get the deed registered, both the seller and buyer should approach the sub-registrar office, along with two witnesses. The buyer and seller should carry photographs, identity proof, and all the other necessary documents.
- The registration fee must be paid before the property registration
- The submitted documents are verified and a receipt will be issued after the deed is registered. To collect the sale deed, visit the registrar office after two to seven days.
What is the circle rate?
Circle rate, which is also known as guidance value is the minimum value fixed by the revenue department that is considered during sale or transfer of a plot, built-up house, or commercial space.
What is the time limit for registering property?
The property registration should be executed within 3 months generally. The buyer and seller decide the time limit for registration.
How long will it take to obtain the registration document?
In metro cities, the registration document is obtained on the same day of registration. In rural places, it might take 3-5 days to obtain the registration document.
Which law governs property registration in India?
The property registration is governed by the Registration Act, 1908.
What is the impact of not registering the property?
If the property is not registered, the owner will be at risk because there is no legal evidence to claim ownership rights of the property. In case if the government acquires the property for infrastructure development, the owner cannot claim compensation.