How is the market value of a property assessed?
The market value of any property is usually based on the following factors: location, kind of property, quality of construction, maintenance, local infrastructure and demand and supply in the market.
What are the benefits of property assessment?
An official property assessment would entail more than just a comparison of recent sales or purchases of similar properties in that particular area. Many banks now insist on assessment certificates before issuing loans using properties as security. It also increases chances of getting a higher amount of loan sanctioned. It can also be used as a negotiating tool during sale of the property. An official certification becomes imperative in situations requiring the precise value of the property legally, such as a will, insurance, balance sheets, etc.
How is a property's stamp duty determined?
The stamp duty is based on the market value or the value decided upon in the agreement, whichever is higher.
Is there any income tax exemption for transferring newly acquired property?
The income tax exemption under Section 54F of the Income Tax Act does not apply if the transfer is made within three years of purchase.
When is a property considered sold?
The property is considered sold with an agreement of sale and with the actual possession of the property for which the entire amount is usually paid.
What is a leasehold property?
When a property is leased to an individual (known as the lessee) for a stipulated period of time, by the owner of the property (known as the lessor), it is called a leasehold property. A fixed amount is decided by the lessor to be paid as lease premium and annual lease. The land ownership rights stay with the lessor, so any transfer of property requires prior permission.
What is a freehold property?
When a purchaser is given ownership rights of a property for a price, that property is called a freehold property. No annual lease charge is levied and the freehold property can be registered and/or transferred in part(s).
What are the advantages in converting a leasehold property to a freehold one?
One becomes the owner of the property when it is converted to a freehold property and the sale deed is registered. A freehold property can be sold, mortgaged or used as standing security, none of which can be done with a leasehold property.
How is a lease agreement devised?
Lease agreements can be of two kinds :
(a) When the lease contract is from year-to-year/exceeding one year's rent/reserving yearly rent, then a registered instrument can be created, which both the lessor and the lessee must execute.
(b) In other cases, an oral agreement followed by delivery of possession is considered enoug
How does one differentiate between carpet area, built-up area and super built-up area?
The area of an apartment or building, not including the area of the walls, in which a carpet can be laid, is called the carpet area. The area of the walls including the balcony plus the carpet area is known as the built-up area. The built-up area along with the area of common spaces like the lobby, elevator, stairs, garden and swimming pool is called the super built-up area.
How is the maintenance charge for an apartment calculated when there are different sizes in a complex?
By law, the maintenance charge depends on the actual area owned by the individual.
Why is a sinking fund collected by co-operative housing societies?
Co-operative housing societies have a statutory obligation to collect a sinking fund in case of future repairs, reconstructions or structural additions. The amount determined by the general body of the society would be at least ¼ percent per annum of the cost of each apartment, excluding the cost of the land.
Does gifting property entail any charges?
When a gift of property is made, a gift deed needs to be drafted by a lawyer. Stamp duty on the market value of the property also needs to be paid, as well as the necessary registration charges.
Do NRIs or PIOs require any special permission to acquire, transfer, gift or rent out immovable property in India?
NRIs or PIOs do not require any permission to acquire, transfer, gift or rent out any immovable property in India. Permission is required only in the event of acquiring or transferring agricultural or plantation property or a farmhouse to another citizen of India, NRI or PIO. All requests for acquisition of agricultural land/plantation property/farmhouse by any resident outside India may be made to the Chief General Manager, Reserve Bank of India, Central Office, Exchange Control Department, Foreign Investment Division (III), Mumbai: 400 001.
How should the purchase consideration for the immovable property be paid by PIOs under the general permission?
The purchase consideration should be paid through inward remittances in foreign exchange via normal banking channels or by funds from any non-resident accounts with banks in India.
Can sale proceeds of such property if and when sold be remitted out of India?
In the event of sale of immovable property other than agricultural land/farmhouse/plantation property in India by a NRI or PIO, the authorised dealer may allow repatriation of the sale proceeds outside India, provided the following conditions are satisfied:
(a) The immovable property was acquired by the seller in accordance with the provisions of the Exchange Control rules/regulations/law in force at the time of acquisition, or the provisions of the rRegulations framed under the Foreign Exchange Management Act, 1999.
(b) The amount to be repatriated does not exceed (1) the amount paid for acquisition of the immovable property in foreign exchange received through normal banking channels or out of funds held in non-resident foreign currency account or (2) the foreign currency equivalent, as on the date of payment, of the amount paid where such payment was made from the funds held in non-resident external account for acquisition of the property.
(c) In case of residential property, the repatriation of sale proceeds is restricted to not more than two such properties.
Are other facilities available for repatriation?
Authorised dealers are permitted to allow remittance of up to USD 1 million per calendar year for any purpose from balances in NRO accounts subject to payment of applicable taxes. The limit of USD 1 million per year includes sale proceeds of immovable properties acquired by the NRI/PIOs while they were resident in India and held for a period of 10 years and above. In case the property is sold after being held for less than 10 years, remittance can be made if the sale proceeds were held for the balance period in NRO account or in any other eligible instruments.
Are NRIs eligible to procure loans for acquisition of a house/apartment for residential purpose from financial institutions providing housing finance?
The Reserve Bank of India has granted general permission to certain financial institutions providing housing finance like HDFC, LIC Housing Finance Ltd., etc., to grant housing loans to NRIs for acquisition of a house/apartment for self-occupation subject to certain conditions. The purpose of loan margin money and the quantum of loan should be at par with those applicable to housing loans to residents. Repayment of loan should be made within a period not exceeding 15 years through inward remittances or out of funds held in the investor's NRE/FCNR/NRO accou