Real estate has been an attractive investment asset since time immemorial. Purchasing property may be a strategic investment but there is a complex set of rules and regulations that are attached to owning property. As a common homeowner, you may hire a legal expert to make the process less cumbersome and prevent you from getting into any unwanted trouble. However, it always pays to do your due diligence and get versed with some of the vital aspects of real estate.
We have created a guide to help homeowners get acquainted with some important rules and regulations surrounding real estate matters.
1. Purchasing Property
If you wish to become a new homeowner, you must know about the Real Estate Regulation and Development Act (RERA). Whether you are purchasing a property under-construction or in a dispute with the builder, buyers can approach the State under RERA to protect themselves from unscrupulous builders and protect their hard-earned money. However, you have to follow certain duties as a buyer because failure to comply with them can result in penalties which extend up to 5% of the property cost.
2. Legal Procedure and Documentation
During the purchase and registration, all documents must be verified at the Sub-Registrar of Assurances depending upon the property location. The documents require the signatures and proof of identity of the buyer, seller and two witnesses for successful verification. After submission, the Sub-Registrar will decide if the document is registered or not.
3. Property Registration
Section 17 states of Indian Registration Act states all the necessary documents required for purchasing property, prevent fraud and assure ownership. The Indian Stamp Act discusses the rules related to property registration in which the buyer has to pay 1% of property value as registration fees and 4-10% as stamp duty.
Evasion of stamp duty is punishable by 10 times higher penalty charge. It is important to note that each state can have a different set of rules as they are authorised to modify the centralised laws. As a buyer is not a legal owner until the property is registered, it’s important to follow through diligently on all these steps.
4. Renting and Transfer of Homes
If you decide to rent your home, you cannot enter the premises without giving a 24 hours’ written notice to the tenant under the Draft Model Tenancy Act. If you wish to sell or gift your property, you can do so with the help of the Transfer of Property Act.
5. Selling Your Home
When you wish sell your property, there are certain income tax laws which require you to pay short term and long-term capital gains tax on the profit you make from the sale. However, there is a loophole around it. You can invest the sale profit in another immovable property or a government-formulated scheme to save on taxes.
Want to buy a new home but financial constraints holding you back? Get in touch with Tata Capital and access our wide range of home loans. Whether you need housing finance to remodel your existing home or you’re looking at a home loan to purchase a new property, Tata Capital provides housing loans for all your needs. Avail our attractive home loan interest rates, and highest home loan eligibility to build your dream house.