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Buyer's Guide

General

The word 'Real estate' encompasses  several kinds of properties like Residential plot, Flats, Bungalows, Farm houses etc. hence it is very crucial to assess the individual needs before opting for any particular kind of property.

For instance, a person looking for pure investment should ideally prefer a residential plot or a Bungalow as ROI Is substiantially high for these  as compared to any other kind of property. on the other side of the coin , property like a Residential plot is unsuitable for someone looking for an immediate habitat. Hence , pre planning of needs and Budget is essential before looking out for any kind of property.

In addition, investment in real estate is always sizeable. Hence it is of utmost importance to clarify that the money that you are spending goes into safe hands.

A) Few things that need to be look into : 

Approvals from different authorities (whichever applicable) are pre-requisite for any project.
  • Approvals from municipality/ municipal corporation
  • Approval from Airport authorities
  • Approval Highway Authorities
  • Approval from Area development authorities
  • Approvals from Forest & Agriculture(wherever applicable)

B) On site inspection

  • Presence of Approach roads
  • Arrangements for Electricity/water supply
  • Check for public transport facilities, hospitals, educational institutions, shopping facilities etc
  • Degree of Quality Control.

C) Ownership and related issues

      Presence of a clear ownership tital is vital for any Property. Hence see for the following:
  • Previous Ownership/Title documents for last 20 years
  • Previous encumbrance documents for last 20 years
  • Tax paid receipts

Stamp Duty & Registration

Stamp Duty

A stamp duty is a kind of tax that is levied on the transactions concluded by way of documentation or instruments.
According to the norms of Stamp duty, the buyer has to pay a 5% stamp duty on the property's value. This payment is a pre requisite for the full ownership of property

Once the buyer decides to purchase a residential property, the stamp duty is calculated according to the DLC value which is basically the government value of the property.

Registration

The process of registration involves the submission of transaction documents (copies) to the required governmental officer for preservation. Once the stamp duty has been paid on a document, it has to be registered under the Indian Registration Act (1908) with the Sub-Registrar of Assurances of the locality of the property. Unless this procedure is completed, the investor does not have full ownership of   the property.

The procedure  includes a registration fee, which is fixed at 2% of the DLC value. The procedure requires  the presence of two eye-witnesses for completion. Thus, the total cost of Stamp and registration of a property comes out to be approximately 7%  of the DLC value of the Property.

NRI Corner

Some Basic definitions:
1. A person of Indian origin (PIO) means an individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran    or Nepal or Bhutan), who:
(i) At any time, held Indian passport;
or
(ii) Who or either of whose father or whose grandfather was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955);

2. A person resident in India means
(i) A person residing in India for more than 182 days during the preceding financial year but does not include.
(A) A person who has gone out of India or who stays outside (a) for taking up employment outside India or (b) for carrying on outside India business or vocation or for any other purpose as would indicate his intention to stay outside India for an uncertain period.
(B) A person who comes to or stays in India otherwise than (a) for taking up employment in India (b) for carrying on business or vocation in India or (c) for any other purpose as would indicate his intention to stay in India for an uncertain period.
(ii) Any person or body corporate registered or incorporated in India.
(iii) An office, branch or agency in India owned or controlled by a person resident outside India.
(iv) An office, branch or agency outside India owned or controlled by a person resident inside India.

3. Person resident outside India means a person who is not resident in India.
Acquisition & transfer of property in India by an Indian citizen resident outside India.
(a) He can acquire any immovable property in India other than agricultural plantation/ farmhouse;
(b) He can transfer any immovable property in India to a person resident in India and
(c) He can transfer any immovable property other than agricultural plantation/ farmhouse to a person resident outside India if he is a citizen of India or person of Indian origin.
 
Acquisition & transfer of property in India by a Person of Indian origin resident outside India
(a) He may acquire any immovable property other than agricultural land, farm house & plantation by purchase, gift, inheritance subject to the following conditions
(i) In case of purchase the funds should be received in India by way of inward remittance from any place outside India or from funds held in any Non-Resident Account maintained under FEMA/ RBI regulations.
(ii) Gift can be from a person resident in India or from a person resident outside India who is either a citizen of India or a Person of Indian origin.
(iii) Inheritance can be from a person resident outside India provided that person had acquired the property in accordance with the provisions of the Foreign Exchange Law in force at the time of acquisition or from a person resident in India.
(b) He may transfer any immovable property in India other than agricultural land, farm house, plantation by way of sale to a person resident in India or by way of gift to a person resident in India or to person resident outside India who is either a citizen of India or a person of Indian origin.
(c) He may transfer agricultural land, farm house or plantation property in land by way of gift or sale to a person resident in India who is a citizen of India.
 
Repatriation of sale proceeds
In the event of sale of immovable property other than agricultural land/ farm house/ plantation property in India by the above 2 categories of persons repartition of sale proceeds is possible subject to the following conditions:-
(1) Immovable property was acquired in accordance with the provisions of Foreign Exchange law/ Regulations in force at the time of acquisition.
(2) The property is held for at least 3 years from the date of its acquisition or from the date of payment of final installment of consideration whichever is later;
(3) Amount to be repatriated should not exceed (a) amount paid for acquisition of the property in foreign exchange remitted into India or out of Funds held in FCNR account OR (b) the foreign currency equivalent as on the date of payment of the amount paid from funds held in NRE account for acquisition of property.
(4) Repatriation of sale proceeds in case of residential properties is restricted to maximum 2 properties.