When one purchases a property, its registration and the documents of sale and purchase are of utmost importance. If a case arises where a suit has been filed by a third party with respect to the ownership of the property, a registration document then acts as evidence to prove one’s ownership over the property.

The laws pertaining to the registration of a property have been stated in the Indian Registration Act, 1908. It contains provisions with respect to registration of property and other necessary documents so as to prevent fraud and ensure that the property belongs to the person in whose name it has been registered. It is an authoritative document when the ownership or title of the property is questioned. Further, all transactions involving the sale of the property must be above Rs 100 in order to be registered.

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How to register my property for the first time?

A property has to be registered whether it is for the purpose of sale, transfer, gift, or lease. According to Section 17 of the Registration Act, 1908, any transactions involving the sale of an immovable property, which is a value above Rs 100, must be registered.

Steps that are to be followed before the registration of a property:

  • Encumbrances –

The buyer must check if there are any encumbrances existing on the property. This can be checked at the sub-registrar’s office.

  • Chain of documents –

The buyer should ensure that all the documents are present before purchasing the property. This is important as it helps to identify the transfer of the property from its previous owners.

  • Occupation certificate –

It is a certificate issued by the local authorities, which certifies that the building is fit for occupation and has been constructed as per the required plan)

  • Completion certificate –

It is a document which is awarded after the inspection of the real estate property, stating that the property has been constructed according to the approved plan)

  • Clearance certificate on a home loan –

It is a clearance given by the bank or the lender stating that they do not have any interest in the property.

  • Payment of dues –

The buyer should ensure that the property is free from all pending dues.

  • Preparation of deed –

The sale deed/gift deed should be drafted and executed by the parties to the transaction. All the terms and conditions should be clearly mentioned before the deed is registered.

  • Stamp duty calculation –

The stamp duty is calculated at the time of registration of the property and depends upon the market value of the property.

  • The registration of a real estate property happens at the sub-registrar’s office, under whose jurisdiction the property falls. It is done by taking the signatures of the parties involved in the transaction. The parties to the transaction have to carry all the required documents, e.g. identification documents, etc. The presence of two witnesses for the registration of the property is a mandate.
  • After the sale deed has been registered, the party registering the property (buyer) gets a receipt. After a period of one week, the sale deed can be collected from the office of the sub-registrar.

What is a flat registration?

Quite often the transfer of property is a cumbersome and complicated process. In order to have valid ownership over a property, the buyer has to pay some charges in the form of a registration fee and stamp duty.

Flat registration refers to the registration of changes in ownership and transactions related to the flat/property. So as to guarantee the legal title of a flat that has been purchased it is important to have it registered.

How to online search to out as to who owns a property?

It is essential to check the land records before purchasing the property since the real estate sector is not completely transparent, i.e., it is difficult to ascertain the valid owner of a property. Thus is necessary to carry out due diligence in order to identify the true owner.

The Government has launched the National Land Record Modernization Program (NLRMP) with the idea of computerizing land records. It helps in keeping a check on the ownership of property. Further, it reduces the amount of physical documentation that is required and prevents the loss of any documents.

The steps that are to be followed to check land records online are

  • Visit the official land record website of the state where the property is located. Each state has a designated online portal.
  • Select the district in which the property is situated. After selecting the district, the person would have to select the taluka and the village.
  • In the options given, the survey number of the property has to be added.
  • Click on the search option which will then display the available land records.

To check property records:

  • Visit the official property record of the state where the property is located.
  • Register and log in at the site.
  • Enter the relevant information about the property, including details such as district, village name, etc.
  • Enter the property number or type of property that is being searched. The property wise search will contain details such as property type, district, survey number, etc.

Does a first-time buyer have to pay stamp duty on land tax?

All home buyers have to pay the stamp duty and one-time registration charges as mentioned under Sec. 3 of the Indian Stamp Duty Act, 1899. It is paid once the sale deed has been executed.  Further, stamp duty rates vary from one state to another. In India, stamp duty charges range from 4% to 10%. On the other hand, the registration fee is fixed at 1% on the value of the property. Paying stamp duty and registration fee establish the homebuyer as the legal owner of the property.

How do I claim stamp duty and registration fees?

While purchasing or constructing a housing property, it is necessary to realize that there are methods of obtaining a stamp duty exemption. Stamp duty, registration fees, and expenses that are directly related to the transfer are allowed as a deduction under Section 80C of the Income-tax Act, 1961, up to a limit of Rs1.5 lakh.

This deduction can be claimed only while filing the relevant year’s income tax return, i.e., the year in which the stamp duty and registration fee has been paid. For example, if a property has been purchased on 30th August 2019 and the stamp duty and registration fee have been paid, then they can be claimed under Section 80C in the year 2019-20.

If the property has been purchased jointly, then the co-owners can claim these expenses. They can be claimed in their respective income tax returns based on each property owner’s share in the property. However, the limit of Rs. 1.5 lakhs is applicable as mentioned under Section 80C.

Further, such a claim can be made only when the property’s construction has to be completed and the buyer has legal possession of the property. The stamp paper should be in the buyer’s name and not someone else. At the time of filing for income tax returns, a person does not have to submit any proof. However, if the Income Tax department asks for any proof, documents such as the sale deed, proof of stamp duty paid, proof of registration fee paid, home registration certificate, etc., can be submitted as proof.

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Conclusion

It is important to register one’s property since such a registration prevents any fraudulent activities on the part of the seller and also assures the buyer of the title of the property. The names mentioned in the government documents are considered as the owner of the property. Unregistered properties have no legal validity, and therefore there is a risk that the owner may lose the property, even if the physical ownership lies with him. Lastly, if the property is not registered as per government mandate, he/she cannot claim any legal right over a property.