1. What is Stamp Duty and who is liable to pay the Stamp Duty, the buyer or the seller?
Stamp Duty is a tax which is very similar to sales tax and income tax that has to be paid in full and on time. A buyer has the sole liability of paying the stamp duty unless there is an agreement to the contrary.
2. What is meant by the market value of the property and is Stamp Duty payable on the market value of the property?
Market value of any property means the price at which a property could be bought in the open market on the date of valuation. The Stamp Duty is payable on the agreement value of the property or the market value, whichever is higher.
3.Who is the appropriate authority for knowing the market value of the property?
The Sub-Registrar of the area, in whose jurisdiction the property is located, is the appropriate authority for knowing the market value of the property.
4. What all I need to keep in mind while buying commercial or residential property?
When buying commercial or residential property you must keep these points in mind:
- Market Trends about prevalent rates of property in the vicinity and last known transactions.
- Identify the property you wish to purchase.
- Distinguish between terms and conditions of the contract which are negotiable and those which are fixed e.g. price, payment schedule, time of completion etc.
- List your requirements with a reputed real estate consultant like BOP Group and ask for photocopies of the all deeds of title related to the property to be purchased.
- Examine the deeds to establish the ownership of the property by seller, preferably through an advocate.
- Ascertain the survey number, village and registration district of the property as these details are required for registration of the sale.
- Previous encumbrances and loans, if any, on the property must be cleared before completion of purchase of the property.
- The title of the Vendor to the property must be clear and marketable.
- Finalize commercial terms of purchase of the property.
- Ascertain transfer fees, stamp duty and registration charges to be paid on purchase of the property.
- Ascertain outgoings to be paid for the property i.e. property tax, water and electricity charges, society charges, maintenance charges.
- Request Vendor to obtain, if applicable, consent, permission, sanction, no objection certificate of various authorities such as the (a) society (b) the income tax authority (c) Municipal Corporation (d) the competent authority under the Urban Land Ceiling and Regulation Act (e) any other authority.
- Ask for a pre-approval letter from the lending institution.
5. What are the permission and papers that one should check with the builder when buying a flat in a building which is under construction?
- Approved plan of the building along with the number of floors, just to make sure that the floor on which you are buying flat is authority approved.
- Whether the land on which the builder is building is his or he has undertaken an agreement with a landlord.
If so, check the title of the land ownership with the help of an advocate.
- The building bylaws as applicable in that area and ensure that the builder is building without any violation of front setback, side setbacks, height, etc.
- Check if the specifications given in the agreement to sell of the sale brochure match on the ground or not?
6. What constitutes completion of the sale?
The transfer of a property is concluded when you have a sale deed/ agreement for sale with actual possession. Generally, in all cases the entire amount is paid simultaneously with the handing over of physical possession and signing of the transfer documents.
7. Within what time period should an agreement/deed have to be registered?
The property agreement should be registered with the Sub-registrar of assurances under the provisions of the Indian Registration Act within 4 months of the date of its execution.