Few Legal Tips You Need To Know While Purchasing a Property.
1. What documents and formalities are required while buying property?
Documents required while buying property are Identity Proof like Voters’ ID Card, Passport, Driving License, Ration Card and Pan Card. Be careful of the Sale Deed/Agreement and also check that the complete property chain is mentioned in the Deed.
2. Things you should check at the time of signing the agreement?
Here are the important things to check before you sign the agreement with the developer:
- l Specific apartment allotted, tower number and size
- Details of area including super area, covered area and carpet area Costing
- Date of possession, penalty in case of delay
3. How do you know that a project has legal approvals from authorities?
The best way is to check if the banks are funding the project. Generally, banks approve projects and start disbursement only after all the approvals are in place.
- Ensure that the documents of Title of the property you intend to purchase are clear. A defective Title will create problems.
- Ensure that the building has been constructed as per the sanctioned plan and deviation, if any, is in the allowed limits. It should not be in a low-lying area or in a filled-up water body.
- Ensure that the developer has clearance certificates from the Electricity Board, Water and Sewage Board and other concerned departments.
- Commencement Certificate and Occupancy Certificate are other important documents that are necessary while buying property. Check out the genuine-ness of the documents with the concerned authorities.
- Ensure Agreement for Sale and Sale Deed, duly stamped, executed and registered are in your possession. Both should contain fair clauses for both the parties.
1. What are the taxes you have to pay while purchasing property?
If you are buying a new property, you have to pay Service Tax, VAT and Stamp Duty on the total amount of purchase. If you buy re-sale property, then you do not have to pay any of these taxes.
2. When is the transaction of sale considered complete?
The transaction of sale is considered complete when either the possession is given or Conveyance Deed is registered.
3. When are capital gains applicable and how can capital gain tax be saved / reduces?
Capital gain is applicable when:
- The sold property has been withheld by a person for a period of more than three years from the date of purchase / possession.
- The sale proceeds are invested in a residential property which is bought one year before the sale of property or two years after the sale of first property.
- The new property is bought after the sale of the first property.
- Capital Gains Tax can also be saved by investing the sale proceeds in Capital Gain Bonds.
Note: The above information is for reference only and subject to T&C.