FAQs
FAQs – General
Typically, if a real estate agent is asked to judge the value of a piece of property, he would do so based on information of recent sales or purchases of similar properties in that area.
Though this may give a fair idea of the property’s market value, an official property valuation would carry more weight. E.g. if you need to use this piece of property as a security against a loan, the bank’s loan approval process would be faster and smoother if the property is certified by an official evaluator. Many banks now insist on valuation certificates before issuing loans using properties as security. The value thus certified may also have chances of getting a higher amount of loan sanctioned.
Another benefit of official valuation is that it is a useful negotiating tool when selling the property.
Such certification also becomes essential in situations where the correct value of the property has a legal bearing—such as, a will statement, insurance papers, business balance sheets etc.
Stamp duty is based on the market value or the agreement value of the property, whichever is greater.
When a piece of property is given or ‘leased’ to an individual (known as the ‘Lessee’) for a stipulated period of time, by the owner of the property (known as the ‘Lessor’), the property is referred to as Leasehold Property. A certain amount is fixed by the Lessor to be paid as lease premium and annual lease. The land ownership rights remain with the Lessor. Transfer of property requires prior permission.
When ownership rights for a piece of property are given to the purchaser for a price, that property is referred to as Freehold Property. Unlike in the case of leasehold property, no annual lease charges need to be paid and the freehold property can be registered and / or transferred in part(s).
If the transfer takes place within three years of purchase, the income tax exemption under Section 54F of the Income Tax Act does not hold good.
Capital Gains are exempt if a person purchases a new flat within two years of the date of sale of the original flat and invests the entire amount of capital gained into the new flat. However, the same is subject to the provisions of the Income Tax Act, 1961. Customers are requested to consult his/her Chartered Accountant in this regard
An agreement of sale, coupled with actual possession of the property would be considered as a conclusion of the sale. Usually, the entire amount is paid at the time of handing over possession.
FAQs – Residencial Properties
The area of an apartment or building, not inclusive of the area of the walls is known as carpet area. This is the area that is actually used and in which a carpet can be laid. When the area of the walls including the balcony is calculated along with the carpet area, it is known as built-up area. The built-up area along with the area under common spaces like lobby, lifts, stairs, garden and swimming pool is called super built-up area
Co-operative Housing Societies have a statutory obligation to collect a Sinking Fund. This is done so that in case the building needs to be repaired or reconstructed in the future, the society has sufficient funds to carry out the work. The amount to be contributed is decided by the General Body of the society; it should be at least ¼ percent per annum of the cost of each apartment, excluding the cost of the land. This fund may be used after a resolution is passed at the General Body meeting with the prior permission of the Registering Authority. This could be to carry out reconstruction, repairs, structural additions or alterations to the building as the architect thinks is required and certifies
A lease agreement can be reached in either of two ways, depending upon each case:
- In cases where the lease contract is from year-to-year / exceeding one year’s rent / reserving yearly rent, then a registered instrument can be created, which both the lessor and the lessee must execute.
- In cases other than the above, an oral agreement followed by delivery of possession is considered enough.
When a gift of property is made, a gift deed needs to be made by a lawyer. Stamp duty on the market value of the property also needs to be paid, as well as the necessary registration charges.
The actual area owned by the individual is the basis for calculation of maintenance charge.