Posted On: Apr 30, 2012 | CommonFloor.com
A property transfer to your family member or to a near and dear one is not as easy as you might think. If you own a property in India and wish to transfer it to another person’s name you might as well think that your family member belongs to a similar group. Indeed, it is always safe that you seek legal help when it comes to property transfer. There are various circumstances in which one can transfer property to another person’s name. In case of death, selling your property or gifting it can be are options that can be considered. Properties can vary from a unit to apartments, houses, flats, holiday houses, vacant blocks of land, rental properties and hobby farms.
Once you have decided to transfer the property to another person, you need to know the basic and important formalities required in the process of a property transfer.
Know the valuation or the market price: It is very important that you get the precise valuation of your property before transferring it. Doing this will give you a clear idea about the fluctuations of the capital gains tax event (CGT event).
Hire an attorney: It is always better that you hire an attorney if you’re either gifting or selling the property. An attorney will help you fill out and file the quit claim deed precisely. It is also possible that you can fill out the forms by yourself but you might get a little confused and might require a lot of time. You can also acquire a quit claim deed online as well.
Quit claim deed: This deed is signed in order to transfer any ownership interest of the owner without making any promises regarding the properties interest. They are basically used in order to clear up the title problems or to transfer the property amongst couples after separation or any informal decisions. It is very important to write the precise and complete names of the transferor and the transferee.
Get a warranty deed: It is very important that you get a warranty deed in order to transfer the property to another person’s name. It is also known as the “Grant Deed”.This transfers ownership of the property and promises transfer of property of the owner to the transferee.
Legal description of the property: Mentioning a precise legal description of your property at the time of transferring is very important. Details like your address, landmark, few specifications and dimensions are the details which are needed to be mentioned.
Exclusions: The idea of exclusions is to clearly mention that while transferring the property between people, both the receiving and the giving parties are exempted from being taxed. This can be applied in case of a parent, child, in-laws, step children, and so on.
Gift deed/Will deed: Transferring a property can either be as a gift or as per mentioned in a will. If a person is transferring the property in order to escape the liabilities, he/she will not be exempted from paying the liabilities. The transfer of property as a gift deed will require a stamp duty, whose value and purpose rate will be fixed by the government. It also has to be registered. In case of a Will deed, the stamp duty is implied and the Will will take effect only after the death of the person. There is an option of the Will deed being either registered or not registered.
Country name: It is mandatory that you write the name of the country where the property is situated. The form has to be filled with precise information.
Purchase price:In case you’re selling the property, you will have to enter the purchase price. If you’re gifting the property, you will have to enter the nominal monetary amount in the form.
Notarizing the deed: While you’re notarizing or transferring your property, it is important that you find a suitable notary public in order to notarize the deed.
Points to be remembered:
- Other than a relationship breakdown, the stamp duty is payable for other reasons while transferring.
- The market valuation of the property has to be given to the Office of fair trading in order to calculate the stamp duty.
- If the property has a mortgage amount, you will have to discuss this issue with the person who is receiving the property.
- There are a certain amount of costs which will be involved while transferring property.