Immovable property refers to assets that are fixed and cannot be relocated from one place to another. These properties come with ownership rights and legal implications that must be understood. Examples of immovable property are land, buildings, or other structures permanently attached to the ground, Immovable properties are governed by specific laws regarding ownership, transfer, and taxation. These rules ensure clarity in ownership and compliance with tax regulations.
Immovable property includes assets that are permanently attached to the land, such as trees, plants, or buildings. Real estate, comprising residential properties, warehouses, factories, and industrial units, also falls under this category. This sector is regulated by legal frameworks and is subject to immovable property taxation, including the deduction of tax at source (TDS) as per applicable laws. Paying immovable property tax is mandatory for property owners to avoid legal penalties.
On the other hand, movable property refers to assets that can be easily transported, such as jewellery, cash, or personal items like watches.
According to Section 3 of the Immovable Property Act of 1882, it is defined as anything rooted or embedded in the earth or affixed to something that is grounded. However, exceptions like grass, standing timber, and growing crops are excluded from this definition. Immovable property is subject to tax and confers ownership rights as outlined in legal statutes.
| Parameter | Movable Property | Immovable Property |
|---|---|---|
| Meaning | Movable property can be transported from one place to another without altering its size, shape, or other attributes. | The concept of immovable property, on the other hand, defines a property that can not be moved physically. |
| Property Ownership | The ownership rights of movable property are governed by contract laws. | Ownership rights of immovable property in property law are regulated under the Deeds Registries Act and the Sectional Titles Act. |
| Registration | Under the Indian Registration Act, 1908, registering movable property is optional and not legally required. | The transfer of immovable property must be registered by the Indian Registration Act, 1908. |
| Taxation | Movable property is subject to central sales tax and state sales tax, as per the provisions of the General Sales Tax and Central Sales Tax Act, 1956. | The Immovable Property Act exempts sales tax; however, you are required to pay stamp duty under the Indian Stamp Act, 1899, and a registration fee as mandated by the Indian Registration Act, 1908. |
| Inheritance | Movable properties can be easily divided and passed on to heirs without much legal complexity. | Immovable properties, on the other hand, require extensive legal processes for division and inheritance, making the procedure more challenging. |
| Security type | Movable property can be pledged as collateral, but it typically offers lower security and loan amounts. | Immovable property, such as through a Loan Against Property, provides higher security and allows for substantial loan amounts, making it a preferred option for significant financing needs. |
As the owner of an immovable property, you are entitled to various rights that govern its use, benefits, and transfer. The sale certificate of immovable property must be registered to ensure legal protection against disputes.
As the rightful owner, you are entitled to collect rent or lease payments for your property. You can lease it out to others and receive payment in exchange. If the property includes a water body, you have the right to operate a vessel for transportation and charge ferry fees.
The title represents the legal ownership of a property, which can be held individually or jointly. The best property in Chennai comes with a clear title that you can lease or rent without any legal issues.
An encumbrance is a claim that restricts complete ownership rights over a property, making it challenging to sell. For example, a divorcing spouse may claim partial ownership of a property. Easements, on the other hand, are not ownership rights but grant permission to use someone else’s property for specific purposes, such as access or utilities.
Land use involves utilizing property to meet the needs of its occupants while preserving its inherent capabilities. This concept includes property rights, control, and planning. Zoning refers to the categorization of municipalities and communities into specific zones, regulating permitted and restricted activities within each area.
Property taxes are governed under the Income Tax Act of 1951, along with other taxes like stamp duty and GST. These taxes are mandatory for all property owners and are collected by local authorities and municipal corporations as per prevailing tax laws. Immovable property in the Registration Act provides clear guidelines for transferring through registered deeds.
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The legal framework for immovable property in India is complex, governed by national and state-specific laws:
This central legislation provides procedure for the sale of immovable property, along with mortgage, lease, and gifting, defining the rights and responsibilities of all parties involved.
Real estate laws protect ownership rights, facilitate property investments, and regulate transactions such as acquisition, ownership, and transfer, contributing to economic stability.
During the purchase of immovable property from NRI, consider State regulations on property registration, taxation, zoning, and land use, addressing local property-related concerns.
Understanding these immovable property laws at the national, state, and local levels is vital for smooth property transactions and legal compliance.
There are types of immovable property. Here is what comes under immovable property.
Land refers to a specific portion of the Earth’s surface, which may include water bodies, the air column above the surface, or the soil beneath it. Anything naturally found on or below the ground is categorized as land. Additionally, objects placed by humans on or beneath the ground with the intention of permanent attachment, such as walls, buildings, or fences, are also considered immovable property.
Beyond the physical aspects of land, any benefits derived from it are also classified as immovable property. Land is the best property investment in Chennai, which benefits in multiple ways that the owner can leave it to rent or lease, as recognized by the Registration Act.
Special-use properties are those designed for specific public activities. Examples of immovable property in this category include government offices, schools, parks, libraries, temples, cemeteries, amusement parks, and theatres.
These types of immovable properties serve unique purposes, their valuation can be challenging due to the lack of comparable benchmarks in the area. Overall, properties dedicated to particular functions or groups fall under this category.
Agricultural properties encompass land designated for farming, ranching, timber production, orchards, and other agricultural activities. Laws regulate the use of these properties, restricting them from being converted for non-agricultural purposes. Specific rules govern the property’s size, permissible activities, and the number of non-farm structures allowed on such land.
Owning immovable assets comes with several associated rights, including:
Owners have the authority to rent or lease immovable property and receive rental payments from tenants. Similarly, buyers should verify the details of immovable property in official records before finalizing a purchase.
Owners can claim any pending payments or dues from tenants occupying the property under a lease or agreement for the sale of immovable property.
If the property includes a water body, the owner has the right to operate water vehicles for transportation purposes, with the ability to charge a specified fee for this service.
Property owners can permit access to their land for private or public use. Any unauthorized entry or trespassing may lead to legal action.
Owners of immovable property with water bodies have the exclusive right to conduct fishing activities on their land.
Failing to register an unregistered sale agreement of immovable property can lead to disputes, as it lacks the legal enforceability of a registered document. Property or land registration in India, as outlined under Section 17 of the Registration Act, 1908, requires the payment of stamp duty and a registration fee for the sale deed.
The process involves legally recording the documents with the sub-registrar of the jurisdiction where the property is situated. Also, when transferring the ownership between two parties, the sale certificate of immovable property is considered a legal document. During the registration, the authorized representatives of both the seller and purchaser must be present, accompanied by two witnesses.
Investing in immovable or movable property is considered a reliable option, particularly for individuals seeking long-term financial growth. Due to its non-depreciating nature, immovable property is often regarded as a stable and enduring investment. Understanding the concept, types, and associated rights of immovable property is crucial for its ownership or transfer. Consulting a lawyer or legal expert is recommended for further details of immovable property.
Ownership can be proved through deeds during immovable property sale, such as title deeds, property tax receipts, encumbrance certificates, and utility bills in the owner’s name.
Ownership rights, transfer of property, mortgage and encumbrance, easement rights, and tenancy rights all rights are all associated with owning immovable property.
Immovable property includes land and structures attached to it, while movable property includes items like vehicles, furniture, and personal belongings that can be relocated.
Understanding the right definition of immovable property in property law, taxation, and transfer procedures helps avoid or resolve disputes effectively.
Immovable property valuation is determined based on factors like location, market trends, property size, age, and government-set circle rates.
