Q. What is meant by valuation of property?
Ans.The valuation process evaluates the market value of the property. Demand and supply forces operating in the market, as well as other factors like type of property, quality of construction, its location, the local infrastructure available, maintenance, are all taken into consideration before the market value is decided
Q. How does property valuation help?
Ans. 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 valuer. 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.
Q. What is the meaning of a property’s market value? Is stamp duty payable on market value?
Ans. The price that a property can command in the open market is known as its market value. Stamp duty is based on the market value or the agreement value of the property, whichever is greater.
Q. What does the term ‘Leasehold Property’ mean?
Ans. A property (plot/ built up) in which perpetual leasehold have been granted by the title paramount in favor of the lessee. The title paramount i.e. president of India in these kinds of properties acts through DDA, L & DO. Leasehold properties are not freely transferable. Depending upon the covenants pf. the lease deed prior permission of the lessor (DDA/LDO) is required to transfer the property. One is required to pay charges such as 50 & of the unearned increase and conveyance.
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.
Q. What does the term 'Freehold Property' mean?
Ans. A property where title paramount has conveyed the property in favor of the purchaser by conveyance/ sale deed with no restriction on the right of the holder of the property to further transfer the property. Record of ownership of the freehold property can be ascertained from the office of the sub-registrar. It can be transferred by registration of sale deed.
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).
Q. Are there any benefits in converting to a freehold property from a leasehold one?
Ans. There are several benefits: if you convert the property to a freehold property, you become a full-fledged owner by getting the sale deed and having it registered. A freehold property has better marketability and can be sold, mortgaged or kept for standing security, which cannot be done with leasehold Property.
Q. Are there any income tax considerations while transferring newly acquired property?
Ans. 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.
Q. What constitutes conclusion of sale of a property?
Ans. 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.