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Do You Really Own Your Home?

Mr. C.S. Sudheer | Updated On Monday, May 30,2016, 06:01 PM
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Do You Really Own Your Home?

Why do you work hard? It has to be to come home, lay your head on a pillow and forget the worries of the World. Boss has screamed his guts out today…Useless fellow he calls you. Feel worthless today? Got to find a way to feel great. Why not go home and be the boss? You are the king of your home. Every square inch is yours…you own it. Got into a fight with your wife today. She abuses saying, you don’t really own your home. Wonder what this means? Perhaps she’s talking of the home loan you availed to buy your dream home. Got to get to the bottom of this. Do You Really Own Your Home?

The bank owns your home

It’s time to throw a grand party. The last EMI on the home loan has been paid. Your home is all yours. In all this excitement you are forgotten something important. The encumbrance certificate. This certificate states that your home, property or land is free of loans and mortgages. There are no legal dues on your home. Your home has a free and marketable title. You’re the boss of your home. You can do with it as you please.

You availed a home loan, where the bank insisted you pledge your home as collateral (security). The bank registered the mortgage document at the Registrar Office and put a lien on your home. What does this mean? The bank reserves the right to possess and sell your property, if you default on your home loan. If there is a lien on your home, you cannot sell your house, even if you want to. How are you the owner of your home? You have paid back the home loan, but have you approached the Registrar Office and had the lien removed? You can check if the lien on your home has been removed, by applying for a new encumbrance certificate. Now you truly own your home.

The government owns your home

Your own a house. The Government charges property tax on this house. The Government leaves the responsibility of collecting these taxes, with the local Municipal Authority. If your home is a new one, the Government would charge a higher amount of property tax, compared to an older home. You would have to pay lower property tax, if your house is under construction, when compared to a ready home. What happens if you do not pay property tax? If you delay paying the property tax, the local Municipal Authority would impose a huge penalty on you. Your water supply would be disconnected. Life would be a living hell. There is more bad news. Your home could even get confiscated and attached by the Municipal Authority and auctioned to recover the dues. So how are you the owner of your home?

Your home is not yours till you register it

You have been happily living in your home. Have you bothered registering your home in the sub-registrar office? You become the true owner of your home, only once it has been registered in your name. What happens if you have not registered your home? Simple…your house remains in the name of the previous owner. He is the legal owner of your home. Why do you care? Tomorrow, you might want to sell your home. You require a simple document called a sale deed. No property or house can be bought or sold legally in India, without the sale deed. This sale deed would have to be stamped and registered. Only once this is done, you become the true owner of your home. To have any rights over your property, it must be registered in your name. Have you paid the registration charges and stamp duty on your home? If not, you cannot be the owner of your home.

When you buy a house and register it, the Government charges you a tax called stamp duty. Stamp duty is charged on all property transactions in the country. You (the buyer), will have to pay the stamp duty. The stamp duty charged, will depend on the state you reside. To register the house in your name, stamp duty must be paid. You have the Section 17 of the Indian Registration Act, 1908, where it is compulsory for you to register the documents which relate to transfer, sale or even lease of your home. You would have to pay a registration fee to do so. You must register your property, within 4 months of executing the sale deed. What happens if you delay registering your home?  You would have to pay registration and stamp duty charges on the current value of your home, even if you bought it a few years ago. If your house costs a crore, you would have to pay lakhs of rupees in stamp duty and registrations charges. You would also have to pay a huge fine for the delay. Think you still own your home?

Be very careful of encroachments

The person who sold you the house, encroached his neighbor’s property, by violating the property layout. He then registered this encroached layout in your name. You have paid him a lot of money for your home. You find after a few years that a person comes to your home, claiming ownership of part of your property. He shows proof of ownership of part of your property. After scrutiny by the court, you find that this part of the property does not belong to you. The seller has absconded. What can you do? You are stuck in a deep hole.

Are you looking for a property or a residential space? The team of wealth doctors at IndianMoney.com is always there to help and guide you. You can explore this unique Free Advisory Service just by giving a missed call on 022 6181 6111. IndianMoney.com is not a seller of any financial products. We only provide FREE financial advice / education to ensure that you are not mis-guided while buying any kind of financial products.

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Article Author

Mr. C.S. Sudheer

Mr C.S.Sudheer is a management graduate. He started his career with ICICI Prudential Life Insurance and later on worked with Howden India. After his brief stint in Howden India, he moved on and incorporated Suvision Holdings Pvt Ltd which is the sole promoter of IndianMoney.com. He aims to build a nation that is financially literate with investment savvy citizens.

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