A property is not sold in law merely because money has changed hands or an agreement has been signed. For immovable property the Transfer of Property Act and the Registration Act together require a particular form of document, and the deed must be presented for registration within a fixed time.
Key facts
- Must be registered
- A sale of property worth Rs 100 or more (Section 54, Transfer of Property Act)
- Time limit
- Present for registration within 4 months of signing (Section 23, Registration Act); late documents can be accepted within a further 4 months, with a fine (Section 25)
- Stamp duty in Mumbai
- 6% (including 1% metro cess) on the higher of the price and the ready reckoner value; 1% less for women buyers
- Registration fee
- 1% of the value, up to Rs 30,000
- Where
- Sub-Registrar’s office, with identity proof and two witnesses
Why registration is needed
Section 54 of the Transfer of Property Act, 1882 provides that the sale of immovable property of the value of one hundred rupees and upwards can be made only by a registered instrument. Section 17 of the Registration Act, 1908 lists documents for which registration is compulsory, including instruments that create or transfer rights in immovable property above that value. An unregistered sale deed ordinarily does not transfer title.
Stamp duty and registration fee
The deed must first be stamped under the Maharashtra Stamp Act. Duty is calculated on the higher of the consideration and the market value as determined under the ready reckoner, and the rates differ by area and the nature of the transaction. A registration fee is payable separately. The current rates and any applicable local body surcharge should be confirmed from the Department of Registration and Stamps, since they change.
The four-month period
Under Section 23 of the Registration Act a document other than a will must be presented for registration within four months from the date of its execution. Section 25 allows the Registrar, on payment of a fine, to accept a document presented late within a further period, so delay is not always fatal, but it adds cost and risk.
At the Sub-Registrar’s office
The parties, or their authorised representatives, appear along with identity proof and witnesses, and the document is checked, admitted and photographed or recorded as the office procedure requires. After registration the original is returned following scanning.
After registration
Registration is not the last step. The purchaser should apply for mutation of the name in the municipal and revenue records, the society share certificate and transfer in a co-operative housing society, and for the change of the name in utility accounts. In suitable cases tax at source and the purchaser’s own tax position are also to be considered, on the advice of a tax professional.
Before signing
The title should be investigated beforehand: the chain of earlier documents, any charge or mortgage, any pending litigation, and the permissions needed for the property. A search of the registers over a suitable period is a normal part of this.
Free tool: Flat purchase cost calculator. Stamp duty, registration fee and GST on a Mumbai flat.
This article is general legal information and is not advice on any particular matter. Facts differ, and the law and prescribed forms are amended from time to time, so documents and dates should be checked against the current provisions before any step is taken.
Related service: Property Matters in Mumbai