Property Transfer Rules: If a person wants to transfer property in the name of his children, then he has to go through various legal procedures (Property Transfer Act).
How To Transfer Property To Children: Transferring property in the name of your children involves a legal process (Property Transfer Act), which requires careful consideration and following special procedures. Whether you are planning to gift, sell or bequeath the property.
Come, let us know here that what are the procedures one has to go through to transfer property in the name of children?
Verify Ownership and Title
Before starting the transfer process, make sure that you have a clear ownership of the property and there are no pending legal disputes or any other encumbrances. Get the latest property records and title documents from the local registrar’s office.
Select Transfer Type
First, decide whether you want to sell or gift the property to your children. Each option has different legal meaning and procedures. Take advice from legal professionals to take the right decision based on your circumstances.
Property valuation
Fair market valuation is necessary to decide the appropriate transfer price for gifting or selling the property. Hire a certified valuer to appraise the property and provide a valuation report.
Prepare contract of transfer deed
Draw up a transfer deed outlining the terms of transfer, consideration (if any) and conditions of transfer. The deed should be executed on non-judicial stamp paper as per the Stamp Act applicable in your state.
Get No Objection Certificate (NOC)
If you have any existing loan or mortgage on the property, obtain NOC from the concerned financial institution, indicating the person’s consent for the transfer.
Payment of Stamp Fee and Registration
Pay the required stamp duty as per the Stamp Act and register the transfer deed at the local sub-registrar’s office. During the registration, both the parties (transferor and the person in whose name the transfer is being done) will have to be present there along with two witnesses.
Gift Deed or Sale Deed Registration
Register a gift deed to gift the property. Register sale deed to sell. These documents formalize the transfer and legally solidify the right for ownership in favor of your children.
Transfer of possession
Hand over the possession of the property physically to your children. This step is necessary to establish their real ownership.
Update revenue records
Inform the local municipal authority and revenue department about the transfer of ownership to ensure that the latest property records reflect the details of the new owner.
Tax implications
Understand the tax implications of transfer including capital gains tax, gift tax and stamp duty. Consult a tax professional to optimize your tax liability.
