The Complete Guide to Buying Property in India: Due Diligence, Registration and Disputes

The first decision shapes everything that follows — financing, RERA applicability, risk profile, and tax treatment all differ.

Ready-to-move (RTM) property: you see what you buy; no construction risk; occupancy certificate (OC) and completion certificate (CC) already issued; immediate possession; no GST on resale (GST applies only to under-construction). Downside: typically 10-20% more expensive than under-construction for equivalent specifications.

Under-construction property: lower entry price, choice of floor and unit; appreciation during construction; home loan disbursed in tranches (saving interest). Risk: delay (India's most common real estate problem), quality shortfall, builder insolvency, and amenities promised but not delivered. RERA registration is mandatory for under-construction projects above 500 sq m or 8 units — verify this before booking.

Resale flat in a cooperative housing society: no construction risk, no GST, existing society maintenance and bylaws apply; verify the seller's share certificate, NOC from the society, and that the society has an OC for the building.

Plot purchase: higher appreciation potential but no ready structure; agricultural land has severe restrictions on purchase by non-agriculturalists (varies by state); verify that the plot is within a residential/commercial zone, has a development plan approval, and is not in a regulated zone (eco-sensitive, coastal, forest buffer).

Title verification is the most important step in any property purchase and the one most commonly skipped or skimped on. A defective title can result in losing the property — and your money — years after purchase.

Encumbrance Certificate (EC): obtain an EC for 13 years (ideally 30 years) from the Sub-Registrar's office or online portals (Kaveri in Karnataka, TNREGINET in Tamil Nadu, igrmaharashtra in Maharashtra). The EC shows all registered transactions on the property — mortgages, court attachments, prior sales. An EC with no encumbrances does not guarantee clear title but is essential evidence of it.

Title chain: trace the ownership chain from the current seller back at least 30 years — earlier if the property was agricultural before conversion. Every transfer must be by a registered document. Gaps in the chain are a serious red flag. For apartments: review the original land documents, development agreement between landowner and builder, and all prior conveyances.

Khata / mutation records: local authority records (Khata in Karnataka, Patta in Tamil Nadu, mutation register in other states) show who the local authority recognises as the property owner for tax purposes. These are not conclusive proof of title but should be consistent with the registered title chain.

Litigation search: search the relevant civil and revenue courts for pending cases relating to the property. Your lawyer can do this. Court attachments (attachment before judgment, execution attachments) must appear in the EC; lis pendens (notices of pending suits) may not always be visible in EC — a direct court search is more reliable.

Building plan approvals: verify that the building (for apartments) or the layout (for plots) has been approved by the relevant authority (BBMP, MCGM, DDA, CMDA etc.). Unapproved constructions cannot get Occupancy Certificates, cannot be regularised in many states, and face demolition risk. Also verify that the built area matches the approved plan — unauthorised extra floors or encroachments are common.

Once due diligence passes, the purchase proceeds through two documents: a sale agreement (agreement to sell) and a sale deed (the registered conveyance). The sale agreement is signed first and governs the transaction until the sale deed is registered.

What the sale agreement must contain: full description of the property (survey number / flat number, floor, area, parking); agreed sale price and payment schedule; booking amount paid (typically 10-20%); time limit for completing registration; conditions precedent (loan sanction, OC, NOC from society); consequences of default by either party (forfeiture of advance by buyer, or return of advance plus penalty by seller); possession date; indemnities against encumbrances and litigation.

Stamp duty on the sale agreement: in most states, the sale agreement attracts stamp duty separate from the sale deed — Maharashtra levies 0.1% on the agreement value; Karnataka requires stamp duty at the full rate on the agreement if it is treated as a conveyance. Confirm the state-specific treatment before signing.

Advance and token amount: pay by cheque or bank transfer — never cash. Get an unambiguous receipt. If the seller defaults, you are entitled to specific performance (court order to complete the sale) or refund of advance plus damages under the Specific Relief Act, 1963 and Section 73 of the Indian Contract Act.

Negative caveats: lodge a caveat petition in the relevant civil court after signing the agreement — this notifies the court and prevents any ex-parte orders being passed in any suit touching the property without notice to you.

Most property purchases in India are partly financed by a home loan. The loan process runs in parallel with due diligence and should be started early — approval and disbursement typically take 3-6 weeks.

Loan eligibility: determined by income (salary or business), age, credit score, existing liabilities, and the property's value. Most banks lend 75-90% of the property's market value (LTV ratio per RBI guidelines). CIBIL score above 750 typically gets the best rates. Pull your credit report before applying — dispute errors early (dispute process takes 30 days).

Documentation: identity and address proof; income proof (last 3 years' ITR, Form 16, salary slips, bank statements); property documents (sale agreement, title chain, OC/CC, building plan approval, EC); employer certificate or business registration.

Legal vetting by the bank: the lender's panel lawyer reviews title documents and issues a Legal Opinion (LO). Do not treat the bank's LO as a substitute for your own title verification — the bank's lawyer is checking for lender's security, not protecting your interests.

Loan disbursement: for under-construction property, disbursement is in tranches linked to construction stages (foundation, plinth, floors, completion). Pre-EMI interest (interest on disbursed amount before full disbursement) is common — factor this into your cash flow. For RTM property, disbursement is typically in one shot on registration.

If the loan is rejected: lenders must give a reason on request (RBI Fair Practice Code). Common reasons: CIBIL score, property title defect, income insufficiency. Address the specific issue — a different lender, a guarantor, or a revised property structure may resolve it.

Stamp duty is the state government's tax on property transfers and one of the largest transaction costs in a property purchase. It is levied on the higher of the guideline value (circle rate / ready reckoner) or the agreed sale price — undervaluing a property to reduce stamp duty is a punishable offence in every state.

State-specific rates: Maharashtra 5% (men) / 4% (women) + 1% metro cess in Mumbai; Delhi 6% (men) / 4% (women) + 1% registration; Karnataka 2-5% based on value + 10% surcharge in BBMP area; Tamil Nadu 7% + 4% registration. These rates change — verify the current notification before calculating.

Registration charges: typically 1% of the value, capped in some states (Maharashtra caps at ₹30,000) but uncapped in others (Tamil Nadu's 4% registration has no cap — on a ₹1 crore flat, registration is ₹4 lakh). Budget for both stamp duty and registration charges as separate line items.

Payment and process: most states now require online payment via state-specific portals (GRAS in Maharashtra, Kaveri Online in Karnataka, TNREGINET in Tamil Nadu, DORIS in Delhi) before the SRO appointment. Both buyer and seller must physically appear at the Sub-Registrar's Office; Aadhaar e-KYC biometric verification is mandatory in most states.

After registration: file for mutation (change of ownership records in the local authority's books) within 30-90 days. Mutation does not confer title but is required for property tax, water connection, and future sale. File for Khata transfer (Karnataka) or Patta transfer (Tamil Nadu) at the respective local authority.

For under-construction property, the Real Estate (Regulation and Development) Act, 2016 (RERA) is your primary protection. RERA is state-implemented — each state has its own RERA authority, portal, and track record of enforcement.

Before booking: verify the project's RERA registration number and registered completion date on the state RERA portal. Check the builder's compliance history — quarterly updates must be filed by registered builders; builders who stop filing are often in financial distress. Download the registered plan and brochure from the RERA portal — these are the specifications the builder is legally bound to deliver.

Possession delay: if possession is not given by the RERA-registered date, you are entitled to interest at SBI MCLR + 2% per annum for the period of delay. Alternatively, you can seek a full refund plus interest. File a complaint with the state RERA authority — filing fees range from ₹1,000 (Delhi, Karnataka, Tamil Nadu) to ₹5,000 (Maharashtra). Most state RERA authorities schedule a conciliation hearing within 30 days.

5-year defect liability: builders are liable for structural defects, quality of workmanship, and services for 5 years from the date of possession under Section 14(3) of RERA. Defects must be reported in writing; the builder has 30 days to rectify. If not rectified, file a complaint with RERA for compensation.

Parallel remedies: RERA and Consumer Forum complaints can be filed simultaneously — the Supreme Court confirmed this in M/S Imperial Structures v. Surinder Kumar Goyal. For builders who are insolvent, the IBC (Insolvency and Bankruptcy Code) route at NCLT treats homebuyers as financial creditors with priority over unsecured creditors.

Many property purchases in India result in joint ownership — spouses, siblings, or parents and children buying together. Joint ownership creates rights and obligations that must be understood from the outset.

Types of joint ownership: (1) Joint tenancy with right of survivorship — on death of one owner, the property passes automatically to the survivor; not common in India outside of HUF property. (2) Tenancy in common — each owner has a defined share (50-50, 60-40 etc.) that passes by succession on death; most common in India. The share should be stated explicitly in the sale deed.

Partition: if co-owners want to divide the property, they can do so by: (a) registered Partition Deed (consensual, cheapest, requires all co-owners to agree); or (b) Partition Suit in civil court (if one or more co-owners refuse). Courts can order physical partition (dividing the land) or a sale with proceeds divided in proportion to shares. Family property disputes — particularly involving ancestral property and daughters' rights under the Hindu Succession (Amendment) Act 2005 — are among the most litigated matters in Indian civil courts.

Daughters' inheritance rights: the Hindu Succession (Amendment) Act 2005 gave daughters equal rights as sons in ancestral (HUF) property, confirmed retrospectively by the Supreme Court in Vineeta Sharma v. Rakesh Sharma, (2020) 9 SCC 1. A daughter born before 2005 has the same rights as one born after 2005.

Property ownership creates ongoing tax obligations, and sale triggers capital gains tax. Planning both is critical to avoiding unexpected bills.

Rental income: rent received is taxable under 'Income from House Property'. The standard deduction is 30% of net annual value (NAV), plus the actual home loan interest paid (without limit for let-out property, subject to set-off limits for self-occupied). Municipal taxes paid during the year are deductible. TDS at 10% must be deducted by the tenant if annual rent exceeds ₹2.4 lakh.

Capital gains on sale: property held for 24 months or more qualifies as long-term capital asset. From FY 2024-25, LTCG is taxed at 12.5% without indexation (the indexation benefit was removed in the 2024 Budget — though an option to use 20% with indexation was retained for properties acquired before 23 July 2024). Short-term gains (held less than 24 months) are taxed at slab rate. TDS at 1% must be deducted by the buyer if the sale consideration exceeds ₹50 lakh — the buyer is liable to the Income Tax Department even if the seller refuses to bear it.

Capital gains exemptions: Section 54 allows exemption on LTCG from sale of a residential house if the proceeds are invested in another residential house (purchased 1 year before or 2 years after the sale, or constructed within 3 years). Section 54EC allows exemption up to ₹50 lakh if invested in notified bonds (REC, NHAI) within 6 months. Section 54F applies where the asset sold is not a house — proceeds invested in a residential house.