Investing in real estate is one of the most significant financial decisions you will ever make. Whether you’re buying a home to live in or an investment property to generate returns, understanding the legal and financial regulations is crucial. Chhattisgarh, with its growing economy and expanding real estate market, is an attractive location for property buyers. However, before making a purchase, it’s essential to be aware of specific rules and guidelines that govern property transactions in the state.
This blog will outline five critical rules you must know before buying property in Chhattisgarh to ensure a smooth and secure investment.
Rule 1: Verify Land Title and Ownership
Before purchasing any property, the first and foremost rule is to verify the title and ownership of the land or building. Many buyers fall victim to fraudulent transactions due to a lack of proper documentation.
How to Verify Ownership:
- Land Records: Check government land records through the Chhattisgarh Bhuiyan portal, where land details are available online.
- Title Deed: Ensure the seller has a clear title to the property and that there are no legal disputes.
- Encumbrance Certificate (EC): This certificate proves whether the land is free from legal or financial liabilities such as mortgages or pending loans.
- Mutation Records: Verify the mutation records to ensure that the property is registered in the seller’s name.
- Previous Ownership History: If the property has changed hands multiple times, verify the chain of ownership to rule out any legal issues.
Failure to check these documents can lead to legal disputes and financial losses in the future.
Rule 2: Ensure Property is RERA Registered
The Real Estate Regulatory Authority (RERA) was established to protect buyers from unfair practices in the real estate sector. According to the Chhattisgarh RERA Act, all residential and commercial projects must be registered under the authority.
Why RERA Compliance is Important:
- Transparency: It ensures that the builder provides all project details, including completion timelines, layout plans, and financial disclosures.
- Legal Protection: RERA offers protection against project delays, fraud, and misrepresentation.
- Compensation Rights: Buyers can claim compensation if the developer fails to meet promised deadlines or changes the project structure without consent.
- Online Verification: You can verify whether a project is RERA-registered by visiting the Chhattisgarh RERA website and checking the project details.
Before investing in any new project, ensure that the developer has RERA approval to avoid legal complications.
Rule 3: Understand Zoning and Land Use Regulations
Different areas in Chhattisgarh are designated for specific types of development, such as residential, commercial, industrial, or agricultural use. Understanding land use policies and zoning regulations is crucial to ensure that your property is used as intended.
Key Zoning and Land Use Considerations:
- Agricultural Land Restrictions: Agricultural land in Chhattisgarh cannot be used for residential or commercial purposes unless converted with government approval.
- Master Plans: Check the master plan of the area to confirm if the property aligns with future city development plans.
- Land Conversion Approval: If you intend to use the land for purposes other than its designated use, you must obtain a land use conversion certificate from the revenue department.
- Environmental Clearances: Ensure that the property is not in an environmentally protected zone or a flood-prone area to avoid future complications.
Failure to adhere to zoning laws can lead to legal action and even demolition of unauthorized structures.
Rule 4: Review Taxation and Stamp Duty Charges
Stamp duty and registration charges are crucial financial aspects of property transactions. Before purchasing property, buyers must be aware of the applicable taxes in Chhattisgarh.
Key Taxation Aspects:
- Stamp Duty: In Chhattisgarh, the stamp duty for property registration varies from 5% to 7% of the transaction value.
- Registration Charges: Typically 1% of the property value is charged as a registration fee.
- Property Tax: Once you own the property, you are liable to pay annual property tax, which depends on the location and size of the property.
- Capital Gains Tax: If you plan to resell the property, you need to be aware of capital gains tax implications.
- GST on Under-Construction Property: If you are buying an under-construction property, Goods and Services Tax (GST) applies at 5% for regular housing and 1% for affordable housing projects.
Failing to factor in these expenses can lead to unexpected financial burdens.
Rule 5: Conduct a Legal Due Diligence Check
A thorough legal review of the property ensures that you don’t fall into any legal disputes post-purchase. Many properties in Chhattisgarh have pending legal issues that could jeopardize your investment.
Steps for Legal Due Diligence:
- Check for Litigation Cases: Verify whether the property is involved in any court disputes.
- Builder’s Track Record: If buying from a developer, research their past projects, legal history, and customer reviews.
- Building Plan Approvals: Ensure that the construction plan has been approved by the municipal corporation or relevant authority.
- Loan Clearance: If the property has been mortgaged previously, ensure that all loan clearances are documented properly.
- Obtain a Sale Agreement: Always draft a legally binding sale agreement that includes payment terms, possession date, penalties for delays, and refund policies.
- Take Expert Advice: Consult a legal expert or property lawyer to verify all property documents before proceeding with the purchase.
Skipping this step can result in serious legal complications and financial losses in the future.
Conclusion
Buying property in Chhattisgarh is a lucrative investment, but it comes with regulatory and legal challenges. Ensuring proper documentation, understanding zoning laws, verifying RERA compliance, and being aware of taxation policies are key to a hassle-free property purchase. By following these five essential rules, you can protect your investment and enjoy a smooth property ownership experience.
Real estate investments require thorough research and due diligence. Whether you are a first-time homebuyer or an experienced investor, adhering to these guidelines will help you make an informed and legally secure decision. Always seek professional assistance whenever in doubt, and make sure your property investment aligns with both legal requirements and your long-term financial goals.
