When a piece of property is given or ‘leased’ to an individual (known as the ‘Lessee’) for a stipulated period of time, by the owner of the property (known as the ‘Lessor’), the property is referred to as Leasehold Property. A certain amount is fixed by the Lessor to be paid as lease premium and annual lease. The land ownership rights remain with the Lessor. Transfer of property requires prior permission.

When you buy a property in India for residential or commercial purposes, the legal ownership change must happen. It occurs when you register the immovable asset in your name in the records maintained by the government. Registration refers to this process of recording the document in the presence of a registering officer. After the registration, the registration office preserves the copies of the original document for future use.

As mentioned earlier, the Government of India has made it mandatory to register any property bought in the country according to the Registration Act 1908. This act indicates the compulsory registration of all properties purchased of value exceeding INR 100. The rule also applies to the property you receive as a gift even when you have not spent money to purchase it. Not registering the property can result in a penalty according to the Registration Act 1908.

Buying a property and registering it involves paying extra money. So, you need to remember that when you plan to buy a property, the final price is not the amount quoted by the seller. It is only the money you need to pay the seller. Easily, you need to add other charges such as stamp duty and registration charges to it. Most people fail to register the property due to the need for payment of the excess amount. But, paying the stamp duty and registration charges can only give legal status to the sale.