Want to gift your parents a home? That’s a wonderful idea, they’ll love it. Buthow do you make sure you’re not gifting unnecessary hassles along with the house?
Take great care before choosing a home. Check out the locality and its connectivity. Is there adequate water? Will your folks be stranded in the lift during power cuts, or does the apartment have a generator? Are there shopping, utilities and healthcare facilities nearby? Will your folks have to go far to get their basic needs?
Who is the builder? Can you be confident that s/he will continue to support the society after the building is handed over? How good is the construction? Most importantly, is the construction authorized? In India, a number of builders put up apartment blocks or additional floors in anticipation of municipal approval that may then take years coming.
Sadly, you cannot spring the house on your folks like in Bollywood movies – not if you want to save yourself (and your parents) grief from the taxman. A gift in India is one only if there is documentary evidence that it is freely given, and freely accepted.
Two simple letters to this effect will do: one from you (donor) and the other from your parents (donee). You take these to the registrar and get the ownership of the house in the name of your parents.
What will it actually cost?
Property taxes are subject to state government regulations, and vary from place to place. Gift tax, which would have eaten away a little more, has fortunately been done away with. However, you must have the paperwork right to prove that it is a genuine gift and not some underhand deal.
Check out the wealth tax implications and the running costs of the home. The apartment society usually levies maintenance charges on a regular basis, and costs of upgradation of facilities will occasionally crop up. At the time of buying, something called property transfer fee will rear its ugly head and add anything up to 20% of the cost of your gift.
Do you think buying property in India is too much of a hassle, even if it is to gift your parents a home? Or do you think it is well worth the trouble to ensure your parents are comfortably settled in a place of their own, amid familiar surroundings?
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