Property
Buying, selling, letting or holding property with family: what each step brings with it, and where we come in.
How people usually arrive.
You are about to sell and want to know the position before you agree a price.
You are buying and have been told to deduct tax from the payment to the seller.
You own a flat with family and are not sure who reports the rent.
You have signed a development agreement with a builder and want to know when the tax falls.
Where we come in.
What you can engage us to help with here, how it usually begins, and what is useful to have.
- Before you sell
- We work through the position while the price is still open: which year the sale would land in, how long the property counts as held, what cost and improvements you can show, and which reinvestment routes would have to be decided on before completion. You get a note of the position and a list of the records to find.
- The buyer’s withholding
- We establish whether the buyer has to withhold, on what and how much, which depends on the price and on whether either of you lives outside India, and we check that what was deposited appears against your name.
- Buying, and how you hold it
- When you are the buyer, we handle the withholding and its reporting, and we look at how the property is held, in one name, jointly or through a family arrangement, because that decision follows the property for as long as you own it.
- Rent
- We settle who reports the rent and in what share, what can be set against it, and whether the tenant has to withhold. Then we report it each year.
- The return
- We prepare the return so the sale, the withholding and the rent agree with the buyer’s and the tenant’s reporting and with the department’s record.
It begins with the deed, the dates and the records of what you have spent since. If you are still deciding, before the agreement is signed is the most useful time to write.
Useful to have, if you have it
- The purchase deed, and the sale agreement if there is one
- Records of what you spent on improvements, with dates
- Loan statements, if the property is financed
- Rent agreements and the ownership split between joint owners
Where this needs another specialist
We do not draft conveyancing documents or advise on title; where that is needed, we work alongside your lawyer. Moving the proceeds abroad may need a certificate from a Chartered Accountant in practice, which is a separate step.
What becomes relevant, and when.
Each consideration at the stage it tends to arrive, explained once. The ones shared with other matters say so.
Before you act
- Timing
When each step of a sale falls, agreement, payment and registration, changes which year the transaction lands in and how long the property counts as held.
- Ownership & joint holding
Whose name the property is in, and in what shares, decides who reports the sale or the rent. Joint holdings are split the way the ownership is, not the way the money moved.
- Residency
If the seller or the buyer lives outside India, the withholding and the reporting work differently. Residential status is settled first.
Shared with five other matters. See them on the map →
- The agreed price
At the deal
- Sale
The sale is the event most of the questions attach to: the buyer’s withholding, the cost you can show, the holding period and the gain.
- Withholding (TDS)
Buyers commonly withhold part of the price and deposit it against the seller’s name. Whether they must, and how much, depends on the price and on whether the seller lives in India. Checking that it was done, and that it appears in your tax credit statement, is a routine step.
Shared with five other matters. See them on the map →
- Cost records
What you paid, plus improvements since, is what a gain is measured against. The dates matter as much as the amounts, and for older property so does how the cost is allowed to be counted.
Shared with four other matters. See them on the map →
- Holding period
How long you have held the property, counted from the right date, changes how a sale is treated.
Shared with four other matters. See them on the map →
- Capital gains
A sale raises a capital gains question. Cost, improvements, holding period, when the property was bought and the reinvestment choice all feed into it.
Shared with seven other matters. See them on the map →
After the sale
- Reinvestment
Putting the proceeds into another property or an approved route can change the position, with conditions attached and clocks that start on the sale date. It is a decision to take before the sale, not after.
- Advance tax
A large gain part-way through the year may need advance tax paid in instalments rather than at filing time.
Shared with 01 Starting a business · 02 Tax returns · 04 Listed investments
- Where the money goes next
Every year
- Rent
A let property has annual reporting of its own: the rent, the loan interest and the joint split. Depending on the rent, the tenant may have to withhold as well. Each is worth getting right rather than approximated.
- The loan
Relevant here too. Explained under Before you act.
At filing
- Income-tax return
The sale, the rent and the buyer’s withholding are all reported in the return. Both sides’ reporting has to agree.
Shared with nine other matters. See them on the map →