Frequently Asked Questions
Question about buying & Renting Property In Kerala, India.
We highly recommend all customers, especially overseas customers read this before beginning their
search for a propertyto to buy and property rent in Kerala.
Why Read This FAQ?
· NRI Focus: Simplified steps for NRI investment and ownership.
· Comprehensive: Answers on both Buying and Renting property in India.
· Local Clarity: Includes a guide to Kerala Land Terminology (like pattayam and tharavad)
to ensure you understand every local term and detail before you invest.
I. 🏠 Property Purchase & Legal FAQ
Q1. What is the most critical first step before buying a property in Kerala?
The most critical step is Legal Due Diligence. You must verify the property’s Title Deed to ensure the seller has clear, undisputed ownership. We strongly recommend getting a lawyer to check the Encumbrance Certificate (EC) for at least the last 15-30 years to confirm there are no outstanding mortgages or legal liabilities on the property.
Q2. What is a ‘Cent’ and how is it used in Kerala?
Cent is the most common local unit for land measurement in Kerala. One Cent is equal to 435.6 square feet. It is the standard unit used for selling and registering small to medium-sized residential plots, whereas larger tracts (like agricultural land) are measured in Acres.
Q3. Can a Non-Resident Indian (NRI) or Person of Indian Origin (PIO) buy property in Kerala?
Yes. NRIs and PIOs can freely purchase residential and commercial property in India without special RBI permission. However, they are not allowed to purchase agricultural land, farmhouse, or plantation property (except through inheritance or with special RBI approval).
Q4. What is the required Stamp Duty and Registration Fee in Kerala?
Currently, the total charge typically consists of Stamp Duty (approx. 8% of the property value) and a Registration Fee (approx. 2% of the property value), though these percentages are subject to change by the State Government. These fees must be paid to complete the legal transfer of the sale deed.
Q5. What are the essential legal documents I must check from the builder/seller?
Key documents include the Title Deed, Encumbrance Certificate (EC), up-to-date Property Tax Receipts, Possession Certificate, and, for new projects, the Occupancy Certificate (OC) and Building Plan Approval from the local municipality/Panchayat. You should also check the project’s registration status with Kerala RERA.
II. 🏘️ Property Rental & Tenancy FAQ
Q6. Is a written Rental Agreement mandatory in Kerala?
Yes, it is highly recommended. While agreements for 11 months are common to avoid mandatory registration, a written and signed agreement is crucial for both parties. For lease terms longer than 12 months, the agreement must be compulsorily registered at the Sub-Registrar’s office under the Registration Act, 1908.
Q7. What is the typical Security Deposit amount in Kerala?
The standard security deposit (or advance) in Kerala typically ranges from 2 to 3 months’ rent. This deposit is refundable at the end of the tenancy after deducting any damages or outstanding dues.
Q8. Who is responsible for repairs and maintenance in a rented property?
Generally, the Tenant is responsible for minor repairs and day-to-day maintenance (e.g., bulb replacement, minor plumbing leaks). The Landlord is responsible for major, structural repairs (e.g., roof leaks, major plumbing, electrical system faults). This should always be clearly detailed in the rental agreement.
Q9. How much notice period is usually required for a tenant to vacate or for a landlord to request vacancy?
The standard mutual notice period in Kerala is typically 1 to 2 months. The exact duration must be specified in the rental agreement. A landlord cannot evict a tenant without serving the contractual notice period, unless there is a serious breach of the agreement (e.g., non-payment of rent).
III. 🌍 NRI/PIO Property Management & Legal FAQ
Q10. I live outside India. How can I manage my property’s maintenance and tenants without being physically present in Kerala?
The most effective solution is to appoint a reliable Property Manager or a trusted local relative through a Power of Attorney (POA). A good Property Management Service handles everything for you: finding verified tenants, collecting rent, managing minor and major repairs, paying local taxes (Property Tax, Municipal Dues), and providing you with regular inspection reports (often with photos/videos) and financial statements. This is key for Hassle-Free Management while you are abroad.
Q11. What is a POA, and why is it essential for an NRI selling or renting a property?
A Power of Attorney (POA) is a legal document that lets a trusted person (your POA Holder or “Agent”) act on your behalf for property matters in India. It is essential because it removes the need for you to travel to India for every signature or transaction, such as signing a lease agreement, dealing with local authorities, or even completing a sale. The POA must be executed and notarized as per Indian law (often attested by the Indian Embassy/Consulate in your country of residence). Important to NRI/PIO.
Q12. What are the tax implications (TDS) for an NRI receiving rental income from a property in Kerala?
Low Point/Reference: The tax process is different for NRIs and often causes confusion. Tenants in India are legally mandated to deduct Tax Deducted at Source (TDS)—typically 31.2%—from your rent before paying you the balance. This is a withholding tax. However, you can claim significant deductions (like a standard 30% deduction on the rent and Home Loan Interest) by filing your Income Tax Return (ITR-2) in India, and often claim a refund for the excess TDS deducted.
Q13. How does the Double Taxation Avoidance Agreement (DTAA) help me?
The DTAA is a treaty between India and many countries (like the US, UK, UAE, etc.). Its purpose is to ensure that you are not taxed twice on the same income (like your Kerala rental income) by both the Indian and your resident country’s government. You can claim credit for the taxes paid in India when you file your returns in your resident country, providing relief from double taxation. You must claim this benefit when filing your returns in both countries. Important to NRI/PIO.
Q14. Are there any restrictions on bringing the money from a property sale in India back to my country (Repatriation)?
Yes, repatriation is governed by the Foreign Exchange Management Act (FEMA) guidelines. Money from the sale of an inherited property or a property purchased using foreign currency can generally be fully repatriated. For properties purchased with Indian currency (NRO funds), there is an annual limit, typically USD 1 Million per financial year, that can be repatriated from your NRO account after tax obligations are met. All sale proceeds are initially credited to an NRO (Non-Resident Ordinary) account.
Q15. Is there a risk of my vacant property being illegally occupied (encroachment) in Kerala?
Unfortunately, vacant properties are vulnerable to encroachment and trespassing, especially in fast-developing areas. This is a common low point for NRIs. The best defense is to hire a property management service to conduct regular inspections and ensure the property tax and local authority records (Mutation Documents) are always up-to-date and clearly reflect your name as the owner. A caretaker or a physical boundary wall also acts as a deterrent.
IV. 📜 Kerala Specific Land Terminology FAQ
Q16. What is a ‘Patta’ or ‘Pattayam’, and is it the same as a Sale Deed?
No, a Patta (or Pattayam) is not the same as a Sale Deed, but it is a vital document. A Sale Deed is the transfer document that proves you purchased the property. A Patta is a government-issued land revenue document that proves the rightful ownership and possession of the land. It is issued by the Revenue Department and contains key details like the Survey Number, area, boundaries, and land classification. While the Sale Deed is proof of the transaction, the Patta is the official government record that shows the property is registered in your name for tax purposes. Both are necessary for clear title. Important to NRI/PIO.
Q17. I heard the term ‘Puramboke Land’. What does this mean, and can I buy or build on it?
Puramboke Land refers to any land that is owned by the Government and is strictly reserved for public use or community purposes. Examples include land set aside for roads, rivers, canals, public walkways, or government offices. Crucially, Puramboke Land cannot be bought, sold, or used for private construction. If a plot of land you are interested in is classified as ‘Puramboke’ (or has an encroachment on it), the sale would be illegal, and the government has the power to evict any structure built on it. Always insist on a clear title and verify the land’s classification in the revenue records. Important to NRI/PIO.
Q18. As an NRI, what is the best way to pay property tax for my house in Kerala?
The most convenient method is to use the Local Self Government Department (LSGD) online portal, which often uses the Sanchaya system. You can pay your property tax online using your building’s ID number. Alternatively, you can have your appointed Property Manager or POA Holder pay it for you at the local Grama Panchayat or Municipality office, ensuring they provide you with the official, signed receipt immediately. Prompt payment is essential to avoid penalties and establish clear ownership records.
📝 Initial Kerala Land Terminology List
Here is the start of your glossary, focusing on key terms NRIs/PIOs will encounter when dealing with land ownership and titles in Kerala: