For most of us, buying a new property is probably one of the biggest financial decisions of our lives. However, it’s not as easy as buying a bicycle. Naturally, there are a lot of legal terminologies that one has to be familiar with when buying real estate.
Among many such terminologies is a term that property buyers across India have definitely come across during the transfer of ownership: mutation of property. If you’re wondering what mutation of property is and how important it is in your real estate purchase, then you have to come to the right place!
In this article, you will come to understand everything there is to know about property mutation, including a complete procedure that you can follow to carry it out when buying a new property.
What is Property Mutation?
Mutation of Property, Daakhil-Kharij, or Namankaran in legal terms in India, is the procedure of transferring the ownership of immovable property in the local Municipality records under the name of its new owner.
In other words, once you have completed the legal documentation work of your new property, including the home loan (if required), property registration, stamp duty, etc., you are also required by the law to update the ownership in the local records by completing all the formalities related to the Mutation of Property.
Why is the process of completing Property Mutation so important? Mutation of Property is the only means to ensure that you, as the rightful new owner of the property, can fulfil your recurring property tax payment liabilities.
Property Mutation is an important legal procedure that needs to be completed under the following three circumstances:
- Trade of Property: When a new owner buys an immovable property from an old owner under the legal procedure of property trade, an application for the mutation of the property has to be submitted to notify the local authorities about the transfer of ownership in the local records.
- Death of Property Owner: If the owner of a property, whose name is mentioned in the local municipality records, dies without the transfer of Mutation of Property, an application has to be submitted by the legal heir of the property owner.
- Property Ownership by Power of Attorney: When a property is legally allowed to be managed by someone other than the owner through the means of Power of Attorney, the Mutation of Property is transferred from the actual owner to the assumed owner.
Now that you’ve understood what Property Mutation is and what role it plays in giving you complete legal ownership of your property, let’s now dive right into the procedure of applying for the Mutation of Property in India.
Where and how to apply for Property Mutation?
To apply for the Mutation of Property in India, you will have to get in touch with the local authorities within your city. This process is usually done once the sale deed of the property is complete and there is a validated transfer of ownership on record.
Before you contact the local authorities, you need to ensure the following documents for a hassle-free application process:
- A proven record of the completion of Sale Deed;
- A completely filled-up Property Mutation application with the necessary stamp fee (more details on this later);
- An indemnity bond on a 100 Rupee stamp paper;
- Past records of the property tax payments from the previous owner and
- Other relevant documents to prove ownership of the property.
In cases of transfer of ownership due to the death of the existing owner or power of attorney, additional documents for further proof are also required to be submitted along with the application. In the case of the death of the existing owner, the legal heir must present the death certificate and a copy of the will previously signed by the deceased owner. In the case of power of attorney, a copy of documents for proof must also be submitted with the application.
Once you have submitted the application, the local authorities will do a physical verification at the property in the following days. It takes local bodies anywhere from 15 to 30 days to update their record. Again, to ensure smooth processing of the application, the new owner, under whose name the application of Property Mutation is to be done, should be present at the property for further verification.
In many cities across India, including (but not limited to) Delhi, Gurugram, Noida, Mumbai, Hyderabad and Kolkata, it is also possible to get all the necessary details about the mutation of property through the official websites of the local authorities. In addition to providing you with the facility of applying for Property Mutation online, these websites also show the details of past mutation of the property registered in the records.
But what is the stamp fee associated with the Property Mutation application? Well, that depends on two factors:
- Type of application for Property Mutation: There are different stamp fees associated with each of the three conditions that we have discussed above.
- State where the application is made: Each state in India has different stamp fee requirements.
However, the stamp duty associated with the Property Mutation application is usually a nominal charge that varies from INR 25 to INR 100.
Property Mutation vs Property Registration: What’s the difference?
This is one of the most frequently asked questions around Property Mutation. Naturally, for someone who is not familiar with the process of transfer of ownership of immovable property, the legalities behind it can be a bit tricky.
If you’re also confused between property Registration and Mutation of Property, here’s a summary highlighting the clear difference between the two:
- Property Registration: Legally speaking, registration of a property under a new owner is the process of changing the title of ownership. Through registration, you legally become the owner of the property that you have purchased from its previous owner.
- Property Mutation: Mutation, on the other hand, is the process of updating the ownership of your property in the records maintained by your local authorities.
While both procedures are necessary to follow when you buy a new property, registration is the process of legally getting the ownership of a property. On the other hand, mutation, which is done after the completion of registration, is the process of updating the property records maintained by the city municipality.
Is Property Mutation a Proof of Ownership?
Now that you clearly understand the difference between registration and mutation of a property, the next obvious question is: do both these documents legally act as proof of ownership of a property?
Short answer, no. Only property registration can serve as the final legal proof of ownership of a property.
Why? In legal terms, Property Mutation only serves as proof of possession and not ownership. There have been several instances in the past where former property owners have tried to reclaim the ownership because the new owner hadn’t applied for property mutation. In the eyes of local authorities, the previous owner would still own the property in question.
However, during a judgement on a similar case in 1996, the Supreme Court of India clearly stated that “the mutation of a property in the revenue record does not create or extinguish title, nor does it have any presumptive value on the title. It only enables the person in whose favour mutation is ordered to pay the land revenue in question.”
There have been several other instances where the Supreme Court has directly upheld the same. Therefore, it’s safe to say that registration can serve as proof of ownership of a property while mutation is only proof of possession and cannot be used to claim ownership.
What happens if you don’t complete the Property Mutation process?
If the mutation of property doesn’t serve as any legal proof of its ownership, should you even worry about getting it done in the first place? Well, according to the law, every property owner must complete property mutation once they have completed the transfer of ownership from their previous owner.
It is the duty of every property owner to submit the recurring property tax. The property tax can only be filed under your name once you have completed the process of property mutation with the local authorities. As a matter of a fact, there is a nominal penalty charged to the new property owner if they don’t complete the property mutation process.
An equally important reason why Property Mutation is important is that once you decide to sell your property to a new owner, you will need to present your Property Mutation document as proof of possession of the property in question.
Must-know facts about Property Mutation
By now, you should already be familiar with what Property Mutation is and why it is important. Additionally, you would also know how to complete the process of Property Mutation and what significance it holds in your property documents.
To sum up, here is a summary with additional information to answer all your queries related to Property Mutation:
- Property Mutation is the process of getting the ownership of your property updated in the land revenue department. Once the application process is complete, the new owner is officially in possession of the property.
- Through Property Mutation, the new owner becomes liable to pay the property tax.
- There are three circumstances under which a Property Mutation application is required: 1) Trade of property between the existing owner and a buyer; 2) Death of the existing owner; 3) Transfer of property ownership by Power of Attorney.
- To apply for Property Mutation, the new owner must present all the relevant documents proving the proof of ownership along with an indemnity bond of INR 100.
- In the case of transfer of ownership by death or power of attorney, the new owner must also provide additional documents for further verification.
- Once the application has been processed, physical verification is done by the local authorities at the property. It takes about 15 to 30 days for the application process to complete, after which the property details are updated in the land revenue records under the name of its new owner.
- Property Mutation differs from Property Registration in that the latter acts as the legal process of changing the title of ownership. While Registration serves as the proof of ownership of a property, Mutation only serves as proof of possession of that property.
- The Supreme Court of India has clearly stated that Property Mutation does not create or extinguish the title of ownership of a property, nor does it have any presumptive legal value.
- Every property owner is required by the law to complete the process of Property Mutation, failing which will result in a nominal penalty. Property Mutation is also necessary when the owner wants to sell their property to a new buyer in the future.
- You can also check all the records of the property along with its previous owners through the official website of local authorities in many states across India.
- Property mutation charges vary from one state to another. However, the cost associated with it is nominal and ranges from INR 25 to INR 100.
To conclude, the Mutation of Property is an important process that every landowner should keep in mind. With the facility of online application, it’s now easier than ever to get the entire process of Property Mutation done from the comfort of your home. All you have to do is visit your local authority’s website and submit the application directly from there.
For instance, if your property is located in Uttar Pradesh, you can visit the official e-Nagar Seva portal and complete the Online Mutation process right there. After a quick physical verification by the authorities, your name will be updated as the new legal owner of the property in government records. The certificate of Property Mutation will serve as the proof of possession of the property.