How do you transfer property from parent to children?

The best way to transfer property from parent to children is **GIFT DEED** because the transfer of property is effective immediately after registration and the stamp duty is just Rs.5000

Documents required for Gift Deed:

• Identity Proof of parent and children (Donor and Donee)
• Identity proof of two witnesses
• Registered Deed (of how the Donor acquired the property)

Procedure to execute a Gift Deed:

• Draft the Gift Deed
• Pay the Stamp Duty
• Register the Gift Deed in sub-registrar office

One of my clients wishes to gift a property to his daughter, and we assisted him in registering the gift deed in a sub-registrar office in Bangalore. Refer to below Gift Deed image

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Few other ways to transfer property from parent to children are:

• WILL
• Sale Deed
• Relinquishment Deed

There are certain advantages & disadvantages and we shared below:

1.WILL: is a legal document that expresses a person’s (testator) wishes to distribute his/her property after death

• Transfer of property becomes effective after the testator’s death. Will is not mandatory to register but registering WILL enhances the authenticity of the document
• Registering WILL is an affordable option because there is no stamp duty, the registration fee is just Rs. 200 and we can register in any sub-registrar office (not restricted to jurisdiction)

For Example, if your property is in Mumbai and you live in Bangalore, you can register the WILL in Bangalore.

• As the situation changes, a person’s preference may change. Will can be updated or modified as many times as necessary. Whereas other deed like Gift Deed and Sale Deed cannot be updated or modified once registered

Documents required for WILL:

• Identity Proof of Testator (person giving the WILL)
• Identity proof of two witnesses
• Not required to furnish property title documents in sub-registrar office for registration of WILL

Procedure to execute WILL:

• Draft the WILL
• Pay the registration fee
• Register the WILL in sub-registrar office

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2. Sale Deed: is a legal document that transfers property ownership from parent to children in exchange for monetary consideration. The ownership transfer becomes effective immediately after the registration

Registration of Sale Deed incurs a high stamp duty of 5% consideration or guidance value, whichever is higher. Apart from stamp duty, the TDS is applicable

Instead of paying such high stamp duty and TDS for Sale Deed, we could choose gift deed because the stamp duty is just Rs. 5,000 and no TDS. Generally, the Sale Deed is most suitable for dealing with non-family members. Since you are family members, you must take advantage of stamp duty and taxation

Documents required for Sale Deed:

• Identity proof of seller and buyer
• Identity proof of two witnesses
• Title documents (of how seller acquired the property)

Procedure to execute Sale Deed:

• Draft the Sale Deed
• Pay the Stamp Duty
• Register the Sale Deed in sub-registrar office

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3. Relinquishment Deed: is applicable when a parent wishes to release their share in a jointly owned property to children

For example: Father, mother, and daughter are legal heirs of the property. Father and mother can release their share in a property to daughter by registering the Relinquishment Deed. 

The transfer of ownership becomes effective immediately after the registration, The Stamp Duty is around Rs. 5,000

Documents required for Relinquishment Deed:

• Identity Proof of parent and children (Releasor and Releasee)
• Identity proof of two witnesses
• Title documents

Procedure to execute a Relinquishment Deed:

• Draft the Relinquishment Deed
• Pay the Stamp Duty
• Register the Relinquishment Deed in sub-registrar office

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We assist with property registration, please Whatsapp to +91-97424-79020

Thank you for reading…