What is Immovable Property? What are its Types

As a prospective homeowner or a real estate buyer, one of the common terms you come across is "immovable property". While the term may be part of the jargon used in several different contexts but as a property owner, it is important to understand what it means and what types of property are classified as immovable. This will help you register the property and comply with the legal aspects of property inheritance, transfer, and taxation. Let us delve deeper into the subject.

What is Immovable Property?

We get a clear idea of the legal definitions of movable and immovable properties from the General Clause Act of 1847 and the Transfer of Property Act of 1882. According to these legislations, any property that can be physically moved without causing damage to the quantity or quality of the asset, loss of value, or destroying the property is deemed a movable asset. Any property that does not fall into this definition can be called an immovable property. For example, gold, money, physical shares etc., are all considered movable properties because they can be moved from one location to another without any loss of shape, value, or damage. Land, residential apartment, house, factory, warehouses etc., are all considered immovable assets.

According to Section 22 of the Indian Penal Code, any corporeal property except land and things permanently attached to the earth are movable assets. According to this definition, trees and plants are also considered immovable property. Clarity regarding this becomes important when you are dealing with agricultural land or an orchard.

In any legal or financial context, when you come across the term immovable property, it refers to your real estate assets. For example, there are specific slabs for TDS on the sale of immovable property.

Types of Immovable Property

For further clarity about immovable property and ownership, let us look at the different types of immovable property –

• Land – This is quite easy to understand. Any piece of land that is demarcated and legally owned by a person belongs to him/her. This also includes the resources under the land and the water bodies on the land parcel. Ownership also provides the right to claim rent or profits from the land.
• Things that are rooted in the land – All plants, shrubs, trees, etc., are considered immovable property. This, however, depends on the owner's intention to plant these. If the intention is to derive nutrition or sustenance in the form of fruits while keeping the trees on the land and maintaining them, they become immovable property. If the intention is to chop the tree for wood or timber and use them for construction, they are considered movable property.
• Things built on or embedded in the land – Buildings, factories, warehouses, and any construction embedded in the land are considered immovable property.
• Things connected to the construction or what is embedded in the land – Any part of the building, such as the walls, doors and windows, and also the systems developed for the working of the building, such as the plumbing system, is also considered immovable property.

Transfer of Immovable Property

Transfer of immovable property between two or more parties (except by action of law) is dealt with by the Transfer of Property Act (ToPA) of 1882. According to this law, immovable property can be transferred through sale, mortgage, gift, lease, exchange, and actionable claim.

In the case of a sale, the transfer should be preceded by a deed of conveyance, such as a sale agreement, gift deed, or will. The seller should be a legal adult of sound mind and the legal owner of the immovable property. If the property is valued over INR 100, the transfer must be done through a written agreement and registered. This attracts stamp duty and registration charges as outlined by the Indian Stamp Act 1899. Partitioning or dividing immovable property must follow legal guidelines. When an immovable property is used as collateral or security, it is called a mortgage or lien.

Immovable Property – Rights of Ownership

According to existing legislation, the owner of an immovable property has the following rights – 

• Right to rent collection - The owner has the right to rent or lease the property and collect rent. This can be the collection of current rent or dues after the ownership has been transferred.
• Ferry – If the land contains a waterbody, the owner has a right to transport people through a boat or ferry and collect the charges for such transportation.
• Right of way – The owner of an immovable property can lease the land to construct a road or bridge.
• Fishery – The owner can fish and sell the fish for payment.

As a property owner or a prospective buyer, you must know all the laws and guidelines related to an immovable property before investing.