Understanding Immovable Property: Types, Rights, and Differences
Since ages, humans have categorised properties based on their size, shape, and use case. Generally speaking, a property can be of two types: movable and immovable. As their name suggests, movable property is something you can shift or relocate from one position to another without damaging its shape or structure. These include cash, vehicles, watches, jewellery, etc. Immovable property is something that you cannot shift or relocate. A real estate property like a house or office is one of the most common immovable property examples.
Now that you understand what is immovable property, let’s delve deeper into its types, importance, associated rights, and difference from a movable property.
Definition of Immovable Property
Simply put, immovable property is something that you own but cannot move from one position to another. Under Section 3 of the Transfer of Property Act 1882, anything that is rooted in the earth, embedded in the earth, or attached to something embedded in the earth is called an immovable property. However, grass, growing crops, and standing timber are exceptional. Such properties are taxable and give you entitlement rights under legal statutes.
To understand the immovable property meaning, remember that it is a property you cannot move from one place to another. Although its ownership rights are transferable, its location remains the same. Common immovable property examples are land and buildings that people buy and sell, but their location does not change.
Importance of Understanding Immovable Property Rights
Property loan law defines immovable property rights to define a legal relationship between an immovable property and an individual owning it. Understanding these property rights serves as a framework for resolving any ownership-related disputes. It also encourages businesses and individuals to expand and invest in property. Understanding property rights is fundamental to a properly functioning society that allows economic growth, individual autonomy and a justified legal system.
Understanding property rights enables an individual to own, transfer, and control a property with autonomy and personal freedom. As a property owner, you can make better decisions about your property and stay protected against the government's arbitrary actions. Moreover, it encourages your economic growth by claiming incentives for buying and improving a property. Therefore, understanding property rights is crucial to secure your ownership rights and support financial growth.
Simply put, understanding your rights gives you the legal rights to use and control your property and maximise the benefits from it. The rights include your right to use, buy, and sell a property and prevent others from occupying the property without your permission. It also gives you the right to profit from your property in the form of minerals, crops, rent, etc.
Distinction Between Movable and Immovable Property
Now that you understand the immovable and movable property meaning, the following table will give you a better idea about their distinction:
| Parameter | Movable Property | Immovable Property |
| Meaning | You can transport a movable property from one place to another without significantly changing its shape, size, or other qualities. | You cannot transport an immovable property from one location to another. Doing that may change their size, shape or qualifies. |
| Property Ownership | The property ownership rights of a movable property lie with contract laws. Any common law practitioner can deal with them. | The property ownership rights of an immovable property fall under the Deeds Registries Act and the Sectional Titles Act, which only property law practitioners can handle. |
| Registration | According to the Indian Registration Act 1908, registration of movable property is voluntary, and no legal registration is mandatory. | Whenever the owner transfers an immovable property, they must register it under the Indian Registration Act 1908. |
| Taxation | A movable property is subject to central sales tax and sales tax according to certain conditions and restrictions under the concerned state’s General Sales and Central Sales Tax Act, 1956. | Although sales tax does not apply to an immovable property, you must pay stamp duty charges according to the Indian Stamp Act 1899 and registration fee according to the Indian Registration Act 1908. |
| Inheritance | Owners can easily divide and pass on movable properties. | Division and inheritance of immovable properties are complicated and require extensive legal actions. |
| Security type | Although you may pledge a movable property as collateral, the security type is not so high. | Taking a Loan Against Property is a higher form of security with a substantial loan amount. |
Types of Immovable Property
We may categorise an immovable property into four classes depending on its purpose. Let's take a look.
Residential Property
The primary purpose of a residential property is for residential use. These include single and multi-family dwellings in all low, medium, and high-density houses. Mixed-use construction categories include residential and recreational areas.
Commercial Property
Commercial properties include restaurants, office spaces, warehouses, shops, and shopping malls. As a business owner, you can use a commercial property to perform different legal operations in a particular region. However, you must adhere to certain setbacks-related regulations, permissible heights, parking facilities, etc.
Agricultural Property
Agricultural properties are usually land areas that owners may use as farms, ranches, timberland, orchards, etc. According to laws, owners cannot use these properties for non-agricultural use. Rules also apply to the property size, allowed activities, number of non-farm dwellings on the property, etc.
Special-Use Property
Properties that the public can use to perform various activities come under the category of special-use properties. These include government buildings, schools, temples, parks, libraries, cemeteries, amusement parks, theatres, etc. These properties are more complex to valuate because of no comparison in the area. Overall, any property that handles specific activities or groups of people is a special-use property.
Legal Rights Associated with Immovable Property
If you are the owner of an immovable property, you exercise several rights associated with its use and profit. Here is a brief overview:
Ownership Rights
As a legal owner of an immovable property, you have the right to legally collect rent or lease from it. You may let it out to another person and collect dues against the service. If it is a water body, you can maintain a vessel upon it and transport people to collect the ferry from them. Fishes in the water body will also be the owner’s property.
Title and Deed
The title refers to the property's ownership for a single individual or a joint ownership. The deed is the medium of transferring the title. It is a legal document that transfers a property's title or ownership from one person to another. The buyer and the seller must sign the deed to transfer the title.
Easements and Encumbrances
Encumbrance is a claim that restrains a property’s full ownership rights. If your property has an encumbrance, it will become challenging to sell it out. For instance, a divorcing spouse may claim a percentage of the ownership. An easement is not an ownership right but the right to use someone else’s land or property.
Zoning and Land Use Regulations
Land use refers to the process of using a piece of land to meet the occupant's needs while maintaining the land's capabilities. It is a generic term associated with the rights, control, and planning of a property. Zoning refers to the division of communities and municipalities into various zones and districts while permitting and prohibiting certain activities.
Property Taxes
The Income Tax Act of 1951 governs property taxes along with others like stamp duty, GST, etc. According to the Act, any individual property owner must pay property tax according to the current tax regimes. The Indian government charges these taxes through the local government and the municipal corporation.
Conclusion
After going through the above sections, you must have got a clear idea about what is immovable property, its types and legal rights, and the distinction between movable and immovable property. Before buying an immovable property, you should always read the terms and conditions of the transaction to stay safe in the long run.
When it comes to finance, borrow a Home Loan from Hero FinCorp and complete your purchase without paying its cost upfront. If you already own an immovable property, you can borrow a loan against it to cover various expenses. Now that you understand Home Loan vs Loan Against Property, decide the type of loan you require and apply at Hero FinCorp for an easy and quick approval.
Frequently Asked Questions
1. What are the types of immovable properties?
Immovable properties can be of four types: residential, commercial, agricultural, and special-use.
2. What is property and its types in law?
Property is an asset that gives you legal control over a valuable thing. It can be a movable and immovable property based on its mobility.
3. What are movable and immovable properties and types?
Movable property is an asset you can transfer to another location without changing its size or location, such as a vehicle, jewellery, etc. Immovable property is an asset that stays rooted to the earth, and you cannot move it from one place to the other, such as a house or office space.
4. Is a movable and immovable property tangible or intangible?
Movable and immovable properties like jewellery, houses, vehicles, etc., are tangible. On the other hand, properties like shares, digital gold, etc., are intangible.
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