What is Movable and Immovable Property?
In the realm of real estate, property is not like any other investment. It is one of the best tangible and long-term investments. However, when leveraging its benefits, it is essential to understand the associated legalities, such as the difference between movable and immovable properties. Learning about these factors helps you make an informed decision and stay protected. To help you with this, in this blog, we will explore the differences between Movable and Immovable Property.
Let’s begin!
Movable and Immovable Property:What Is Movable Property?
Movable property is the assets that can be transferred to another place. For example, objects such as jewellery, clothing, furniture, electronics, commodities, agricultural products, machinery, tools, etc., fall under this section.
Legal Definitions of Movable Property According to The Laws of India
When defining movable properties in India, it is essential to clarify the relevant laws governing these properties. According to the General Clauses Act, 1897, Section 3 (36), any property that is not classified as immovable can be considered a movable asset in India.
The Sales of Goods Act, 1930 (Section 2(7)) and Registration Act, 1908, Section 2(9) state that even stock, shares, standing timber, growing crops, and grass are considered movable property, as they are not listed as immovable property. The Transfer of Property Act, 1882 (Section 3) aslo defines the same. While the Indian Penal Code, 1860 (Section 22) defines assets as those that can be seen and touched. It includes money and machinery because they are not permanently attached to the Earth.
Movable and Immovable Property:What is Immovable Property?
Immovable property is that which can’t be transferred or moved from one place to another. It includes land, buildings, and any permanent structures attached to the planet. Due to this, immovable properties cannot be relocated without altering their fundamental characteristics.
Legal Definitions of Immovable Property According to The Laws of India
According to the General Clauses Act, 1897 (Section 3(26) immovable property includes land, benefits arising from it, and objects attached to the Earth that cannot be severed. On the other hand, Section 2 (6) of the Registration Act, 1908, refers to assets permanently fastened to the Earth. It includes land, lights, ferries, and fisheries. However, it excludes standing timber, growing crops, and grass.
What Are the Different Types of Immovable Properties?
As the most accepted definition of immovable property is whatever is rooted to Earth, therefore, many people get confused. There are many types of immovable properties, and some of them are-
Things Rooted to Earth
When it is said that anything rooted to Earth is immovable property, growing crops, trees and grasses are not considered here. Anyone who owns the land can cut the crops or trees on it and sell them. Here, the only immovable property is the land, not the objects on it.
The Embedded Things
Things embedded in the Earth are considered immovable assets, including houses, buildings, factories, natural water bodies, and other real estate properties. Neverthelss, anchors embedded in Earth do not come under this criterion.
Chattel Attached to the Earth
Under this category, consider things attached to houses or buildings which are attached to the Earth as immovable properties. It includes furniture based on its strength and capacity. Nonetheless, not all furniture is immovable.
What are the Legal Importance of the Legal Distinction Between Movable and Immovable Assets?
Learning about these legalities is not important while buying or renting an apartment. It is because you are planning to book the flat. However, knowing the details is mandatory.
Legal Rights and Obligations
Determining whether an asset falls under the category of immovable or movable property is crucial in determining the rights to it. For example, the rights of a tenant (a flat is considered an immovable property) differ significantly from those of a car owner. In the event of any dispute, these legalities help ensure a fair and equitable outcome.
Tax Regulations
Taxes on immovable and movable properties vary significantly, and understanding them is essential for effective financial planning. Immovable properties, such as apartments, attract taxes including property tax, stamp duty, registration fees, and capital gains tax upon sale. On the other hand, movable assets are generally subject to varying taxes depending on the asset. For instance, if you buy a car (movable property), you must pay the road tax.
Investment Decisions
Before investing, you must consider the advantages and disadvantages, and mobility plays a significant role in this decision. For example, movable assets such as stocks and bonds offer liquidity, while immovable assets like real estate provide long-term stability. Understanding these differences helps you make an investment that aligns with your portfolio.
Dispute Resolution
While buying any asset, you must consider the chances of disputes. In legal disputes, the classification of property as either movable or immovable can influence the court’s jurisdiction. Moreover, the applicable laws and the resolution process also vary. For instance, disputes over immovable property often involve land laws and require intervention by civil courts. On the other hand, disputes related to movable property may be resolved more expeditiously.
Way of Ownership Transfer
Whether it is a movable or immovable asset, following teh right way of transferring ownership is mandatory. This ensures the legality and prevents any potential legal issues. The ownership transfer process of movable property is relatively simple and formal. Typically, signing some papers is enough. However, immovable properties entail more title deeds and registration; therefore, more legal formalities are required.
Depreciation and Appreciation
It is a common saying that property is an investment for the future. Nevertheless, not every property offers a high return; hence, it cannot be considered a good investment, and this is often due to depreciation. Movable properties tend to depreciate more and are not worth it for the future. For example, if you buy a car that costs ₹5 lakhs today, after five years, you might get only ₹1 or ₹2 lakhs. This is because cars typically depreciate over time. On the other hand, an apartment or a house doubles in value after a few years.
Inheritance
The inheritance of the property also depends on the categorisation (movable and immovable). Moveable assets are relatively easy to transfer by inheritance, usually without undergoing judicial processes. On the contrary, immovable properties can only be dealt with legally through probate or letters of administration.
Final Thoughts:Movable and Immovable Property
The definitions of movable and immovable might seem trivial; however, they hold paramount importance in the legal world. Movable properties require lower red tape and offer higher flexibility, while immovable assets, such as a flat, symbolise stability and long-lasting investment. Consider all these factors to make a smart investment and leverage the highest benefits.
Are you looking for an investment apartment? Contact us. Ar Vinayak Realtech, we have several projects in the Newtown Rajarhat area, which is the latest economic zone of West Bengal. As the area is witnessing the footprints of famous MNCs like Infosys and TCS, the demand for property is expected to grow in the upcoming years. Moreover, our flats are equipped with the latest amenities, which will help you achieve the best possible resale price.
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