As I mentioned in one of my previous posts, I decided to sell my apartment in India to fund my fees for Sloan Programme.
Even though there are several education loans available in India, I decided to sell my flat for the following reasons:
- I did not have an eligible co-signor within immediate family (parents, sibling, spouse)
- Interest rates were very high for loan against property
- My property price appreciated to decent levels and has been saturated at this level for some time now. I thought it is the right time to exit.
- I am personally against debt with high interest rates and thought that self-financing means more peace of mind enabling me to focus on studies and utilize my time efficiently at once in a life time experience in LBS without any pressure.
- I am also confident that post Sloan I can secure a job with decent income and buy a good house of my choice down the line.
I was thinking whether to write this post or not in this blog, but decided to blog for two key reasons:
- Selling my property was part of my LBS Sloan Journey
- There was no clear information available anywhere on internet on ‘how to sell a property in India, if you are outside India’. Even after talking to several people and also multiple Google searches, I could not get the right information. I want to share my experience to help others who might be in a similar situation.
If you are outside India and want to sell a property in India, there are two ways to do this:
- Grant a ‘GPA’ – general power of attorney to one of your trusted family members or friends in India. GPA enables the person to act on your behalf for all transactions (can sign your bank cheques, can sell your property and pretty much be your proxy for all legal transactions)
- Grant ‘SPA’ – special power of attorney to one of your trusted family members or friends in India. SPA is for a specific purpose/transaction, here in my case for selling my property to a particular buyer.
I went for SPA as this would solve my purpose given that I have identified a buyer and wanted to sell a specific property.
So what is the SPA process?
There are two parts in getting the SPA done.
Part A: SPA documentation and attestation
- Contact a documentation writer in India and ask him to create the SPA documentation. SPA mentions the following:
- Whom you are granting the power
- What is the purpose? If purpose is to sell a flat, this also specifies the buyer details and the agreed selling price as well. This means that this SPA can be used only to sell to a specific person to whom you agreed to sell.
- Get this SPA document printed on Indian revenue stamp papers and ask them to courier to your address. Note that each page should be printed on a stamp paper of Rs20 or higher.
- Once you receive the SPA document, go to Indian embassy in the country where you are staying and sign in front of the consular officer. You need to provide finger prints as well.
- Consular officer will take your finger prints, fees for document attestation (40 AUD in Indian Consulate in Melbourne).
- Note that you would need two witness signatures from persons of Indian origin
- Indian Consulate generally returns the documents after attestation within 2 hours on the same day or on the following day
Part B: SPA Registration
- Send the attested documents back to India
- Ask your documentation lawyer to register this in the registrar office
- As part of registration, SPA authorized person has to provide finger prints in registrar office
- The standard fee for registration is INR 1000. Be mindful that the agents may mislead you saying that you need to pay 1% of the sale deed value. Infact my agent told it is 1%, then he brought it down to 0.1% and when I questioned him on what is the amount he would provide a receipt for, he came down and said official fees is only INR1000. So make sure you ask for a receipt and do not end up paying high fees.
For example if you are selling the property for INR 50,00,000 , then 1% is 50,000 INR and 0.1% is INR 5000. So it makes a huge difference.
5. Once you register SPA, the person you authorized is ready to sell the flat on your behalf to the person mentioned as buyer in the SPA document
Sale Deed Registration Process:
- In addition to SPA, you also need to get the sale deed documentation done by your documentation agent or lawyer on a revenue stamp paper and courier it to you.
- Make sure the details on SPA and sale deed match for buyer name, SPA authorization name etc.
- You need to sign on each page of the sale deed document and send it back to India
- On the day of registration, your SPA and buyer would sign the same sale deed document in front of the registrar
- As a seller, you will not incur any costs for sale deed registration. Buyer will take care of the stamp duty fees.
Tips for successful execution:
- Make sure the name, address of buyer, seller and SPA authorized person are in line with the ID proof used for registration
- Use a reliable courier service as it is a painful process to get the documentation done again and again
- Make sure you sign as per your passport when you sign in the SPA at Indian consulate
- Last, but most importantly, ensure that all the cheques are issued in your name and not on SPA name prior to execution. Have a clause in your sale deed and SPA for this.
Hope this helps. Please reach out to me if you need any additional information.