Information on house property and the taxable income from property
House property consists of any building or land appurtenant thereto of which the assesse is the owner. The appurtenant lands may be in the form of a courtyard or compound forming part of the building. But such land is to be distinguished from an open plot of land, which is not charged under this head but under the head Income from Other sources or Business Income as the case may be. Besides, house property includes flats, shops, office space, factory sheds, agricultural land and farm houses as well as custom home building process.
House property includes all types of house properties like residential houses, cinema building, workshop and hotels. Income from house property is taxable in the hands of its legal owner in whose name the property stands. Owner for this purpose means a person who can exercise the rights of the owner not on behalf of the owner but in his own right. A person entitled to receive income from a property in his own right is to be treated as its owner, even if no registered document is executed in his name. The conditions to be satisfied before income of property to be taxed include the following
- The property must consist of buildings and lands appurtenant
- The assesse must be the owner of such house property
- The property may be used for any purpose, but it should not be used by the owner for the purpose of any business or profession carried on by him, the profit of which is chargeable to tax. If the property is used for own business or profession, it shall not be chargeable to tax.
The important inspections undertook on your house property
In general, most buyers prefer to pay for the following inspections so that the inspector is working for them, not the seller. You may want to include in your sales agreement the ability to cancel the agreement or renegotiate the contract for a lower sales price or for the needed repairs if you are not satisfied with the inspection results. Water should not drain towards the house at any cost.
You should have the home inspected. An inspection should determine the condition of the plumbing, heating, cooling and electrical systems. The structure is also examined to assure it is sound and to determine the condition of the roof, siding, windows and doors. You should be present to ask any question when inspection is taking place.