Loan on Property

What is Immovable Property? Types, Rights, and Differences

By Tata Capital
13 February 2025
5 mins read
1964

The things you own—your property—can be classified as either movable (cars, jewellery, etc.) or immovable property (land, buildings, etc.)

Immovable property comes with many benefits, making it an invaluable asset. However, the laws and regulations regarding it can be much more complicated than those regarding movable property, such as transferring of ownership.

This article will help you understand immovable property meaning, its types, and the associated rights.

What is Immovable Property?

Immovable property is property that is fixed in one place and cannot be moved from one place to another. It includes real estate and anything attached to the land, such as trees, houses, factories, and manufacturing units.

Immovable assets can include:

Land
Benefits from the land, such as fisheries and ferries.
Things attached to the earth, such as trees and buildings.
Things attached to what is embedded in the land, such as windows and doors of the building.

Benefits of Immovable Property

Immovable properties have various features and benefits which make them a great investment, including:

Value appreciation over time
Legal regulations that clarify ownership and transactions
Durability and permanence
Versatile utility, including commercial, agricultural and residential uses

Types of Immovable Property

Immovable property can be classified into the following four types, depending on its purpose:

Residential property: It refers to property used for residential purposes, such as single or multi-family dwellings in low-, medium, or high-density houses.
Commercial property: It refers to property used for commercial purposes, such as office spaces, shopping centres, restaurants, etc. Owners must comply with regulations such as parking facilities, permissible heights, etc.
Agricultural property: It refers to property used for agricultural purposes, such as farms, orchards, ranches, etc. This property cannot be used for non-agricultural activities.
Special-use property: It refers to property that the public can use for various activities, such as schools, parks, theatres, etc.

Difference Between Movable and Immovable Property

Movable properties refer to certain assets that are not fixed to the ground and can be moved from one place to another without altering their shape or structure. These include cars, jewellery, money, computers, etc.

The following table illustrates the significant differences between movable and immovable property:

Parameter	Movable property	Immovable property
Ownership	Property ownership rights fall under contract law, which can be handled by any law practitioner	Property ownership rights fall under the Deeds Registries Act and the Sectional Titles Act, which can only be handled by property law practitioners
Registration	Not mandatory	Mandatory
Taxation	Subject to central and sales taxes	Sales tax not applicable, but registration fees and stamp duty charges can apply
Inheritance	Easy process for division and inheritance	Process for division and inheritance is complicated and has extensive legal requirements
Security type	Security type is relatively not high	Higher form of security with a substantial loan amount

Immovable Property Rights

Owners of immovable property in property law have the following rights:

Right to use: The owner has the right to use their property for any purpose, such as commercial or residential.
Right to transfer: The owner can sell and transfer the rights and ownership of their property.
Right to possession: The owner has the right to occupy the property.
Right to encumber: The owner can secure a loan or mortgage using their property as collateral.
Right to collect rent: The owner can collect rent by renting or leasing the property.
Right to collect dues: The owner can collect dues from people who have rented the property and are using it for their benefit.
Land rights: The owner has a right against trespassers on the property, where trespassing on private or public property can be considered a legal offence.
Maritime rights: The owner can maintain vessels on a water body to transport people and vehicles in exchange for a fee.
Fishing rights: The owner has access and fishing rights in a particular water body or factory.

Tax Implications on Immovable Property as Gift

Under the provisions of the Income Tax Act of 1961, immovable property gifts can be taxed according to the following criteria:

Gift type	Scenario	Payable tax amount
Without consideration: Any buildings, trees, land, etc. that fall under immovable property	₹50,000 or more in stamp duty value	Equal to the stamp duty value of the property
With consideration: Any buildings, trees, land, etc., that fall under immovable property	Difference between the stamp duty value of the property and its consideration is over ₹50,000	Stamp duty value of property subtracted by the consideration amount

Some immovable property gifts are exempt from this tax. These exemptions include:

Immovable property gifts from father to son
Immovable property gifts to brother
Immovable property gifts to a relative

Wrapping up

Immovable property is an excellent asset due to its long-term nature, value appreciation, and the rights it grants you.

Secure a loan to aid your financial journey today by pledging your immovable property with Tata Capital’s Lending Against Property at attractive interest rates. Make informed decisions using Tata Capital’s easy-to-understand guide to learn the LAP rate of your loan.

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FAQs

Is a car an immovable property?

A car is not an immovable property. Automobiles, such as cars, are movable property since they are not fixed to the ground and can be moved from one place to another without losing their quality or nature.

What is TDS on sale of immovable property?

The TDS on the sale of immovable property worth ₹50 Lakhs or more is 1% of the payment made to the seller. Agricultural land is an exception to this rule.

What is the purpose of applying for an NOC for an immovable property?

When purchasing immovable property, you need to take the necessary permissions and register them with the relevant authority to transfer and guarantee legal ownership over the property. A No Objection Certificate (NOC) confirms that there is no legal entanglement or objections from the current owner of the property, their heirs, or other concerned parties.