Centre Removes Restrictions On Buying Property In J&K
Through the last one year, Jammu and Kashmir’s real estate regulatory system has witnessed a sea change. Starting with the revocation of Article 370 and Article 35A and the bifurcation of the state into two separate union territories in 2019, the impact of decisions on real estate has been phenomenal. In August 2020, Jammu and Kashmir, as well as Ladakh, notified its real estate rules in compliance with the Real Estate (Regulation and Development) Act of 2016, which seeks to structure the real estate sector in India by putting checks and balances in place for real estate developers, agents, as well as buyers. On October 27, 2020, the Ministry of Home Affairs amended, repealed and replaced certain state laws, to remove barriers when it comes to outsiders buying land in this region.
With Union Territory of Jammu and Kashmir Reorganisation (Adaptation of Central Laws) Third Order, 2020 coming into effect, outsiders - that is Indian citizens who may not be permanent residents of Jammu, Kashmir and Ladakh too can invest in land. They, however, cannot buy agricultural land, if they are non-agriculturists. However, in the amended Act, there are several exemptions that enable the transfer of agricultural land for non-agricultural purposes, including setting up of educational or healthcare facilities. The move opens up avenues for private investors. While it may seem inviting at the moment, property investors must wait and watch for further clarity, before they decide to make a move.
Article 370 Revoked: How Will It Impact Real Estate Purchases In J&K
Till now, the property rights in Jammu and Kashmir, were only enjoyed by the permanent citizens of the state. Here on, ‘outsiders’ can also acquire property in the union territory of Jammu and Kashmir. However, at the very outset, it becomes important to warn potential buyers that it is too early to venture into this market. The best time to invest in Jammu and Kashmir, would be after the authorities make clear their plans and rules, with respect to buying and selling.
Speculation often leads to artificial price rise and this has already been witnessed in several parts. For example, when news surfaced that Shamshabad would be the site of the Hyderabad airport, speculative investors invested haphazardly in and around the location, expecting higher returns in future. Unfortunately, land prices remained muted, with none of the speculations coming true.
Property Rights In Jammu and Kashmir
Article 35A was considered to be retrograde, as it did not confer upon Indian citizens (except permanent residents of Jammu and Kashmir) the right to acquire a property in the state, seek government jobs, or contest or vote in elections and seek public aid. Most importantly, it deterred private investments, shutting out job opportunities for many. In short, the closed economy that previously prevailed in Jammu and Kashmir, made little business sense. From here on, the rules may change to be more inclusive for all Indians.
- Inheritance rights of women who marry ‘outsiders’ (who are not permanent residents) are likely to be revised. Women can now own property and their children will have the right to inherit.
- The Real Estate (Regulation & Development) Act, 2016, applied to all Indian states, except Jammu and Kashmir. This is not true anymore. The state RERA may be amended, to make it more buyer-friendly.
- Property rates that so far stayed muted, because of restricted buying and selling may see appreciation. However, at this juncture, this is purely speculative. The government needs to come up with rules pertaining to local laws, before property transactions become common and smooth.
- Jammu and Kashmir relies heavily on tourism. However, there has been inadequate employment opportunities to boost the economy, leading to lack of skilled manpower. The investor’s summit being planned in Jammu and Kashmir in October 2019, may open up opportunities in the field of hospitality, pharmaceuticals, healthcare and agro-processing. Some experts maintian that a change in the administration, could boost the state’s economy and property market.
New Department For Registration
In a bid to provide hassle-free and speedy services to the citizens, the Jammu and Kashmir State Administrative Council (SAC), on October 23, 2019, approved the formation of a new department for registration of documents pertaining to immovable property. Around 464 new posts under various categories will be created under the new department, to make the functioning easy. The department will function under the overall administrative control of the revenue department and will provide speedy services to citizens, for registration of documents pertaining to immovable property like sale, gift, mortgage, lease and bequest. The SAC approved the appointment of additional deputy commissioners and sub-divisional magistrates and assistant commissioners – revenue, to exercise the powers of registrars and sub-registrars respectively, within such jurisdiction to be notified by the revenue department for purposes of the Registration Act, 1908.