Taking a home loan is common these days as it is that financial instrument which helps you to own your dream house. However, opting for a home loan is the good option but do you know your Home Loan Application can get rejected due to many reasons. Income, credit score, age are the most common reasons among them. But do you know the Khata under which your property comes is also one of the important criteria for lenders to look for? And many of the home loan application gets rejected for this.
Khata is one of the essential legal revenue documents. Khata is a proof that the property owner has an account with BBMP for paying the property taxes. Khata is basically an account of a person who is having a property in Bangalore which contains the tax details of the property. This Khata means the account is basically with Municipal Corporation. The Khata certifies that a property owner is liable to pay property for their property.
Khata (account) contains all the details related to the property which includes the property’s owner name, property size, location of the property and all the other details which are required for filling the property tax. In Bangalore, Khata decides evaluation of the property’s owner. In a Khata, the nature of property is also mentioned as whether the property is commercial or residential in nature. As when this is mentioned in the Khata it becomes easy in Licensing and for using it for trade purpose and to acquire Loan on it.
The Khata Certificate
The Khata Certificate is fundamentally a document that a property proprietor/owner requires to enlist his/her property or for the exchange of the ownership that basically happens when a property is sold or even if an owner wants to transfer his/her property to any other. With a specific end goal to make a demand for the Khata authentication the proprietor of the property needs to compose a letter to the BBMP (Bruhat Bangalore Mahanagara Palike ) and furthermore join their most recent paid assessment receipt to it. These reports should be submitted with the board alongside a standard cost of Rs. 25 for every property they present the letter for. It is this permit or declaration issues by Khata that will empower the property proprietors to apply for water and power associations or so far as that is concerned getting their hands on a business permit.
Different Types of Khata
There are two types of Khatas A and B. These two khatas denote two types of properties that exist under BBMP. The concept of Khata came into existence in 2007 when BBMP was formed to simplify the property taxes in Bangalore. In brief, Khata came into existence to improve the tax collection procedure from the property.
BBMP maintains two registers for the property taxes.
The first register is A Khata and it contains the list of the fully legal properties in Bangalore.
The second register is B Khata and it contains the list of illegal or semi-legal properties in Bangalore.
Difference Between A Khata and B Khata
An ‘A’ Khata certifies that a particular property owner has paid all the relevant property taxes to the BBMP. A Khata property also denotes that the property has been build under the laws and government regulations regarding properties.
Having an A-khata document enables property owners to apply for the building licenses, trade licenses, building plan approvals, and avail bank loans on the property.
A ‘B’ khata indicates that the property is illegal, semi-legal or it comes under the violation of government rules and regulations regarding the properties construction or one thing or the other in Bangalore. Even though illegal, BBMP holds the right to collect taxes from them too. This includes properties constructed in violation of bylaws
- Constructions carried out on revenue land
- Properties built on unauthorized lands and layouts
- Buildings which don’t have completion or issuance certificates.
All these properties are listed by BBMP under the B khata.
Having a B khata property is a big hindrance for the property owner in the way to get licenses from the government. The same is with Home Loans- owner of a property which comes under a B khata document cannot apply for loans on the property from the banks.
Important Facts to know about Khata:
Khatas are very important documents which are related to property.
Banks even check for the Khata to approve a loan against property.
Home loan approvals, Generally, lenders do not approve any home loan or any land purchase loans for properties which do not have a valid Khata.
Ease in getting civic amenities, A valid Khata property easy gets approved for the basic civic amenities such as water connection, electricity supply or telephone connection.
License for Commercialization, For the commercial establishment for your property, you need to have a valid Khata.
A Khata reflects the tax history of a property/land, helping the buyer to decide whether to purchase the property or not.
A valid Khata is always necessary to start construction of the building or home.
Home Loans for B Khata
Generally, B khata properties get rejected by the lender when it comes to avail a Property Loan or a home loan. However, there are many financial institutions who offer loans for a B khata property. But to avail a Home loan for a B Khata property it is very important to approach in a right way.
Interest rate of a Home Loan of B Khata Property
Interest rates vary from lender to lender and on the basis of the customer’s profile, which includes his/ her CIBIL Score, Income, and Income to debt ratio along with the type of property.
How to get a B Khata Home Loan?
Most of the Nationalized Bank does not recognize B Khata Properties as a legitimate property and hence they don’t provide loan for the construction or buying a B Khata property.
However, many NBFC gives loans even for a B Khata property. You can get a B Khata Loan from NBFCs like LIC Housing Finance, CAN Fin Homes, HDIL, Indiabulls and so on.
The Documents Required to avail a B Khata Home Loan
- Sale and Mother Deed of the property
- EC (Encumbrance Certificate) showing all due and paid taxes of the property.
- IT returns Proof(ITR) and Form 16 of at least last 3 years.
However, these documents do not guarantee you a home loan for a B khata property, but having these documents surely brings you one step closer to get a home loan. Other are other criteria too which decides your home loan eligibility to avail a B khata loan, those are Your annual income, age, job stability, type of job and so no.
How to Convert B Khata property to A Khata property?
Yes! B Khata properties can be converted into A Khata properties by following these steps.
- Request for District Commissioner conversion of the property. It should be converted from agricultural use to non-agricultural use land.
- Make sure that all property taxes have been paid till date without any dues.
- If there are any dues, clear that first.
- You have to pay betterment charges. It needs to be paid to the civic authority for the amenities in place.
- When all these things are done, the civic authority will verify all the related documents, and when they get convinced, Your property will be converted from the B Khata to A Khata.