Real Estate Tokenisation: Own a Slice Of Property In Digital Units

There’s a shift happening in the Indian real estate sector in terms of ownership. It is called tokenisation, which essentially means turning property into digital units that can be bought and sold online. It works a bit like shares in a company, but here, you are buying into buildings and land.

How Tokenisation Works

Investing in property, by default, means large sums of money, stacks of paperwork, and long lock-in periods. But tokenisation changes that. A property worth Rs 1 crore can be split into 1,000 digital tokens, each worth Rs 1 lakh. 

Investors can buy a slice, not the whole pie. These tokens are tracked on Blockchain software. That makes every transaction traceable and difficult to fake. Smart contracts, automated digital agreements can take care of rent payments or sale proceeds without needing a middleman.

How It Works on the Ground

The process starts with identifying a legally verified property. Once approved, it’s listed on a digital platform and broken into tokens. People can buy these tokens using rupees or crypto. All records are public and permanent.

The system is built to reduce delays and cut out unnecessary steps. Instead of weeks of processing, token trades can happen in minutes. Rental income or resale profits can go straight to token holders without back-and-forth with brokers or lawyers.

Different Models Emerging

Tokenised real estate isn’t one format. It’s evolving in several directions:

• Whole Property Tokens (NFTs): These represent single properties. Whoever holds the token owns the asset.
  
  

• Fractional Ownership Tokens: These allow multiple investors to co-own a property by holding small, equal shares.
  
  

• Rental Income Tokens: Instead of owning property, you’re buying into its future earnings.
  
  

• Property Bundles: Some platforms combine multiple buildings into one token, offering broader exposure.

What’s Attracting Investors

Tokenisation brings liquidity to a space where money usually gets stuck. You don’t have to wait months to exit. You don’t need large sums of money to invest either.

It’s also transparent. Every change in ownership, every payout it’s all tracked. There is no room for backdoor deals or hidden terms. For Indian investors used to slow, uncertain real estate transactions, that’s a big deal.

There’s also potential for cross-border investing. Someone outside India could invest in local property without flying in, assuming the legal path is clear.

The Gaps No One Can Ignore

There’s no law that defines what a tokenised property is. Even the Securities and Exchange Board of India (Sebi) hasn’t regulated it. 

The Real Estate Act says nothing about digital assets. And land laws differ from one state to another, which makes things more tangled.

Then there are risks on the tech side. If smart contracts are built poorly, they can be compromised easily. If a digital wallet gets hacked or lost, the owner could lose access to the asset. And the tax system hasn’t caught up. It’s still unclear how token trades are taxed, or whether the Goods and Services Tax (GST) applies.