Real estate : Joint ownership of property is more beneficial, know ‘why’ here

by amolwarankar
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New Delhi: Most of the people tend to buy property or any other assets under his/ her name. This do not let them enjoy the advantages available under the joint ownership. This is simply because people are not aware about it. However joint ownership of property makes transferring process easier in future as well as benefits in tax exemptions also. Single owners may confined a nominee but then to transfer the property to nominee is a difficult task as it involves lot of paperwork and legalities. Here are few benefits of how joint ownership can be advantageous to the buyer.

Which people can be the joint owner?

There is no law in relation to whom you can make a joint owner while purchasing a property. You can make a close relative, business partner or even close friend a joint owner. While purchasing a property, it is not necessary that the joint holder should also contributes in paying for the property. Even if you are paying all the money alone, it is beneficial to include your wife or children in the property agreement paper as a joint owner. If you are not married, you can make your parents or brother joint owners. You can jointly own property with any number of people.

Know what are the advantages of buying property with joint name

1. While taking home loan:

While giving home loans, banks insist on making all the joint owners jointly creditors. If you apply for a loan by making co-borrowers to your close relatives like spouses, parents or children, then you can get a higher amount of loan. Most banks do not pay much attention to the application of co-borrowers. However, in case of relative or friend they become bit suspicious. The home loan application can also be rejected if a friend, partner or even brother or sister jointly owns it.

2. There is no problem in transferring the property from one name to another.

Nowadays, most people buy flats in housing societies. In this case, it is better to buy property with a joint name. Tommorow god forbidden something happens to one of the joint holders, then the society usually transfer the property in the name of the other joint holder. For this he generally does not seek NOC from probate or other legal heirs. Although the society has a provision to submit nomination papers, it is more difficult to get a flat transfer to the nominee than the joint owner.

3. Income tax and other benefits

Buying a property with a joint name also helps you in better tax planning. You can avail tax rebate on home loan principal under section 80C or section 24b for residential loan. The benefit of both these tax deductions goes to the owner or joint owner. You won’t get the benefit of tax exemption related to home loan if the loan is in your name but the house is not.

Today, it is difficult to get a good house for less than Rs 50 lakh in cities. In this case, at the rate of 8%, an interest of Rs 4 lakh is payable every year at Rs 50 lakh. If you are the only owner of the house and loan is in your name , then you can get the benefit of tax rebate on interest up to a maximum of 2 lakh rupees in a year. However, if you take the same property with a joint name, then both joint holders can claim a tax rebate of Rs 2 lakh each. They can also avail the benefit of tax exemption in the same way in case of payment of principal.

4. Exemptions in stamp duty

In some cases, if there is a registry in the name of a woman, less stamp duty has to be paid. Similarly, if the woman is the first applicant in home loan, then some banks give some discount in the interest rate.

From all these aspects, it has become almost clear that buying houses with joint names is a profitable deal in many respects. This not only helps in transferring the property from one name to another but also gives the benefit of tax exemption.

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