Looking to own a property? There are various ways to own one with minimum hassles and numerous benefits! Joint ownership is one such way, where a piece of real estate can be owned by more than one person. The best thing is, you can choose from a range of parties to be your partner in the property – your spouse, parents, children, siblings, friends, colleagues or even distant relatives.
Here’s how the benefits of joint ownership can indeed be substantial:
For a Home Loan
While there are no restrictions in jointly owning a property with anyone, joint home loans call for certain restrictions. Banks tend to favourably consider home loan applications, where the joint owner is a co-borrower and is related to them. Lenders do not sanction joint home loans for relations such as friends, brothers or sisters.
Smooth Succession of Property
In case of single ownership, the transfer of property can be complicated. However, if the property is jointly owned, all the hassles could be avoided. Joint registration of property is always better as the co-owner is always the successor. This prevents unwarranted problems in the future after the demise of any owner.
If you, as a joint owner, are merely a co-owner, you can’t claim any tax benefit. Tax breaks can only be claimed if you are a co-borrower of the home loan availed for the property. Co-borrowers of a property can claim a deduction on the interest portion of the home loan up to Rs.2 Lac each under Sec 24.
Similarly, for repayment of the principal home loan amount, co-borrowers can claim a tax deduction of up to Rs.1.5 Lac each under section 80C, presuming you do not have any other investment or expenditure qualifying for Sec 80C.
Simply put, with a joint ownership, each person has complete hold of the property. Both of them have equal rights in the property and hence, enjoy equal benefits.
Authored by Goel Ganga Developments, one of the renowned real estate builders in Pune