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Married and planning to
buy a house? Co-owning it with your spouse has many benefits. Both can get tax benefits, also it enables you to bargain
for a bigger loan amount by clubbing your wife’s income.
It also enables easy transfer of property to your children and keeps legal
heirs at bay, in case a dispute crops up. Here's a ready reckoner why joint
ownership is a good idea:
1. Bigger loan,
better rates
So you’ve spotted
your dream house and don’t have the dough to buy it? Fret not, housing
finance companies, HFCs are here for just that. HDFC, ICICI, SBI, LIC Housing
Finance, Stanchart and Citibank are few of the companies that offer housing
loans. As an individual, depending on your income may not be enough, to raise
the full amount required to purchase your dream house. But then if your wife
is employed, you can club your wife’s income too. That way, you’d not only be
able to get a larger loan amount but also a better interest rate. Your HFL
would only be happy with this arrangement since this would help them spread
the risk. SBI home loan officials told moneycontrol, “It's better, if the
property is jointly held because for some reason, one of the individuals is
not able to pay up an EMI, then we can always recover it from the
other."
2. Tax benefits
Joint ownership
means tax benefits galore for both of you. Chartered Accountant, Jacob
Verghese explains, “In case of a joint ownership, the husband as well
as the wife individually will be able to claim deductions under Section 24 of
the Income Tax Act, for up to Rs 1,50,000 for interest. You can claim tax
benefits for your principal amount under Section 80 C for a maximum of Rs
100,000.” . But there’s a precondition for this. Lawyer, Vinay Singh says,
“The proportion of shares must be specified in the agreement, or else the
co-owner will not be able to claim deductions. For instance, whether the
shares are 60:40 or 80:20 between the co-owners must be specified clearly in
the purchase agreement"
Ameet Patel, Partner,
Kanu Doshi Associates says, "In most cases this doesnt happen. In the
absence of such clause in the purchase agreement, the couple must internally
agree to a proportion and abide by that by making payments of EMI
accordingly."
3.
Pledging becomes easy
Future
borrowings for any other purpose becomes easier. For instance, if your spouse
is away and you need to go in for a loan, you can easily pledge your house
which would not have been easy otherwise.
Joint ownership enables
easy transfer: Says Verghese, “If it’s a joint ownership, it's easier for you
both to nominate your children as the future owner of your property. But if
your spouse is the sole owner of your house, he would have to nominate his
partner as the future owner and subsequently the latter would have to
nominate the children.
4. Marital
Disputes
Administrative Manager at Federal Bank, Jhony Joseph says, “It's better
to have a joint ownership, in case of a home when one sees the increasing
number of marital disputes these days. There are cases where the wife is
thrown out of the house by the husband and she has no roof over her head. But
in case of a joint ownership, she will have equal rights, her interest is
secured."
5. Makes better
business sense
In cases where the husband and wife have an office at home, each can claim
the expenses made on the house as business expenses. Says Joseph, “Also, if
the home is bought jointly - either of the spouses will not be able to
mortgage it without the consent of the other. It serves as a check on
any unwise decisions made by the other.”
6. Keeps legal
heirs at bay
Lawyer, Prakash Shah says, “It's always better to jointly own a house.
Because, if the property is jointly held by the spouses and one of the
individuals is no more, the property will easily be transferred to the
co-owner with minimum legal hassles.”
But if it is not jointly held, there can be various issues that could crop up
when one spouse dies. Heirs and dependents will get the benefit of the same.
Besides, there are cases wherein after the death of the mother, the father
goes for a remarriage and subsequently, the interests of the children are not
taken care of. But if the house was held jointly, the right will easily pass
on to the children.
With so many plus points
going for it and so may experts speaking for it, it just seems the right
thing to do!
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