Today we are going to cover an important topic that is Joint Property In fact, many subscribers requested to cover the benefits of the joint property in a video So in this video, we’ll cover the benefits of the joint property Like tax benefits and other monetary benefits But along with this, I’ll discuss the challenges in buying a joint property.
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| Joint Property Ownership & Joint Home Loan Tax Benefits in India |
For example, when you buy a joint property and there are 2 co-owners If by chance, one co-owner dies In such a case, how the property will be transferred So this is a very sensitive topic about which we don’t think while buying a property But you might know that many court cases are there and there are many disputes of joint property as well We should know this so that we can tackle these issues if we’re buying joint property So we can say that there are many benefits of buying a joint property But challenges can also be there that’s why it is a double edged sword You should know how to handle this sword So stay tuned with this video. I’ll discuss all the issues in detail Let’s start this video. In this video, we’ll discuss 5 important topics related to the joint property First of all, let me talk about the benefits Benefits are mainly monetary benefits But before that, let’s understand the context that in what case we buy a joint property Case 1 is if you want to buy with any of your relatives Case 2 is if you want to buy with an acquaintance I’ll not discuss much about the second case in this video In that case, you should do a lot of due diligence, the person should be trustworthy There should be an agreement How will you sell that property in future, etc. So you have to write all these points in detail In this video, we are going to talk about the first case in which generally people buy a property with their relative In that, either it is a blood relation like mother, father, sister, brother or with spouse Both the cases are a bit different so I’ll talk about each separately So we understood in which cases do we buy a joint property. Now let’s talk about the benefits A huge benefit of buying a joint property is you get more home loan Let’s say you’re buying a property with your spouse So if you both are earning, the incomes of both are clubbed and home loan eligibility increases So it’s natural that if you’ll get more home loan, you’ll be able to buy a big house How much home loan you’ll get on the basis of your salary or income I made a detailed video on it. You’ll get the link in the description I also shared a free calculator with which you can calculate your home loan eligibility and you’ll get to know that of how much value house you can buy Since we are talking about the home loan, let me discuss a few more points A good Cibil score is important for a home loan Your credit score decides whether you’ll get a home loan easily or not Generally, if your score is more than 750 out of 900, you get a loan easily If by chance, the Cibil score of one of the co-owner is less then also chances are high that you’ll get a home loan easily But there could be a problem also If by chance, you defaulted EMI in future then the Cibil score of both the co-owners will decrease. This could be a disadvantage Let me tell you one more thing When the banks give joint home loan, it is compulsory that you should have a co-ownership If there are 2 partners, both should have ownership and then only you’ll get a joint home loan But the converse is not necessary That means, if there are 2-3 co-owners, it’s not necessary that you have to take a joint home loan A single home loan can also work whether there are 2-3 partners I want to discuss one more case Let’s say you bought a house with your spouse But the husband was earning and the wife was not You took joint ownership and joint home loan as well then the liability would be there for both In such a case, you should not take a joint home loan Banks sometimes insist you knowingly to go for a joint home loan Because if in any unfortunate incident, one co-borrower dies then the liability remains with the other He/she have to give that home loan I would recommend that if you are buying a joint property and you are the single earning member then take a single home loan So we discussed about increasing home loan eligibility, i.e you’ll be able to buy a big house The second benefit is the tax benefit You can claim different tax deductions I did a video in which I discussed the tax benefits of a home loan So watch that video. I made it in detail. In that, you get 3 deductions 1. Principal payment, which is covered under sec 80 C Under sec 80C, there is a limit of Rs 1.5 lakhs You can take this separately Let’s say you’re doing Rs 3 lakhs principal repayment in 1 years then you can claim 2 tax deductions of Rs 1.5 lakhs each if there are 2 partners Apart from this, you get a deduction on interest repayment Under sec 24, you can show up to Rs 2 lakhs as a loss from property That too you can show separately. That means Rs 2 lakhs done by husband and Rs 2 lakhs by wife So both can claim different tax deductions With this, one more section is introduced If you bought a house in affordable housing of a value less than Rs 45 lakhs and you took a home loan in FY 2019-20 Then you’ll be able to claim additional tax deduction of Rs 1.5 lakhs So if the interest repayment is up to Rs 3.5 lakhs then one person can claim a tax deduction So husband and wife can claim an interest deduction of Rs 3.5 lakh each and can separately do principal repayment of Rs 1.5 lakh each So Rs 5 lakh each tax deduction can be claimed separately by husband and wife I am just talking about husband and wife as an example If you bought a house with your father, mother, sister, or brother The tax deductions can be claimed separately Apart from this, there is one more way of tax saving If you bought a property and rented it, you must be getting a rental income That rental income can also be divided between the two And maybe, let’s say you were getting a rent of Rs 2 lakh per year and because of that, you were entering into a higher tax bracket Lets say for now your income was Rs 9 lakhs You added Rs 2 lakhs as the rental income. So you entered into the above Rs 10 lakh bracket So you can lower that bracket by splitting Rs 2 lakhs as Rs 1 lakhs each if there are 2 partners and now the income is less than Rs 10 lakhs and you saved tax because of the bracket So these were the tax benefits. Apart from this, there is one more monetary benefit When you buy a property, you have to pay stamp duty and registration charges Stamp duty is a big amount If husband and wife buy a property in joint ownership the stamp duty will be charged less. How? For example, the stamp duty for women is 4% For men, it is 6% and in the case of joint ownership, it becomes 5% So if the husband buy property in his name, he has to give 6% stamp duty but if bought in joint ownership, it will be 5% only So saving of 1% is done If the property is in the name of the wife, there is an additional saving od 1% But that is a different matter because it’s your decision In this video, we’re discussing the benefits of joint ownership So these were the major benefits of buying a joint property The 4th point is insurance When you bought a house and took a joint home loan For that, the bank sells insurance that is called a home loan protection plan The special thing about this plan is, let’s say if one person dies in an unfortunate incident then the insurance company will pay the home loan portion of that person Let’s say if the husband dies, the liability of the wife will stay as it is and these home loan protection plans are expensive Instead of this, if you both buy a term insurance plan separately You can check your total liabilities and according to that, if you both buy the term insurance plan separately, and these term insurance plans are not much expensive Like if the husband bought a term insurance plan, that one plan can cover the whole home loan liability and it will cost less than the home loan protection plan So this is an indirect monetary benefit If you’re buying insurance, you can save money there as well The 5th point is Succession It is a bit sensitive topic but we should know about this as well When we buy joint property, we don’t think much about the future we take care about the monetary benefits but how this property will be transferred in future After the person dies, will this property will be passed on to the legal heirs or to the co-owner So understanding 2 terms is very important These are very similar when we hear so please pay attention One is Joint Tenancy This means the property will be transferred to the other co-owner after the death of one So let me give you an example If husband and wife are the joint owners If they want the property to get transferred to their spouse after the death of one, then they should sign a joint tenancy It should be clearly written in the sale deed that these 2 are the joint tenants If by chance, it is not written clearly, Then by default, it is considered that it is Tenancy in Common, which is the 2nd term Tenancy In Common means if one co-owner dies The legal heirs will get the share For example, if the husband dies, the legal heirs are the parents, kids, and wife So if he wanted the whole property to get transferred to his wife, in this case, the wife will get very less share 50% of the wife’s share will remain with her But the rest of the share will be divided among the legal heirs So I am not saying that the husband and wife should definitely sign a joint tenancy But if you want, write clearly in the sale deed I hope you got the difference between these 2 terms which is a very important difference In fact, I would like to close the video here We discussed all the important points and we also discussed the benefits and we also discussed about the challenges you can face If you liked this video then do like and share it with your friends and family members So that they also get to know about these important points and if they are also planning for a joint property in future, they’ll get benefit out of this If you have any suggestions related to this video or channel, you can comment down below If you haven’t subscribed to this channel yet then subscribe to it and press the bell icon so that you get the notification of the latest video So we’ll meet in another similar informative video Till then keep learning, keep earning, and stay happy as always.
