The notion of joint ownership of property is picking up traction off late in the country with both the government and loan providers offering numerous incentives in a joint purchase of the property. The tax deductions applicable in availing a joint home loan are also making it an attractive bet for home seekers.
In this article, we will zero in on some important points for buyers to reap the maximum benefits of a joint property purchase-:
Home loan
It is important to understand that when applying for a home loan regarding a joint property both the buyers have to apply for the loan. Things tend to get a bit hazy as the loan is likely to be rejected if one of the owners fails to meet the benchmarks set by the bank to avail the loan, like a low CIBIL score. Also if the other owner falls into the category of a blood relative like mother and son, it is vital to go through the eligibility norms and procedures for availing a joint home loan.
Tax benefits
As per the norms of the income-tax act, a maximum tax deduction of INR 1.5 lakh on the principal amount and INR 2 lakh deduction on interest, is available for each of the owners in a joint property home loan. Also if a family is solely dependent on a single earning individual, then it is advisable to refrain from a joint property purchase and go with single ownership of the property.
Avoid a co-owner without a regular income
Bearing the burden of a home loan for a non-earning wife will prove to be a nightmare for her, in case you meet with any unforeseen circumstances. It can also attract a lot of legal implications for the spouse or any other non earning co-owner.
Home loan protection scheme
It is important to understand that while both the co-owners may avail the home loan protection plan, the insurance authority will only pay for the loan amount of the departed and not for the entire loan. Term insurance comes as a better option in this regard and should be availed according to the proportion of the ownership of the property.
While joint ownership of a property does include certain benefits, it is also a complex transaction with numerous hidden clauses. It is advisable for the buyers to go for a joint property purchase only after evaluating the monetary benefits in detail which they will fetch from the purchase.
In this article, we will zero in on some important points for buyers to reap the maximum benefits of a joint property purchase-:
Home loan
It is important to understand that when applying for a home loan regarding a joint property both the buyers have to apply for the loan. Things tend to get a bit hazy as the loan is likely to be rejected if one of the owners fails to meet the benchmarks set by the bank to avail the loan, like a low CIBIL score. Also if the other owner falls into the category of a blood relative like mother and son, it is vital to go through the eligibility norms and procedures for availing a joint home loan.
Tax benefits
As per the norms of the income-tax act, a maximum tax deduction of INR 1.5 lakh on the principal amount and INR 2 lakh deduction on interest, is available for each of the owners in a joint property home loan. Also if a family is solely dependent on a single earning individual, then it is advisable to refrain from a joint property purchase and go with single ownership of the property.
Avoid a co-owner without a regular income
Bearing the burden of a home loan for a non-earning wife will prove to be a nightmare for her, in case you meet with any unforeseen circumstances. It can also attract a lot of legal implications for the spouse or any other non earning co-owner.
Home loan protection scheme
It is important to understand that while both the co-owners may avail the home loan protection plan, the insurance authority will only pay for the loan amount of the departed and not for the entire loan. Term insurance comes as a better option in this regard and should be availed according to the proportion of the ownership of the property.
While joint ownership of a property does include certain benefits, it is also a complex transaction with numerous hidden clauses. It is advisable for the buyers to go for a joint property purchase only after evaluating the monetary benefits in detail which they will fetch from the purchase.
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