Dev Singhraha
Relocation Expert
India is now witnessing several joint ownership of properties for many reasons. However, did you know that joint ownership differs from the joint home loan? One who is a co-owner may not be a co-borrower.
 
Know about some common myths about co-ownership and co-borrowing
Most of the lenders insist the home loan borrowers go for joint home loan to cover the risk of non-payment for the properties which are not owned jointly. This is because the repayment of the loan amount will be liable on both the applicants. So, if you do not pay the amount on time, then your spouse will be chased to the repayment for instance. 

Know about the tax benefits applicable to co-owners

If you are a co-owner and you are willing to avail tax benefits, then you must also be a co-borrower or co-applicant of the home loan to enjoy the benefit. Besides, you must understand that the tax benefits vary for the property which is self-occupied than that of a rented one. In case of self-occupied property, co-applicants are eligible to avail tax benefits for the repayment of the principal amount under the Section 80C of the Income Tax Act and for the payment of home loan interest under the Section 24, which has a cap up to an amount of INR 2 lakh. If the property has been rented out, then the entire interest that is paid is allowed as a tax deduction from your income. 

Know about the insurance

If you are a co-owner of a property, then you should opt to avail term insurance for the portion that your owner and the rest can be insured by the other co-applicant(s). There is a clause that all the content-owners must be earning. Moreover, it is not a great idea to avail home loan protection plan because in case of the incident only the portion that the deceased had ownership will be cleared by the insurance provider. 

Know the legalities

Wife becomes the owner of half of the property automatically after marriage as per the Marriage Laws (Amendment) Bill, 2010, providing financial security to wives. This means that going for another agreement is redundant anyway.
Besides, some legal implications are there in case you decide to purchase a property with your blood relatives, apart from spouse. Buying a property with mother, father or any siblings is not advisable. This is because if there is any family dispute, legal heirs can have a say claiming their stake in the property. For example, if two brothers buy a property with the mother, then their kids, as well as siblings, will have a stake.
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