Finally, the Indian husband is willing to register a property not just in his name, but jointly with his wife. Wait, is this indicative of a massive change of heart in India men?
Nah – The trend of husband-wife jointly owning a property is becoming popular for one big reason – incentives ! The government is making it happen by offering lower stamp duty and registration charges for jointly owned property.
And we're saying, it makes absolute sense to own property jointly, with or without the incentives. For anyone who challenges us, just google research on the economic contribution of a home maker, let alone a wife who also brings in the moolah!
Convinced you? Now spare just 5 minutes of your time to go through these important points on buying property jointly.
1) Co-owners to co-borrowers- The bank will make sure that you don’t make solo trips to their branch. Yes, banking policies make it mandatory for co-owners to make joint-application for home loan. Banks do not disburse loan to single buyer in case of a co-owned property. But remember, the reverse is not necessarily true which essentially means that all co-applicants need not necessarily be co-owners.
2) Keep your credit history clean – Make sure your financially history doesn’t hit the dream of owning a property together. Both yours and your spouse’s CIBIL or credit score should be in the desirable bracket or the banks can reject your application. Which means, no bunking on credit card payments! Needless to say that both of you should have a PAN number to transact.
3) Double tax benefit- This is a big one. Income tax deduction of Rs 1.5 lakh for principal u/s 80C and Rs 2 lakh for interest component u/s 24(B) is available to EACH of you. Contrary to the popular belief, the exemption is not in proportion to amount contributed towards the purchase. But remember this benefit will come only if you are co-borrowers along with co-owners.
4) 50:50- Unless explicitly mentioned in the agreement, both the co-owners are deemed to have the equal share in the property. This is because it is the easiest assumption to make. And we recommend that you keep it that way.
5) Transfer is easy- Co-owning a property for married couples also ensures hassle-free transfer of rights because if one of the partners dies, the surviving spouse automatically becomes the sole owner of the house. Unless, your WILL says otherwise.
6) Insure your risks- Make sure you buy a term insurance equivalent to the sum of the loan. This will slash the risk of entire burden of loan repayment falling on just one partner in case of death of either husband or wife. This becomes even more important in case the co-owner does not earn.
7) Gift the share- It is not important that initial transaction has to be in the joint-name. You can make your spouse a co-owner in the property at a later stage too. All you need to do is create a Gift Deed. This document needs to be executed on a stamp paper and registered at the registrar’s office.
8) Separation- In case you file for a divorce, the jointly owned property will go in equal proportion to the parting couple. The likely scenario that only the husband or wife paid for the entire property may not make in any difference to the court at the time of dividing assets between the estranged husband and wife.