Joint Property Ownership & Joint Home Loan Tax Benefits in India - YouTube

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Namashkar, my name is Mukul and welcome to Asset Yogi

Friends, 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

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

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So we'll meet in another similar informative video

Till then keep learning, keep earning, and stay happy as always.