Renita and her husband have been dreaming of buying their dream home for years. They have been looking for the perfect property where they can raise their family, a place they will be able to call home. After months and months of deliberation, they finally find a property they both love and decide to show it to their Uncle who is a financial adviser. While they were debating under whose name they should buy the property, he explains them that they should opt to jointly own the property, as this is a financially prudent decision and has many tax and other financial benefits in the long run. Here, it is also important to remember that while Renita and her husband are married, a property can be held jointly with anyone, not just a spouse. Here are the benefits of jointly owning a property.
1. It is easier to obtain a home loan
One of the biggest advantages of buying a property together is being eligible for a joint-loan. Loan eligibility is directly linked to your income and in case of joint registration; partners or spouses can opt for a joint home loan, which paves the way for a higher loan amount. This is because the burden of the home loan will be shared between two people, making it less risky. Here it is important to remember that while all co-owners of a property need to be co-applicants of a loan; not all co-applicants of a loan need to be co-owners of a property. Banks and lending institutions take the incomes of all co-applicants into consideration when deciding what amount of loan to be sanctioned as well as the borrowing tenure. Having a significantly higher income can help you get more attractive rates of interest or a higher tenure, making it more affordable to finance your dream home.
2. Self-occupied house property loss benefit for each owner
As per the Income Tax Act 1961, it is possible to claim a deduction on the interest you are paying on a housing loan in case of the property in self-occupied for up to Rs. 2 lakh per financial year. However, in case this property it is jointly held, because of which both the property owners can claim a deduction for interest up to Rs 2 lakh each financial year. You can forget all your worries about financing your new home thanks to home loan on Finserv MARKETS. Avail best deals on hassle-free home loans minus all the tedious paperwork and choose from a loan payment tenure convenient for you, which can go up to 300 months.
3. Benefit of investment
Individuals can claim a deduction of up to Rs. 50 lakh on the capital gains from the sale of a house as per section 54EC of the Income Tax Act. However, given the massive real estate prices in India, this deduction is usually not sufficient to cover capital gains, hence, individuals have to pay tax on any gains upwards of Rs. 50 lakh. In the case of a jointly owned property, both owners can file for a deduction of Rs. 50 lakh each.
Given such benefits of jointly owning a property, you should be like Renita and her husband and opt to buy a property together. What’s more, is that you can take advantage of the attractive Bajaj Finserv home loan interest rates on Finserv MARKETS and enjoy 100% transparency in all the terms and get the freedom to choose your own repayment tenure.
Also, read about home loan process.
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