01 April, 2018 Financial & Technical
Buying a property is without any doubt one of the biggest financial decisions one ever takes, especially when we take into consideration, the significant rise in property values across India in recent years. This has forced customers to take into consider
In today’s age, buying a property is a lifetime event for the majority of the population in India and hence involves a lot of thinking and analyzing of various types of properties before coming to final selection. Most of the time a buyer commits all his time in analyzing the property options available in front of him and forgets to analyze many other equally important things that play out to be very curtailed, especially when monitory benefits are involved. Buying a property is without any doubt one of the biggest financial decisions one ever takes, especially when we take into consideration, the significant rise in property values across India in recent years. This has forced customers to take into consideration, every possible way to increase their financial affordability and maximize their savings through various central or state schemes. Most of these schemes ask joint-ownership of properties and hence it is becoming preferable of buyers to buy property in jointly.
When it comes to tax benefits, there are more than just one way to take advantage of the joint-ownership of property. As per section 80C, a deduction of Rs. 1,50,000 towards principal repayment can be claimed by the homeowner availing home loan. In case of co-ownership, since both the owners are co-borrowers, thus each owner becomes eligible for this claim.
Another benefit comes from section 24 (b), where a homeowner who has availed a loan can claim a maximum deduction of Rs. 2,00,000 towards interest on home loan. Since in case of co-ownership, both owners are co-borrowers in the home loan, both can avail this benefit, provided the total claim does not exceed the total interest paid for the loan.
Seeing the high price rise in real estate, affordability becomes a major concern for any home buyer. No one wants to compromise with space and quality of the property that is available and considering that financing through a bank or NBFC is the only option to purchase the desired home, it becomes very important to maximize one’s financial eligibility. The easiest way to do so is by becoming a co-borrower in the loan, which in case of joint-ownership automatically becomes inevitable. Joint-loans not only helps in sharing the financial burden but also increases financial eligibility of the applicants as in this case income of both the borrowers will be considered in underwriting the loan amount.
Various states have encouraged women ownership and co-ownership in properties by giving rebates in stamp duty charges that they charge at the time of property registration. For example, stamp duty charges in Delhi for men is 6% while that of women is 4% and joint-owners can still take benefit as stamp duty, in this case, is 5%, which still less than that of sole-ownership of man.
4. Central/State Schemes:
Schemes like Pradhan Mantri Awas Yojna (PMAY) are another great way to avail monitory benefits in home loans through joint-ownership of property. The Pradhan Mantri Awas Yojna (PMAY) scheme focuses on giving credit subsidy to eligible applicants where the customer can avail interest subsidy up to 2.6 lacs, provided certain conditions are fulfilled. First among such conditions is that either the property should be under sole-ownership of women of the family or at least under joint-ownership. Thus, customers are availing benefits under the PMAY scheme by taking joint-ownerships in properties. Such schemes are not only centrally driven but also through various states like Mukhya Mantri Awas Yojna in various states in India.