A joint property is the one which is owned by more than one person at the same time and is in the name of both of them. In times when the property prices in the market never seem to decrease, co-ownerships are considered by many people as they are a way of sharing expenses, increasing affordability and dividing responsibilities as far as buying and maintaining a house is concerned.
The two owners can be husband and wife, parent and progeny, siblings or business partners.
Whoever it may be, acquiring a property with someone else can imply a bittersweet variety of things as follows:
Both the co-owners have equal rights on the property. Theseinclude:
– The right to possession of the asset and of its use
– The right to dispose their undivided share as long as it is clearly stated in the deed and acknowledged by the other partner.
Even in case of a split up, the co-owners continue to have the same amount of rights and it is important to keep the following in mind:
– Both the owners can stay in the family home as long as they want.
– Both have rights to return to the joint property after moving out.
– They can’t make their co-owner leave by any means neither decide to change the locks independently of the other person.
– The property can’t be sold unless there is a mutual consent neither. A mortgage or loan can be raised only against their own share of the house.
Coming to one of the most advantageous consequences, jointly owning a property has more than one financial benefit:
– The co-owners can apply for a joint home loan. This not only divides the burden but also makes the property buyers eligible for a higher loan amount as the income of both of them is considered.
– A tax deduction of up to 1,50,000 Rs under section 24 for interest payment and 1,00,000 Rs under section 80c for principal repayment can be claimed by both the owners individually. However, this makes it a wise decision to opt for a single ownership and home loan application if only one of the members is earning.
Not to forget, while in the case of a single ownership the transfer of property in case of demise can be a lengthy process, having a joint ownership makes it a hassle-free one because the property along with all the rights automatically passes on to the co-owner.
To sum it up, jointly buying a property is cost saving, provides an easy loan eligibility and has tax benefits but one shouldn’t forget that a single ownership is always likely to be bought because it conveys an easy approach, negotiation, agreements and legal proceedings during and after the purchase. It also avoids many of the legal issues that may arise with time, especially if there isn’t a strong faith between the partners, which in this case too, is the most essential requirement.