05 MAY, 2021

Modern-day homebuyers are financially cognizant, and they look for every possibility that can make property purchase a lucrative deal. Consequently, joint-ownership of a property has become increasingly popular these days. Married couples who wish to purchase a new house can reap numerous financial benefits by opting for joint-ownership. Some of the major advantages of jointly owning a property are mentioned below:

Benefits of Jointly Owning a Property

Enhanced Home Loan Eligibility

In case of joint-ownership, the co-owners can opt for a joint home loan. Lenders determine the home loan eligibility based on the borrower’s income and repayment capacity. Therefore, by adding your spouse as a co-applicant in home loan, you can boost your home loan eligibility. This will help you avail a higher loan amount for purchasing the property. Moreover, the debt burden will also be shared in case of a joint home loan, and this can make repayment comparatively easier.

Low Stamp Duty

Another benefit of jointly owning a property with your spouse is that you will have to pay a low percentage of stamp duty during the registration of the property. Women are generally required to pay lesser stamp duty as compared to men. For example, the stamp duty in Delhi is 6% for men and 4% for women. Similarly, in Uttarakhand it is 5% for men and 3.5% for women. Many other states like Odisha, Punjab, Rajasthan and Bihar have concessional rates on stamp duty for women. Therefore, by adding your wife’s name as the first owner of the property, you can save on stamp duty.

Tax Benefits

As per the 80C Section of the Income Tax Act, 1961, home loan borrowers can avail a deduction of up to Rs 1.5 lakhs towards the principal amount repayment. Moreover, under Section 24(b) of the Income Tax Act, 1961, a deduction of up to Rs 2 lakh is allowed towards the interest pay-out. A joint home loan will allow the spouses to claim this tax deduction separately as per their ownership share, thereby enabling a significant tax saving.

Succession of the Property

In case of single ownership, succession of the property after the demise of the owner can be a tedious and time-consuming process. On the other hand, in case of joint-ownership of the property with your spouse, the property can be easily transferred. By default, the surviving member/co-owner becomes the owner of the property.

Due to the above-mentioned benefits of joint-ownership, many people are considering it as an option while purchasing a property. In case you avail a loan for home financing, make sure to read and understand all the terms and conditions of the loan agreement carefully. Also, do not forget to make a note of the prepayment clause and charges. Since, both you and your spouse will be repaying the loan amount, the repayment capacity will be much higher. Therefore, you can consider prepaying the home loan to clear the debt sooner.

With us at Kotak Mahindra Bank, you can easily avail a joint home loan at a competitive interest rate and minimal prepayment charges. Flexible repayment tenure, easy application process, minimal documentation, instant loan approval, and quick disbursal are some of the major benefits of availing a home loan with Kotak Mahindra Bank. So why wait? Take a joint home loan with your spouse and purchase your dream house, today.

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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.