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Why you Should Opt for Co-Owned Properties?


With the searing rise in property prices, buying an apartment unit or house by a middle-class individual by himself/herself is almost impossible. It is a huge financial burden to bear by a single individual and thus the sector in general is evolving to other trends. One of those trends is the idea of having joint or co-ownership of a property. Instead of the conservative approach of owning properties individually, people are okay with considering joint ownership deals.

Co-ownership has a lot of upsides and downsides that need to be discussed. The purpose is to leave nothing behind and help a reader to absorb a brief knowledge about the same. Experts advise that co-ownership has a lot of benefits if the owners are all equally responsible and financially able to come into a mutual agreement.

Eligibility to co-own a property:

By the country’s laws, the eligibility is quite simple to understand. Anyone can be a co-owner of a property like parents, siblings, children and spouse are eligible. Besides, there are no rules that suggest that the partner involved in joint ownership should also be employed and financially able. To put in easier terms, the financial liability for owning the property is allowed to be handled by only one of the owners involved in joint ownership.

Pros of joint ownership:

Loan eligibility criteria get better:

The most amazing perk in joint ownership of a property is that it increases the convenience in loan eligibility. Whenever a prospective buyer applies for a home loan, the banks evaluate the applicant’s financial ability with the buyer’s net monthly income to calculate the grantable loan amount.

For example, Mr.Satish, wanted to buy one of the flats for sale in Pallavaram, Chennai, and his monthly income was close to INR 1 lakh, and the bank was ready to over only INR 50,000. The trouble was that he needed more than INR 50,000 to repay the loan on the specified timeframe. He smartly listed his sibling as a co-owner and with the addition of her financial ability; the bank was ready to grant the necessary loan amount. Like this, banks tend to favour co-owners as the chances of debts in repayment are cut down.

Flexibility in repayment of the loan:

Besides facilitating loan eligibility criteria, joint ownership also facilitates convenient repayment of loans if both the owners are financially able and involved in the process. Joint owners can plan among themselves on how to properly organize and repay the EMIs. This shared responsibility makes the whole process less burdening for both the people involved.

Benefit of deducting income tax:

With co-ownership, the persons involved can claim deduction in income tax on both principal and interest of the loan amount. Applicants of the loan have the eligibility to avail a deduction benefit of INR 1.5 lakhs and INR 2 lakhs on principal and interest respectively. All the joint applicants are eligible to avail this benefit if all of them are contributing to the EMIs. For instance, Mrs.Divya Devraj, with her spouse Mr.Devraj was able to avail this tax deduction after purchasing one of the flats for sale in Tambaram, Chennai on loan.

Easy transfer of property:

For transfer of property in case of demise of one of the property owners, the ownership of the property is easy to transfer to the others. This can be done without any need of legal investigations. All it requires is a new registration process in the names of the others involved in the co-ownership with the presence of a solicitor.

Cons of joint ownership:

There are few drawbacks in joint ownership of property and they need to be addressed too.

  • As there are more than one person involved in the process, home loans and other processes regarding the same takes a long time to be completed.
  • If all the co-owners decide to repay the loan and in case of defaults in payment, the credit history of all of them involved is at the risk of damage.
  • Feuds due to disagreements might arise when the owners involved become unstable in their individual financial responsibilities.

To draw a conclusion, it is obvious that the pros overthrow the cons quite easily and it is advisable to share a property title with proper mutual agreement and understanding.  
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