HOME LOANS | Advantages of Joint Ownership

There are many advantages of taking a home loan in joint name. There are tax benefits, joint benefits etc.
Tax benefit:
If the owned property is being used for living, the annual value of the said property is deemed to be nil. Moreover, you could claim a deduction for the interest paid on the home loan (for purchase or construction) up to Rs.1.5 lac, (subject to conditions). This would result in a loss under the head - house property of up to Rs.1.5 lac, which could be set off against other incomes.
If the property is let out, the actual amount of housing loan interest, without limit, could be claimed as deduction. Also, an individual can claim a deduction up to Rs.1,00,000 for re-payment of the principal amount u/s 80C of the Income Tax Act, 1961.
Joint benefits:
It is very advantageous to buy a property in joint name as each individual has the right to claim tax benefits. So if a property is owned by husband and wife together then both are entitles to claim deductions individually.
There is no rule as to the number of co-owners or who the co-owner is (brother, spouse or parents).
Following are the points to consider:
• The house should be bought in the joint name and care should be taken to keep the proof of co-ownership.
• The housing loan should be taken in joint names.
Repayment
The repayment of the loan should be done individually or from their joint bank account. The funds in the account should be contributed by the co-owners in proportion to their ownership/loan. Co-owners should have their independent sources of income from which the loans are re-paid.
Tax benefits are available in proportion to the joint ownership and the loan taken by the co-owners.
Additional benefits:
• If more than one person takes a home loan then income of all the co-owners will be considered by the lenders. This can help increase the size of the loan.
• In many states, a lower property registration fee is levied in case the property is owned by women either individually or jointly.
If husband and wife jointly own a property reduces the succession issues.
• Buying a house jointly facilitates a larger loan as income of all the co-owners would be considered by the lenders.