Benefits of Adding Spouse as a Co-owner When Buying a House
Buying a home is a common decision of a family. All most all home buyers take the home buying decision only when both the spouses are ready for the same. In countries like India, homes have much emotional value along with the financial value. When both the partners are accepting the home buying decision wholeheartedly, the value of the property enhances as it gets an emotional attachment.
When your spouse stands by you in the decision of home buying, it doesn’t only increase the emotional value of the home. Meanwhile, it gives you many other benefits in the financial aspect too. Adding your spouse as the co-owner of the home gives your partner an opportunity to enjoy the feeling of ownership while making you getting additional benefits too.
Benefits Adding Your Spouse to the Ownership of the Property
A Comparatively Low Stamp Duty Charge
If a female is the co-owner of a property, one can get a relaxation in stamp duty charges. Stamp duty charges are one of the significant additional expenses which a home buyer has to bear while purchasing the home. To encourage more and more females of the society to own a property, the state governments give a relaxation of 1% to 2% in stamp duty charges. The stamp duty charge of a property depends on the market value of the property. The charges that a home buyer needs to pay to the Government in the name of stamp duty charges is a certain percentage of the property value. The charges may differ from state to state. If your property is of a high value, the charges will be more. Adding your spouse to the ownership of the property will make you save a considerable amount in stamp duty charges.
Enhances the Loan Eligibility
The next benefit of adding a co-owner is that it enhances your loan eligibility. If you are buying a home with a home loan and your spouse is also working, you can avail a loan of a higher amount. The loan eligibility of a person depends on his/her net take-home income. When you join your spouse as a co-owner of the loan, both the spouses’ income will be taken into account. In this way, your loan eligibility will be increased and you can avail a higher loan as well a better home too.
The Tax Benefit for Both the Spouses
To encourage more and more home buying, the Indian Government provides a tax exemption on home buying. A home loan borrower can claim a tax deduction of Rs.1.50 lakh for principal repayment under Sec 80C and Rs. 2 lakhs for interest payment under Sec 24. If the property for which the loan is taken has more than one owner, both of them can claim tax benefit.
Under the income tax act 80C, each of the joint owners is allowed to avail a tax benefit of Rs. 1,50,000 for principal repayment. The tax deduction of principal repayment is not the only benefit that can be claimed. Both the property owners can apply for deduction of housing loan interest, up to Rs 2,00,000 each.
Lowers the Interest Rate
Almost all the home loan providers in the country give an interest rate relaxation on home loans. The minimum relaxation one can get in interest rate by adding the female partner is of 0.5%. It may look very small number here but the difference it can make in your total loan payable is beyond one can imagine. When your loan amount is big and your tenure is long, the relaxation of 0.5% makes you save a handsome amount.
Ease of Accession
When a property is owned jointly, the succession of the property becomes hassle-free. It has been witnessed many a time that after the death of the owner of a property, transferring the property to their legal heir or the surviving spouse takes a cumbersome process. It needs a lot of paperwork along with a quite good amount of money. But if the ownership of the property is shared by the spouses, in the case of demise of any of them, the surviving one will have the entire ownership on the property.
The Feeling of Equality
The last but not the least advantage of adding your partner to the ownership of the property is the feeling of equality. Such are the emotional values and hence can never be overlooked. Making your spouse the co-owner of the property, makes them feel better. This will also provide the feeling of ownership of the property. Such feelings like equality, jointly owning the home sweetens the relationship of the spouses.
The Words of Caution
While there are many advantages of sharing the ownership of the home with your spouse, there are some drawbacks too. Human life is unpredictable and if it happens that the relationship sours, the joint property will be the scrape. In the worst case, if the partners get apart, it would become a lengthy as well as an expensive affair to settle the matter of joint home ownership.