Buying a house on Loan has been the preferred option for middle class consumers. With increase in disposable income, affordability of EMI repayment have increased. The tax benefit available with this option also makes it a very attractive proposition.
The benefit almost gets doubled when you opt for a joint loan with any of your family members, especially spouse. The decrease in tax liability makes it easier for both couples to comfortably manage their finances while repaying their EMIs.
Who Can Take a Joint Loan?
A joint home loan can be taken by any of the blood relatives. A husband and spouse or a child with parents are most eligible relationship. Friends, sisters or unmarried couples can be a co-owner of a property but they cannot be a co-borrower in a housing loan. Siblings can take joint home loans but lenders give priorities to husband and wife and parents-children relationship. Also, most lenders avoid giving loans to brothers due to high probability of disputes. Although, it’s not necessary that all co-borrowers should have a share of ownership in property, lenders insist that co-owners should take a joint loan. If it’s a case of husband –wife then co-ownership is not mandatory. But in case of parents-children or siblings availing the joint loan, co-ownership in property is compulsory. A maximum of 6 members can take a joint home loan.
Loan Terms
The joint loan process is very similar to home loan given to any individual. Since a home loan is based on the income of borrower, the lenders decides the eligibility after reviewing the repayment capacity of both the borrowers. In all probabilities the person with higher income gets the bigger share of the loan. The tenure of the loan coincides with the age of highest member. If parents as co-borrower are retiring in say 10 years then joint loan term will be restricted to 10 years. The maximum term in joint home loan is 20 years with most lenders. If parents are retired, then their pension income is considered for loan purpose.
The Tax Benefit
All the co-borrowers in a joint home loan can avail the income tax benefit under section 80C and Sec 24 in proportion of their loan.The principal repayment can be claimed for a deduction of Rs 1 lakh and interest repayment up to Rs 1.5 lakh individually. Thus, total benefit of Rs 2 lakh for principal repayment and Rs 3 lakh for interest repayment, can be claimed jointly. Contrary to this if an individual buy the same amount of loan, he can claim only up to Rs 1 lakh and Rs 1.5 lakh for tax deduction.Thus, the benefits in absolute terms are higher than an individual availing the entire loan.
Terms for Availing Tax Deductions
There are some preconditions which borrowers have to fulfill to avail the deduction in a joint loan. Firstly, the all the borrowers should be the co-owners in the property. As per income tax act the benefit on home loan is given only when it is owned by the assesse. If any of the borrower is not a co-owner but avail the home loan, he will not be eligible for claiming the tax deduction. The proportion of the deduction relates directly to the joint loan ratio. So if the property ownership is 50% but the loan is in ratio of 2:1, then the tax deduction can be availed in the same ratio only.
Documentation Required
A joint home loan surely gives you maximum benefits, but there is a need of proper documentation to avoid any hazzles while claiming in our IT returns. The ownership of property should be clearly laid down in the agreement and loan proportion should be written down in a stamp paper. It’s wise to get these documents registered. All the borrowers have to provide a declaration of availing/not availing the tax benefit. With these documents all the borrowers can file their returns and claim for tax deduction. If any of the borrower misses out on claiming the tax deduction, other can claim for refund.
How to Repay EMI ?
No housing finance company or banks allow housing loan repayment through two cheques or through two accounts. You cannot transfer cash or cheque also to another account and claim the benefits. A wiser approach is to opt for repayment from a joint account or the no of installment can be divided between the two borrowers. This will ensure that both the borrowers become eligible for tax benefit. Also make sure to have your EMI ratio in the proportion of your tax liability.
Some Points to Ponder
1. Keep your EMI up to 30% of net income
2. Clear titles on property before you go for purchasing
3. Ensure stability of your career
4. If possible, keep your down payment up to 10-20% of loan amount
5. Maintain a good credit record
6. If buying a resale property, ensure the ownership
Have you availed for a Joint Loan?
Share your story….
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Me and my sister wish to purchase a house.
She is already married for 6 years now. Both of us are salaried.
Is there any legal obligation stating two sisters cannot be co-applicants for the loan? I have checked with certain banks and they are denying for lending loan to us.Could you please advice on this or suggest some bank that considers us for the loan.
Free Bird,
In a joint loan most banks have resistance towards siblings. The reason is higher probability of litigations. The preferred relationships are mother & child, father & child or brothers or sisters with parents etc.
It will be very difficult for you to avail a loan as sisters in such scenario when there has been pressure on banks to reduce defaults. Hence, if you have any other family member like father or mother which you can add in the property then banks may consider with ease.
i m working and my father is a pensioner. can we apply for joint home loan.?/
Hi Shashank,
Yes you can apply for joint home loan.The bank will consider your father pension income for evaluating his share in the loan.
I have availed a home loan from LIC as a co-owner and my wife is the Mail Applicant under BhagyaLakshmi Scheme. My Wife is non-working and the registeration of house is yet to be done next month. I would like o know, how can i become a Co-Borrower of that house and do at the time of registeration, I need to register the house in both the persons name? Please Advise
Hi Sanyam,
The primary condition for availing tax benefit from a home loan is that you need to be an owner or a co-owner in the property. However, the tax benefit is available in cases where the spouse is the sole owner of the property but provided this is not done just for the sake of availing tax relief.
You can become a co-owner in the property by registering it in the name of you and your spouse.
I plan to avail a home loan. I want to get it in my mothers name and her to be the owner. But I will repay the EMI – I am a co-borrower. In this case, can i claim tax benefit?
The property is to be registered in mothers name…but I will pay the EMI. Please suggest
Hi Krishna,
Home loan tax benefit can only be availed if you are a co-owner in the property. If you are only co-borrower in home loan but do not have any share in the property, you will not be able to avail the tax benefit.
We have taken home loan from LICHFL. Property is under construction, e.t.a June 2014. Wife and I are co-borrowers and will register as co-owners as well , with Wife being the Primary in both occasions. Curently pre-EMI going out of a Jt Account as a single EMI. Income ratio Wife:Mine=1:5
Both of us would need to avail tax benefits.However, we have not called out any proportion share in the loan agreement.
Question :
a) Is calling out of the proportion share in loan mandatory for availing tax benefits ? If yes then how should we be doing it now ?
b) Should the shares in loan be in sync with the income ratio.Wife will claim benefits for Sections 80C & 24 and me for 24 only (as my 80C is already full)
Thanks!
Hi,
The benefit on home loan deduction in case of Joint Loan is as per the loan proportion. It would have been beneficial if the proportion would have been defined in the agreement. Else you will have to consider it in the income proportion only because the eligibility and the amount of home loan one can avail rest on the income. So of the income ratio is 1:5, the home loan you have availed will also be in the same ratio as per the eligibility.
Since the EMI is going from a joint account you won’t have problem in claiming the tax benefit.
Still take the help of a CA to confirm this before you file your ITR.
Hi,
Me and one of my close friend want to go for housing loan together. We are planning for a joint construction. Is it possible to get the housing loan based on both the income?
Regards,
Aravind
Hi Aravind,
Banks generally give joint loan in relations i.e. father-son, husband-wife but avoid giving to brother-sister or friends considering that there is a high probability of litigations in these relationships. So you may face difficulties in getting a joint home loan with your friend.
Can I buy a property including name of my father mother and wife? Both my parents are pension holder. I dont want to consider there pension income for my home loan eligibility. Will take home loan within my eligibility. Will there be any problem during mortgaging the property because of there age are over 60?
Hi Ronit,
Including your family name along with your parents in property ownership will not pose a problem in availing a housing loan for you.
But it’s important is that you should have an ownership in the property to avail the tax benefit from the loan.
Sir we took home loan in LIC under same scheme on mine and my wife name and registered on both of us names but whole repaymnet was done by me only and now my wife is also working can she also claim for tax benefit
Hi Ravi,
In a home loan repayment, the tax benefit can be availed in the proportion of the loan. However, the repayment has to be made from one’s account, then only you become eligible for tax benefit. If it was entirely from your individual account then your spouse will not be able to avail the tax benefit. Even a transfer from her account to your account will not be considered. Its wiser to repay the EMI from a joint account then you both will be able to claim the tax benefit .
I have purchased a house jointly with my wife. We have taken a loan form the bank which also in our joint names. EMIs are being paid from our joint account to which we transfer money from our other accounts in the ratio 60:40. Since our employer requires a certificate for TDS, we approached the bank for a provisional certificate. The bank has given a certificate about the total amount paid by us in our joint names. Now, how can we show that we have been paying the EMI in 60:40 ratio in order that both of us can claim exemptions of Rs.1.5 lac each?
Hi Ravi,
In addition to my previous comment:
You can divide the EMI repayment in a year on basis of the ratio and pay respectively from your individual account. So if it comes to repaying 12 installments in ratio of 5:7 you can give PDCs accordingly. But this is difficult to implement in ECS mandate. In that case have a sharing arrangement clearly written on a stamp paper would be beneficial. It should mention details of proportion of property ownership and loan.
Sachendra,
One of the better ways for availing tax benefit on your housing loans taken as jointly is to enter into arrangement on a stamp paper which clearly mentions the details of house ownership and loan availed. Along with this you both then attach copy of EMI Repayment to avail the necessary deduction.
Sir, I am a retd. Bank Executive and my wife is a retd. teacher. Both of us are getting pension from our employers. We want to avail a Home loan in the name of our grand daughter who is a minor. Besides our pension we get interest from our bank deposits and rent from our house property. Therefore repayment of loan instalment and interest is not a problem for us. Since our grand daughter is a minor both of us are prepared to be joint borrowers. Pl. advise the names of Banks which can provide us with a loan for the above purpose. We may be requiring the loan for a maximum period of 3 yrs. only. By that time our F.Ds will mature for payment and from the proceeds of the same we can close the loan account.
Dear Mr. Rengaswami,
Home loans are long term repayment loans. Due to this reason banks generally don’t give these loans to individuals at higher age i.e. 60 plus. Also the minimum repayment period for such loans is higher, approx 5 years. Although you have a sustainable income in the form of pension, still you will face difficulty in availing a housing loan at this stage.
Mr. Solanki,
I was working earlier and as an investment purchased a house with a housing loan. I later stopped working and my husband is paying the EMIs for more than a year now. But he is not able to avail the tax benefit. The property and loan are in my name. We are now adding his name as a co-borrower and paying the loan fro a joint account.
Can he avail the tax benefit now? If not, how can I add his name as a co-owner when the papers are with the bank?
Thanks
Sarita,
It will be difficult for your husband to claim the tax benefit if property is not in his name. A primary rule for claiming any tax exemption from property is that you need to own or co-own the asset. Banks generally allows adding co-owner in properties on case to case basis. You should discuss your situation with your bank. But you will incur charges such as stamp duty for this transfer. Even bank may charge you a processing fees. Another option which you can avail is gifting a share in the property to your husband. This can be done through a gift deed which need to be registered since its an immovable property. Although there will be no tax implication since transferring to spouse, stamp duty will still to be paid. Rest, in my view, you should consult a tax expert or a lawyer for your situation.
Thanks for your prompt response.
Is the original sale deed required to process the gift deed? My sale deed is with the bank.
I just spoke to the LICHFL person who says that if I issue a gift deed, it will become mortgage loan and tax exemption will not be there then.
Kindly advice, there is utter confusion and tension.
Thanks again.
To gift immovable property, you just have to draft the document on a stamp paper, have it attested by two witnesses and register it. At the time of registration you will require A copy of the gift deed, title deeds of the property, encumbrance certificate, statement of particulars of the property, its market value and the extract of assessment register of the property. You can get copy of your property title from the bank and seek help of lawyer for preparing these documents.
I think you should seek the help of a good CA. These are critical issues and only a tax expert can answer very clearly. Gift deed is an option to transfer property where it does not involve any tax implication during transfer. With respect to housing loan benefits, one will have to go through the income tax clarification on its treatment. What I listed was two options of making your spouse a co-owner. Which one will suit your situation depends on the income tax treatment of the loan.A good tax expert will be able to guide you more efficiently.
Dear Sir,
I wish to purchase a home in which i also plan to take home loan. But as far my salary, i am falling short of some amount (Appox 5-7 lacs). My father is a pensioner. Can his income clubbed for taking the home loan. Also, does he need to be property owner before his income is being clubbed.
Please guide,
Regards
Nitesh,
Yes, his income can be clubbed with your income for the housing loan. But bank will offer you the loan only if his share is not very substantial as he is at a higher age. Also, For borrowing a loan it is not necessary that you have an ownership and bank will give you the the loan taking your father income into consideration. However, he will not be able to avail any tax benefit for the EMI repayment as he will not have any ownership in the property. You all also claim tax benefit in the proportion of your share of loan.
Thanks for the prompt reply. As i told in my last post…i am short of 5-7 lacs..which i want to understand if my father’s pension can help me to bridge the gap. As far the repayment is concerned, i will be the one who will make the complete repayment, so tax benefit is not a problem. I just want to get your view on the following :
My monthly gross is 68k and my father gets a pension of appox 15k…what is the maximum loan i can get ? i would like to keep the 100% ownership in my name.
Nitesh,
After spat of changes by RBI, bank now generally gives 75-80% of the value of house as loan. The income and other loans is an important consideration by the bank to check the repayment limit. In your situation i don’t see any difficulting in availing the loan as your income is higher. Your father income will be considered by the bank for the total loan eligibility. About loan limit, in my view banks consider up to 35-40% of your income (You and Your Father) as EMI repayment.This will reduce to the extent of any existing EMI you are repaying. But the actual eligibility you will get by enquiring from the institution itself.
Hello sir,
This is sashi working for a bank(public sector). My mother state govt pensioner.
I want to take joint home loan of amount Rs. 600000 only. Loan tenure should not be more than 5years.
My gross 16k. For emi I am eligible to pay only 6k.
My mother pension 31k. 59 years.
She will be co borrower. We won’t bother much abt tax benefits at this present condition. But the loan tenure should not be more than 5years. My mother pension in another bank. I can’t join her to my salary account. But for 6lakhs,5years tenure, emi is 12807. Now what can I Do? If I increase the tenure from 5years to 15 years, and then after 6k salary deduction, can I pay 7 more 1000 every month? Then will the emi keep decreasing or wht? Please give me ur valuable suggestion?
HI …for purchase of new house me and my brother jointly want to take a housing loan.My net salary is 35k per month and my brother getting 15k/month. another option is my father is a pensioner and getting 15k/month…what i want to know from u is…alone with 35k per month i m getting a loan of 25lacs but we want loan of 30lacs.,by joint home loan can i enhance my loan amount and which is better i mean between me and my brothers or me and my father. and how tax benefits can be claimed between me and my brother
Sashi8448,
In a home loan, your EMI will remain the same for the tenure although the its component of interest ad principal will keep varying as you repay. Any additional amount you want to pay will be treated as part prepayment in the loan. The only change in EMI happens when there are general changes in interest rate scenario but this change in EMI is effected for the tenure.
If the same amount you avail for higher period then EMI will be less. In any scenario you should not overburdened yourself with high EMI repayment. Keep it within 30 % of your take home income.
In my view you should increase your tenure beyond 5 years and have lower EMI so that your saving is not affected. Plan for part prepayment at periodic intervals. You can start saving for it additionally and as the corpus is accumulated prepay the loan. This way you will be able to manage your Housing Loan. But do not forget to insure your liability and maintaining an emergency fund.
Srinivas,
Banks are generally reluctant to give joint loans to brothers or sisters since probability f disputes are higher there. So you might face difficulty in availing joint loan with your brother.With your father you will be able to avail joint home loan.
The tax benefit is claimed in the proportion of your loan. You should document this bifurcation clearly in writing so that you do not face any problem while claiming the same. The second issue is of EMI repayment where you will have to see how you repay it since banks will accept only one cheque. The ideal solution would be to have a joint bank account and repay from it. The document will make it easier for bifurcation of this EMI for tax benefit.
Third is that whoever wants to claim for tax benefit need to have some ownership in the property- Fully or partially.
Rest, you should confirm from the banks for which relation they will prefer in issuing a housing loan.
Thank u so much fr ur reply immediatley …and i have one more doubt..that since my father is receiving pension as he’s a govt employeee and attained an age of 60 is there any restriction on tenure of the loan if i want to have my tenure as 20 years…
Srinivas,
Banks do have restriction for age of availing the loan. At higher age banks are reluctant to give long tenure loans. But if you are the major borrower and your father income is added as a supplement bank will consider it. So in my view you should be able to avail it. However, the exact loan amount and any resistance on approval may vary with banks considering PSUs and Private. You will get a clear picture from the bank.
Srinivas,
Banks do have restriction on age for availing the loan. At higher age banks are reluctant to give long tenure loans. But if you are the major borrower and your father income is added as a supplement bank will consider it. So in my view you should be able to avail it. However, the exact loan amount and any resistance on tenure/approval may vary with banks considering PSUs and Private.
sir
me and my husband have palnned to take a house.He has taken loan of 15lc in his name with me as a co-app.We want to get it registered in my name.which is beneficial in both of us names(my husband) or in my name only.The rest of the amount is financed by my father.
Plz reply
Priyanka,
If the tax benefit is to be availed by your husband on the housing loan then he need to have an ownership (Full or Partly) in the property. To avoid any dissatisfaction later, its advisable that you buy property with both as co-owners.
Dear Sir,
My father is going to take home loan of 15 lacs alone but as his service is only 4 years remaining so bank did not permit him for 15 lacs. I am working in a MNC with approx with 50 K in hand salary per month, so bank suggested my father to take a joint loan with me …..now i have few doubts which i want to clarify
1- As the property/land is in the name of my father only (i am not co-owner) will i be able to get any tax benefit ?
2- Can i avail any other home loan in near future with this loan in which i will be co-borrower with my father or first this loan need to be repayment fully?
3- will the EMI will be paid by me only after my father will retired after 4 years or from his pensions and my salary both.
awaiting for your quick resopose
regards
Bajrangi prasad
Bajrangi,
1. You cannot avail tax benefit if you are not a co-owner/owner in the property, as per income tax rule.
2. There is no restriction on availing further loans in future if your credit payment record is clean. However any financial institution where you apply will asses your loan eligibility on basis of your repayment capacity after factoring in existing loan. Then only the quantum of loan you can avail will be decided.
3. The EMI repayment, when your father retire, can be done jointly if your father seek any tax benefit from it. For bank what matters is the EMI repayment and that too with no breakup i..e bank do not accept two cheques for an EMI. So you will have to restructure it according to your financial situation. Bank will accept if the entire repayment is coming from your savings account.
Hello Sir,
Me and My Wife are the Co-Owners of a property and we’re also the co-borrowers of the home loan (SBI), but my wife is a home maker and the full EMI is only paid by me from single account (HDFC).
Can I claim full tax benefits for total amount repaid (prin + int) ?
Should there be any declaration from my wife stating that she is not repaying the loan?, if yes then which forms should be used?
Kumar,
In my view, if you are a co-owner in the property and paying the complete EMI then you should be able to claim the entire exemption. Yes, your wife can give a simple declaration that she is not availing any tax benefit from the loan. There is no specific form for this.
Kumar,
I missed on a point where you said your spouse is a home maker. How she became a co-borrower without having any income? Was she earning at the time of availing a loan?
Hello,
I and my fiancé are looking forward to buy a property. Probably the registrationAgreement of sale of the property would be done in my would be Maiden name and before we loan processing we might get the marriage certificate. After getting the joint bank home loan and getting the possession of the property can I avail the tax benefit for both of us. My main concern is the name of my fiance while Registration and Bank aspect. Please let me know your opinion and i there is any issue as such.
Indranil,
The tax benefit on housing loan can be availed in the proportion of the loan. So if you and your fiancee has availed loan in the ratio of 50:50, you will be able to avail tax benefit only on your share. The second aspect of it is that to avail the tax benefit you should be an owner or a co-owner in the property. If the property is in either name then the second person will not be eligible to claim the tax benefit on loan.
Hi,
I have taken the home loan from LICHFL as co-applicant with my wife and I’m not the co-owner of the property, my wife owns the property. My wife is not working now and I’m the only person repaying the loan. Is it possible to claim tax exempt since my wife is not earning now (or) is it possible to register the property in my name now? Please advice.
Regards,
Murali
Murali,
Without co-ownership in property you cannot claim tax benefit on housing loan. In my view one of the wiser ways is through a gift deed. Your wife can gift a share in the property to you through a gift deed which you can register at sub-registrar office. Then you can get name change from municipal authorities which be valid proof for your co-ownership. However, avail assistance from a CA before you take any decision.
I am planning to register a property on my father name, but loan is on my name. Bank people is saying I need to get declaration from my Bro saying he will not have any claim on that. Can I get the declaration format.
Thanks in advance.
Amy,
If your brother is willing to relinquish his rights in the property for you then a relinquish deed need to be made and registered. A simple declaration will not be enough since its a legal issue.
Below is the format of the same:
http://www.jitendrapssolanki.com/wp-content/uploads/2014/06/relinquishment-deed.doc
You can seek the help of a lawyer to modify it as per your situation and get it registered.
Hello,
I have taken home loan on my name as applicant. I did not add my wife name as co-applicant since I was able to get full eligibility. My wife is now working and I would like to add her as co-borrower. My house is NOT yet registered. The registration would happen in April 2015. The Home loan is with SBI. Please advice.
Sunil,
In my view its difficult to add co-borrowers in a housing loan once you have availed it. I am not sure whether banks allow it for availing top up loan on your existing loan. You should get it clarified from the bank whether they will allow adding your spouse as co-borrower.
Secondly you will have to add your spouse as a co-owner in the property then only she will be able to claim the tax exemptions. If there is no ownership then you cannot claim tax exemption on housing loan. Even for this also you will have to speak to your bank since it is mortgaged.
Thanks.
The flat is under construction. The loan is taken for property under construction. The flat is not yet registered.
Sunil,
Once you have availed a loan then the rights gets mortgaged to the institution. The registration in most cases is merely a formality. Your agreement of buying the rights of the flats is considered and on basis of it your loan is approved. So in my view for any change in the property rights you will have to approach your lender.
Speak to your bank and find out what is their say on adding a co-borrower and a co-owner in the property.
Hello ,
I have taken a joint home loan with my husband for a under construction property. The property will be completed in september.
I have two questions?
1) Our builder says we can do the registration only after completion.
Is this correct ?
2) My husband wants to register in 2015 as we dont have enough money to register . what is our loss if we register later?
I missed one more question ..can we avail tax benefit of 2 lakhs each
means total of 4 lakhs as my bank (SBI )says only 2 lakh jointly can be claimed as tax benefit ? we both are co-ownerns and co-applicants.
Hi Sir,
I have purchased a site which is in my name and taken loan for construction. is it possible to make my house wife as co-owner of the house where rent earnings can be shown in her name and I can avail the tax exemption benefit for the home loan? please suggest me the options.
Thanks,
Raj
Sonam,
1. In my view, Registration of property will happen after the completion but you can get the sale agreement registered at any time during construction which will safeguard your interest.
2. If you register the property later it can appreciate by that time. In many cases builders demand the inflated price when you finally register it. The other downside is builders can sell it to anyone if you do not have any registered document since unregistered deeds are treated as invalid . So its wiser to get documents of your property registered ASAP.
However these are my views within my knowledge domain and it will be wiser to take the assistance of a lawyer for any legalities involved.
3.On taxation aspect you both can claim the tax benefit of housing loan respective share of your loan. So if loan repayment is Rs 4 lakh and both of you share it equally then both can claim Rs 2 lakh as deduction ( Its Rs 1.5 lakh. Additional Rs 50K will be available once budget get passed in both the parliament.)
Hi Sir,
Actually I have taken loan from SBI with My father as a Co borrower. So can i get 100% tax benifit for IT return. Or Can i claim 50% from it ?
Please suggest.
Jayesh,
You can avail tax benefit on your housing loan in the ratio of your borrowing. So if 60% of the loan is based on your income and rest 40% on your fathers income then you can claim 60% tax benefit.
Raj,
You can avail the complete tax benefit on your home loan but rent earnings are distributed equally among the owners. So Its not feasible to show earnings from rent completely on her name.
Are the earnings very substantial or is it increasing your tax liability to a huge extent?
Hi Sir,
I want to buy a flat in name of my father/mother (retired) but whole loan amount i would like to pay from my side, is their any loan option from SBI with any tax benefits.
Manoj,
If you don’t have any ownership in the flat you will not be able to claim any tax benefit. So along with your parents you also add your name in the property to claim the tax benefit on complete loan.
Hi Mr Solanki
I am an entrepreneur, i have a an exiting land loan which i want to convert to home loan together with my father as the co borrower. Can i opt for a loan takeover. How can my father avail home loan related tax benefits. He is an army pensioner, and working in a private company, age 67 years.
Thanks
Srinivas K
Dear Srinivas,
Will meet and discuss.
My mother is 74 years and i am 52 years of age I have Got a steady Income of 25000/- per month . Can i avail a SBI joint HOME LOAN
Hello Sir,
I would like to take a joint loan with co-borrower+co-owner as my wife, with a ratio of 80:20(wife), after few years if she is not going to work can I convert the loan to single (100%) and change the ratio . And also can I claim the complete Tax benefits going forward 100%?
Ajithkumarullal,
You may face difficulty in getting a joint loan considering your mother higher age.Banks are reluctant to include any person at such an age as a co-borrower. Still you can check with SBI for the probability.
Karthick,
Banks do not allow loan taken as a co-borrower to get converted into an individual loan. It may happen through refinancing with other bank but that’s also vary with banks. With regards to claiming 100% of loan repayment , in general it is not allowed as a co-borrower but am not sure if its possible in husband-wife case. This is one area where there is lot of confusion and only a tax expert can guide you.
Hi,
i want to buy my father’s property by taking home loan. When I contacted some banks they are not ready to give loan.
They are saying i have to take mortatge loan.Please suggest me in this
Thanks in advance….
Rohit.
Rohit,
What you are trying is not feasible. The reason – being a son you are the legal heir or one of the legal heirs of your fathers property. After his death you will inherit the share in this property.So effectively you will be owning share in this property without any need of financial transaction and so banks are reluctant to give you loan.
Can you elaborate why you want to purchase a property from your father when you will inherit it?
Hello sir,
I could grab a lot of information from your post and the following comments. Myself and my husband too have applied for LIC Housing Finance Loan and are registering a flat in our name. From the posts I could understand that
‘One of the better ways for availing tax benefit on your housing loans taken as jointly is to enter into arrangement on a stamp paper which clearly mentions the details of house ownership and loan availed. ‘
Can you please guide me how to do it? what should be the value of the stamp paper? Where to get it done?
Thanks in advance for your reply!
regards,
Radhika
Radhika,
You can have this arrangement on a Rs 100 stamp paper which contain the share of the ownership along with that of the home loan availed by you both.You can get it notarized from the court much similar to a rent agreement which is well accepted.
Hi Sir,
I have taken a home loan from LICHFL in 2009 where i was main applicant & father was co-applicant and while registration i got the property registerd on my name and my father name. I have been repaying the loan entirly. Last month my father asked me to get the property transfered to my name but original documents required for registration are with LICHFL. is there a way i can get the property transfered to my name & continuing the EMI.
Babbi,
Transferring ownership of property to other by a co-owner is very well allowed and can be done in two ways i.e. through relinquishment or gift deed. Both of these are legal document and so need to be registered with help of a lawyer. Since it is a transfer of right you will have to pay stamp duty on it. For original documents you will have to speak to your lending institution and update with them the situation. I don’t think they will have any objection on you getting the entire ownership.
Still take assistance of a lawyer to know the exact process.
Hi,
Me and my husband is planning to buy a residential plot. We are going to take a joint composite loan. My brother-in-law also wants to contribute in purchasing the same (but he is not eligible for taking home loan) & also wants to register his & his wife’s name as the property co-owner. My questions are: I) During the time of the registration, is it possible to enter their name as co-owner? II) After completion of the loan tenure is it possible to register their name as co-owner? III) How calculation of the share of the property should be done?
Yes, It is increasing my tax liability to a huge extent.
Can I gift the rent to parents and avail Tax exemption also ?
XYZ,
Registration of property is different from borrowing a loan. You can have multiple owners in the property. The share of the owners can be equally distributed or in respect to the funds invested. So if your brother in law is contributing 40% he and his wife can have 20% share in it wherein the total ownership of their family will be 40%. Rest you can take a decision. The loan can be taken by anyone. However, since you are taking a loan on a land, you will not be eligible for any tax benefit.
You can include their name while registration of property. It will be difficult to do it later since it will be mortgaged with lender.
Raj,
Since rental income will be recurring it will be difficult to gift it every time. Also, you can gift the rental income only after completing the tax liability. This is primarily because you are the owner of the property. Gift will not avoid your tax liability.
In my view you do not have much of the option here since you are the owner of the property. You can seek guidance from a tax expert to see if there are any income tax provision where you can reduce your tax liability.
Hi,
Thanks for your reply.
After completion of construction of the house will we be able to get the tax benefit? If that time, my brother-in-law & his wife pay half of the EMI per month to us then can we (me & my husband) claim the full tax benefit? If yes then how to legalize that monitory transaction?
XYZ,
Yes. Once the construction of house is completed you can avail the tax exemption on your home loan. However, you can avail tax benefit only on EMI which is paid by you to your lender. Transaction of your brother in law or his wife paying a share of EMI to you will not be treated for tax exemption.
Its wiser then that you avail home loan on your contribution. You will not be able to monetize tax benefit on your brother-in-law contribution.
Jitendra,
Thank you for the suggestion.
Dear Sir,
I have a housing loan with LICHFL against a property that I got registered in Feb’2014. I got married in April and my wife is a PSU bank employee.Now I want to include her name as co-borrower with the loan from LICHFL.
Since the PSU banks has some special facility for its employees w.r.to home loans, I want to get the same transferred to the bank from LICHFL though takeover.
As a co- borrower in our joint loan, whether she would be eligible for such facilities like reduced home loan interest rates for Bank employees as applicable when we go for transferring the loan from LICHFL to bank. Though payment will be fully made from my account and only I will be availing the tax benefit.
Surya,
Transferring your existing housing loan to the employer loan will not be an issue. Whether your spouse will be eligible for special rates from her employer is a decision which rest on the bank. In my view she should be able to avail the benefit but this confirmation you will get from the bank. However, do remember that if you are going for a joint loan then you will be able to claim the exemption on your share of loan and not the complete even if you are repaying the complete EMI.
Hi Jitendra,
I want to purchase a purchase a property with my elder sister as coowner. Mainly want to make her coowner so that she can sell house easily when i am no more. As per my understanding, Coownership is added safeguard while execution of will.
She is unmarried and not working.
I will be sole applicant for home loan and would be paying EMI alone. Since i am only applicant for home loan, i would be enjoying all tax benefits. Have few queries.
1) Do you see any concern from bank with above arrangement like reducing loan amount eligibility. I want to take maximum loan amount (80%), considerig my salary and with maximum duration.
2) what type of Coownership is possible while doing property registration. I heard of a) either or surviver b) both own property in certain percentage. I want to opt for either or surviver mode.
3) what is concept of main owner and coowner. Can my sister be main owner in either or survivor mode. Will banks have any objections in giving me loan with this arrangement?
Dear Sir,
I am going to book Flat and housing loan form SBI is in process
I am single at present so I am not able to add wife name as a ownership & EMI will be paid by me only
1. Can I add my wife name as a ownership after 2 years?
2. If she is working so can we both get benefit in Income tax?
Bhushan,
1. You may not be able to add ownership with general registration process but you may do it through gifting share in the property to your spouse. This can be done through a Registered Gift deed but stamp duty will be payable. However since the original property documents will be with your lender you will have to speak to them for this process.
2. Your spouse can benefit from the loan only if she is also a co-borrower which in my view cannot be added later in any housing loan. Even as a co-borrower then there are many consideration wrt EMI payments and others for tax benefits.
Dear Sir,
I and my fiance looking forward to buy a home loan and I want to add my father’s I come as well to increase loan amount my father gets pension, now please advice how to proceed as I want tax exception for me and my fiance and other prob SBI bank deny to consider my father’s pension? please help?
Mukesh,
Adding a co-borrower later in a loan is difficult. As far as i know No banks allow this. Also, even though your father is receiving a pension bank would be reluctant to add him due to his age. In general bank do not grant home loan at higher age since its a very long term repayment.Only income of a person cannot be added to another income, he or she becomes a co-borrower which means the benefit of exemption on the loan also gets divided proportionately.
So in my view you may see reluctance from bank on adding your father as a co-borrower.
Sir,
I have a 20 yr home loan in my name since 2011 so the flat is mortgaged (with originals) with the bank. I gifted this flat to my mother in 2013. But now I want to have a top up loan on this home loan from the same bank. Can I get it ?
Will my gifting of flat to Mom will cause Issues. As bank doesn’t know this gifting.
Thanks
Sagar
Sagar,
Ideally, the property is mortgaged with the bank and so any transaction on this property which results in change of ownership has to be approved by the bank. If it has been done without notifying it, like you said, it may note be valid legally. This is my view.You can get it confirmed from a lawyer.
Lastly the gifting has to be done through a registered gift deed wherein you have to pay a stamp duty.How you have done it?
In my view first notify the bank and see how the transaction holds legally. Then go for the top up loan.
Yes Sir,
It is done through gift deed and the stamp duty is also paid.
Will the bank find this in the Top up loan title search procedure and reject the loan. But any way here I am paying the EMIs. The electricity bill still comes in my name. Conveyance deed is not done as society is still not handover from developer. So they should consider.
Pls suggest.
Thanks
sagar
Sagar,
When you gift your property to someone then the ownership gets transferred to the second person. Now from bank perspective they have a full right to allow or disallow this transaction since it is mortgaged with them. In general for gifting such a property you have to take an NOC from the lender as they will look into the aspect of transferring the loan to the new owner or demand for complete prepayment before the gift deed is signed.
Now i am not well aware of the legal aspects if you do it without informing them. If legally not allowed you may be held liable. As i have mentioned an NOC is required from the lender if you do any transaction in a mortgaged property. You should check with the lawyer on the legality aspect or get advise from your bank.
hi,
My husband booked a flat last year and 4 months left for possession.. He took 15 lakhs loan in his name .. I am a housewife … Now we want to register the property in both of our names .. 1st owner as my husband and second owner as me … Since my name is not there in loan borrower list can we reg flat in both of our names ?? Is there any way so that my name can be added at the time of registration ?? Down paymenyT was done by my father…
Please advice
Chandrika,
In my view in general loan borrowing does not affect the property registration. However, what difficulty may come in is the transactions which have been done uptil now i.e builder buyer agreement and hence forth. If it has been in joint names it would have been good and property registration in joint name would have been easier. I am not very sure how it will take place now as that’s a legal matter where i don’t have much of expertise.
It will be good if you take view from a lawyer as to how your name can be included.
Dear sir
I am PSU employee I have taken a home loan of 28 lakh u Der subvention scheme now at the time of registry I want my husband name of be added as co owner and Co borrower of the loan .is it permissible
Yes, co-owner can be added but you need to re- apply the loan application if you want to add co-borrower. Just check with your loan provider.
Dear sir
I want to by a house which is in the name of my grandfather and my brother.I am working in UK for the last five years with MNC.i am NRI.I am single.Can i take home loan for this proparty ,the house is sitatuted in noida
Ravinder,
Home loan is available to NRIs. But i am not aware of its applicability within family transactions. You can get more clarity from your bank.
my father is a pensioner. can he apply for home loan.
Stuti,
If he is above age 60 then bank will be reluctant to offer him a housing loan. The only situation he can avail is by becoming a co-borrower with any of his children in which case his pension income will be considered.But even here early 60s or late 50s is easier to get. Beyond that even as a co-borrower bank may be reluctant.
Sir,
I have taken loan from LICHFL and Purchased house on my wife name. I am paying the EMI from my account. My wife is not paying any EMI nor she is claiming any tax on Home loan. Can I claim under house loan for the above said case. If so, our employer asking for declaration from my wife that she is not claiming anything or share of loan.
Can you please help me out in getting the sample copy of declaration and solution to my query.
Dear Sir,
My father is a pensioner and wants to buy a property. He wants his only son to be the co-applicant but doesn’t want him to be the co-owner of the property. Can he get loan?
Anshu,
Your father won’t be able to avail loan only based on his income. This is primarily due to age factor. Home loan is a long term commitment and so bank in general resist giving loan to individual at higher age.He will get only with his son as co-borrower. You can get conformation from any bank on this.
Dear Sir,
we have purchased a property with my wife as owner and myself as co-owner.The same applies for loan availed (main applicant is my wife and I am co-applicant)
100% Loan EMI is paid by my wife from her Salary account (but here I am joint account holder ) I have my own separate Salary account and there are no transfers between the two accounts
My Question
Can my wife claim 100% exemption on tax as neither I am paying any EMI from my salary account nor claiming any tax exemption
As c0-owner can I prepare an affidavit stating 100% share of my wife in property
Sandeep,
The tax exemption cam be claimed in the ratio of borrowing i.e. in the proportion loan has been taken. So if it is 70:30 then exemption will also be in the same ratio. To claim 100% the loan has to be borrowed completely by her. No, affidavit does not have any legal validity and transferring your share to your wife can only be done through registered papers.
Check with a good tax expert what he/she says.
Dear Sir,
Firstly thanks you for your prompt advice
What is ratio of borrowing i.e. the proportion loan
We just took the joint loan (with my wife being the main applicant) because we had purchased the property as owner (my wife) and the co-owner myself and the loan approval and disbursement could be achieved taking my wife salary only (without clubbing my salary ) and the 20% self funding was also done from my wife salary account
In this situation please guide us as to whether my wife can claim 100% exemption on tax as neither I am paying any EMI from my salary account nor claiming any tax exemption
Thanks
Sandeep,
If loan is based only from your wife income then she is the complete borrower. In that case she can claim the entire exemption. Now the only issue whether the loan document show you as a co-borrower. If thats so then take advise from a tax expert as to any document you need to prepare.If not then no need.
I have purchased a flat on Joint name with my brother on Loan. Is it possible that only one claims tax benefit on full interest component and one claim only principle?
Kishor,
There is no such provision. One can claim in proportion of their loan and both principal and interest go together.
If flat is given on rent ,than? I want to show rent in my income and full interest in my account.
If a house is on rent you can still claim exemption of interest and principal of your home loan. But there are certain rules to it.
My view is that you take assistance from a tax expert to get the detailed calculation on the exemption limits and way to claim it.
Hello Sir ,
I have taken housing loan from LICHFL . I am the main applicant and my husband is co-applicant for this loan account . We have given husband’s (co-applicant) bank account details in ECS form. Is it possible to change co-applicant as main applicant in loan account ??
Thanks & Regards
Madhavi parab
Madhavi,
It’s not feasible to change the main applicant. Banks don’t do it since they will have to reprocess the loan application again to see if main applicant fulfills criteria as per their norms.
Dear Jitender
Would be grateful for your advice in the below matter.
I am planning to purchase a property where my mother will be the 1/2 co-owner. Since I donot have sufficient funds/home loan to buy the full property in my name, she will invest 1/2 amount. However since she is not staying with me in the same property, can I pay rent to her as I am using the full property and claim HR exemption.
Alternatively, can I take a home loan but keep the full property ownership in the name of my mother.
would be grateful for your advice
or the third option would be to take the home loan in my name and joint ownership with my mother but transfer full property to my mother later because now there is no registration stamp duty payable for transfer to blood relative
As per my calculation – HRA exemption by paying rent is more beneficial than interest exemption on home loan.
Thanks in advance
Daughter,
Firstly for exemption on home loan you need to have an ownership in the property. So if you avail any loan make sure you keep the ownership-Fully or partly. Secondly, if you have any kind of ownership in the property paying rent does not work. So you will not be able to utilise this benefit if you have any ownership. Lastly comparing two which is better is difficult. Home loan is a long-term liability and so even if exemption is more you will be
burdened with this liability which will restrict your financial decisions in future. So avail it after giving a clear thought. Gifting an immovable property incurs gift stamp duty which will be payable whenever you gift your share. So there is cost associated which may be high as rates vary with states.
Rest whether to give rent to your mother and take exemption I am not a tax expert so won’t be able to comment much on it. Yes it’s a provision available but for detailed clarification good to take views from a tax expert. I have explained you some facts in three situations you have illustrated.
Hi Jitendra.
Similar situation here, as the property’s ownership is with father and his pension amount isn’t much (as major income is from Rental & Interest bearing Lendings). Also, I won’t be entitled to any tax-benefit as U specified above. Please note that my purpose of taking home loan is to have additional construction done in the built-up property, as well as to gain tax benefit in all ways possible.
So, I request you to kindly guide me on the best solution with max collective benefit to me!
Thanks.
Ripudaman,
In your situation it would be wiser that you get include your name in the property if you desire to seek tax benefit on housing loan. Without any ownership the tax benefit cannot be claimed. The best means would be when uour father gift a share from the asset to you. There would be no gift tax on you but stamp duty will be payable on the value gifted/ Once you have the part ownership in the asset you will be entitled for the tax benefit.
You can seek a tax expert advice on the option i have illustrated.
My father and I have bought a home and home loan is on both of us, can we register home on my name only during registration?
Tushar,
If claiming tax benefit by an individual is not a concern then the property can get registered on a single name. There are situations when a son takes a loan and the property ownership is completely with the father. The only disadvantage in this situation is that one who does not have any ownership cannot claim any tax benefit on the home loan.
Rest I am not a legal expert so I will not be able to comment on the legalities. You may seek assistance of a legal professional to confirm my views.
Sir I get 10k per month and my father pension is 15k.Can I get home loan of 5lac with the help of my father(72y).sir kindly reply and advise me.
Bharat,
Your father age is quite high for banks to consider. Generally it’s easier when the age is near about 60 years. In my view banks may not consider his income for the home loan. Still you can enquire with any bank to check the eligibility of your father.
sir.
my husband is having LIC home loan which is having highest interest rate 11.45%.we want to transfer the balance amount to sbi which one is having 9.55 interest rate.is it a better option? and is there any possibility to add my name as co applicant to avail home loan interest for women? i am home maker.
Sir, I work in a public sector bank . I am planning to take a staff housing loan from my bank with my father as co- applicant,The entire loan amount including principal and interest will be borne by me. My father is a retired state govt employee and i am the only daughter of my parents as such the i am the potential heir to their property and i am unmarried. However my father is the sole owner of the land on which the house is to be constructed that is the land on which mortgage is to be done. Can i claim tax benefit under Section 80C and Section 24 ? Please reply.
Shobana,
You need to look at the total cost which you will pay during the tenure of the loan. If there is a substantial difference between the two then switching your home loan will be advisable. So figure out the total loan you will repay in SBI and LIC and see the difference.
Just adding your name as co-applicant will not help you in availing the benefit. If you avail a loan based on your income then only you can get the lower rate benefit.
Me an my had taken a joint home loan from bank and are joint owners of the property. Ownership ratio is not mentioned in the agreement. If my wife wants to claim full amount of repayment of principal amount and some portion from interest amount, is it is allowable? For more clarity: Rs.79000 is the principal amount and Rs.236000 is the interest amount. My wife is claiming full Rs.79000 of principal amount and Rs.75000 (out of total 236000). Only Rs.161000 is claiming by me (balance interest amount). This calculation is based on our salary structure. Is this is allowable? An expert’s opinion is requested.
Johnson,
Ideally, if there are two owners then the ownership is equally or can be ascertained as per the funds invested. Yes, loan availed jointly will be based on the ratio of your income. The exemption is claimed on the basis of your loan ratio and not property ownership. So if your claim is according to the ratio in which loan is availed then it should be fine.
Hi im kavi, working in indain army I just wanna know, can I joint my bro as a co-owner who working in pvt ltd company. We both are living together and both unmarried
Kavi,
A brother or sister relationship is not preferred by banks for granting of housing loan. The prime reason is the larger probability of disputes. However, in property you both can be co-owners.
I have a property with minor co owner. Suggest me the bank to take construction loan for this prperty
Sunita,
You can approach any bank since they will give loan on the basis of income of the major owner. Check out the total interest payment during the term and then decide.
Dear Sir,
I have taken home loan on my name as applicant. I did not add my wife name as co-applicant since I was able to get full eligibility. My wife is not working and I would like to add her as co-borrower. My house is also registered on my wife name only. The Home loan is with LICHFL. Please advice.
Dear Sir,
I and my wife have taken a home loan jointly from SBI for a property jointly owned by us. In home loan agreement form it was mentioned that “the property shall be insured comprehensively against the market price”. As I infer from it that the property insurance is mandatory, but it is not mandatory to buy it from the SBI General Insurance. When I checked my loan account few days back I found that a premium of Rs 12696/- has been deducted against the SBI Long term home policy for 10 yrs duration. When I wrote an RTI to SBI, I asked them to provide the criteria adopted to choose SBI General insurance company as preferred insurer. SBI declined it stating that it was “commercial confidence” shown by bank in the insurer, which is totally against the fair lending policy. Also when I obtained the proposal form (filled by SBI RACPC) of Long term home policy from SBI General customer care, there were many misinformation like it was shown that property is solely owned by wife, her DOB, loan amount (that is really strange), it was mentioned that it is independent house and situated on 2nd floor, while it is on 7th floor, area of property etc. Also it (i.e. the proposer SBI RACPC) allowed SBI General to share our personal data, I have written a mail to SBI General for correction of information. Request you to answer following queries
1. Due to the wrong information provided by the proposer (SBI RACPC), if there is a chance of claim refusal in future. Do you think that it was intentionally done by proposer?
2. By deducting premium of home insurance policy from loan account, loan amount is increased and we will have to pay interest on it. Does SBI have the authority to deduct from loan account without asking from us? What measures can we take?
3. Can I cancel the home insurance policy and take one on my own?
4. Can I complain to RBI regarding this and how?
Please provide your expert opinion. Thanks in advance.
Vicky,
It will be difficult to add her as co-borrower as she is a housewife. Also no need to to do it if you are repaying the loan. However the issue will be on tax benefit which can be availed only if you are a co-owner of the property.