Even though people are buying their first homes in their early 20s, house ownership becomes important after matrimony. For a more stable setup – who would like to move places every 11 months, right? – having your own home becomes crucial. Not to mention the parental pressure for the accumulation of joint savings and investment in a stable asset.
Considering that joint property purchases are easier than solo ownership, married couples often plan their purchases driven by emotional gratification rather than the legal or financial aspects of this expensive investment. We look at the legal and financial aspects of joint property purchases.
Under whose name is the property registered?
This is probably the first question a couple must ask before they embark on the homebuying journey. From a legal perspective, the property belongs to the person under whose name it is registered. Since a newly purchased property would fall in the category of self-acquired property, the person would be legally free to dispose of it in any manner. Therefore, decide whether the property would be registered jointly or solely.
Who is taking the home loan?
Just like any homebuyer, a couple too would be expected to bring 20% of the property value from their pocket and the bank would finance the remaining 80%, depending on their eligibility. Since the credit-taking capacity of a couple is higher than a bachelor, spouses have the option to apply for a higher loan amount. However, this is where you must consider
if it is really necessary to take a joint loan. In the case of a joint loan:
- Irrespective of your understanding, both parties are legally and financially liable to pay the EMIs and the loan.
- Both parties are servicing a loan. Thus, the chances of fresh borrowing for other needs are limited.
Who will make the down payment?
You are supposed to bring at least 20% of the property price. At home, no real calculations are made about each person’s share when arranging this money. This leaves a legal and financial grey area. Irrespective of who paid the down payment, the property would belong to the person under whose name it is registered.
Who will pay the EMI?
Banks don’t care who pays the EMI for as long as it is getting paid. Couples may decide that one party would make the EMI payments while the other party would run the household. It may seem easy, however, that is not true from a legal-financial view.
The person bearing the household expenses may get the short end of the stick in case of future disagreements. They may not be contributing towards EMI payment on paper but they are equally responsible for the payment.
FAQs
Do women get stamp duty concessions on a property purchase?
In most Indian states, women, typically, pay 1% less stamp duty than men. In some states like Delhi, the concession is higher (2%).
Who gets the joint property after divorce?
The property would be divided depending on its ownership.
An alumna of the Indian Institute of Mass Communication, Dhenkanal, Sunita Mishra brings over 16 years of expertise to the fields of legal matters, financial insights, and property market trends. Recognised for her ability to elucidate complex topics, her articles serve as a go-to resource for home buyers navigating intricate subjects. Through her extensive career, she has been associated with esteemed organisations like the Financial Express, Hindustan Times, Network18, All India Radio, and Business Standard.
In addition to her professional accomplishments, Sunita holds an MA degree in Sanskrit, with a specialisation in Indian Philosophy, from Delhi University. Outside of her work schedule, she likes to unwind by practising Yoga, and pursues her passion for travel.
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