There is no law in India that prohibits joint property ownership among siblings. As far as making the decision of purchasing a property with your brother, or sister is concerned, you are free to do so. You will start facing problems when you decide to approach a bank for a home loan.
Even though financial institutions like banks invariably nudge applicants to go for co-borrowing. However, they draw the line when you project your siblings as co-borrowers.
Banks can go to the extent of explaining the benefits of taking a joint home loan — most preferably with your spouse — if they see the possibility of brining a co-applicant on board.
This is done to avoid getting their investment caught in a whirlpool of inheritance laws in India.
Among spouses, the one who survives becomes the legal owner of the property and ultimately responsible for repaying the remaining home loan amount. After that the property belong to their children and the transfer is comparatively simple. The same is not true for siblings.
“From the point, one of the two siblings get married, their families branch out, and this makes inheritance of their joint property highly complex,” said Brajesh Mishra, lawyer, Punjab & Haryana High Court.
“As different families are involved, disputes are easy to occur. Most of the property disputes pending in various courts in India, in fact arise of this sort of family misunderstandings,” he added.
“Even if both the siblings are unmarried, banks don’t rule out the possibility of them starting a family at some point, which may unfortunately unleash the application of highly complex inheritance laws on the joint family property,” explained Prabhanshu Mishra, lawyer with the Lucknow bench of the Allahabad High Court.
In case of married siblings, the applicants would anyhow face an outright rejection of their application.
See also: Taxation of jointly owned property
FAQs
Do banks give joint home loan to son and father, or son and mother?
Banks offer a home loan if the son is the only child, and co-owner of the property.
Do banks give joint home loan to daughter and father, or daughter and mother?
Banks offer a home loan if the daughter is the only child and co-owner of the property.
Can married daughters apply for a home loan with parents?
Most of the banks in India don’t offer home loan in such an arrangement.
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