I have taken a home loan with my wife as the main applicant and myself as the co-applicant. I have registered the apartment under my name. About 80% of the loan amount has been released by the bank to the builder. I came to know that since the property is not registered under her name, she cannot claim tax benefits. What should I do to make her the co-owner with 50% share in the flat? Do I need to go for re-registration? Registration cost me ₹ 1.5 lakh. I have read about transfer deeds, gift deeds, will deeds etc (Will gifting 50% property to my wife solve my concern or do I need to sell 50% of property to my wife?)
—Raman Khanna You will need your lender’s approval for gifting 50% of the property to your wife, or selling 50% of the property in her name. This is a must to enable her to avail tax deduction benefits. Whether you gift or sell a part of the property, it will have stamp duty implications though the stamp duty on a gift will be lower. In any case, if you gift the property it will not serve any benefit under the IT Act as the income from the asset gifted to the spouse will be clubbed with your income. The approval from the bank for sale of 50% share to your wife should not pose a problem, as she is a co-applicant to the home loan.
What are the pros and cons of down payment vs constructionlinked payment option for any under-construction property?
—Tanuj Goel It is always advisable to go for construction-linked plan for a property to ensure that your exposure is in proportion to the stage of completion of the property. Whether you get a one-time disbursed loan or a construction-linked plan, you will not be able to claim tax deduction benefits either on the pre-EMI interest or the interest and principal element of the EMI till the financial year in which the construction is completed. The discount available in a full down payment plan will very rarely justify the significant additional risk of project delay that you take. If paying EMI is your concern, most banks would be happy to start off your EMI on each disbursement with the EMI being suitably adjusted after every disbursement. This will help you save on preEMI interest.
I have taken a home loan to purchase a property which is in my name but my brother pays the EMI. He now wants the property in his name. How can I include his name?
— Dhananjay Malik We assume that your brother is not a co-borrower to the home loan and that he is informally paying your loan EMI. You can transfer the house in your brother’s name with the bank’s consent through a sale deed on which you will have to pay stamp duty and registration charges.
Your brother can apply for a fresh loan and can get the same on the basis of his income and past repayment history. However, he will have to pay a processing fee to take a new loan.
Also, since the transaction is between two related parties, the bank will be extra cautious while granting your brother the loan and may subject the property to rigid valuation norms.