Joint Property Owneship Benefits-Risks: Brothers and sisters together can be a profitable deal with many ways. This makes it easier to take a property with a large house or better location and also shares the expenses. However, it can also cause many problems.
Property Buying with Siblings Good or Bad: Have you ever thought that what will happen if siblings buy a house or property together? Is this the right decision for you? If this happens, how will the property use, how will the expenses be distributed and what will happen if someone wants to sell the property in the future? In this article, let us know all these questions and what are the benefits, risk and tax related rules of buying joint property with siblings.
Why do brothers and sisters buy property together?
Often when we think of buying a house or property in a good area, it is difficult to raise so much money alone. In such a situation, brothers and sisters add their money and buy property together. This gives them a chance to take a big and better home. Also, if all work wisely, then family bonds are also strong. Because buying a property is not just a matter of money, there is confidence and also associated with the family.
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Benefits of buying property together with brother and sister?
1. Chance to buy big and better property
You can buy a big and good location property by adding money from the property you can buy alone. Especially such areas where the property costs high, there can be a better option to buy together. Apart from this, such a property is also more likely to increase prices in the future, which can give good returns from investment.
2. Gets easy to distribute expenses
When you buy the property together, the price of the house, home loan installments and maintenance expenses can all be distributed among themselves. This reduces the financial burden on each one. Suppose the price of a property is very high, which you cannot buy alone, but it becomes easy to buy by mixing money with some people. Along with this, the burden on all is reduced by dividing maintenance like electricity, water, cleaning into equal parts.
3. Loan is easily found
When you apply for a home loan from the bank, the bank sees your income as well as the income of your siblings, if they are co-boyrs. This makes the bank confident that the capacity to repay the loan is more, so it becomes easy to get a loan of large amount. This means that by buying together, you will get better finance from alone.
4. Help each other
If a siblings sometimes get a crisis of money, such as missing jobs or increased expenses due to any disease, then other members can help. This also provides financial support inside the family and does not affect the responsibility related to the property.
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Disadvantages or problems of buying property with siblings?
1. Controversy over the use of property
When many people are owned by property simultaneously, there can be controversy about who will use that property. For example, if any of the property has to stay more time and if someone less, then this thing can cause quarrels. In addition, there may also be differences in property regarding renovation or maintenance in the property.
2. Problems in selling property
If any one siblings have to sell their stake and do not want the other, then it becomes a problem. In such situations, no property can be sold without consent. Such disputes often turn into long legal battles, which can also spoil family relationships.
3. Not to give loans EMI
If there is a property purchased on the loan, then the installments of the loan are the responsibility of all co-owners. If a member does not fill his installment, the rest may have to fill his place. This increases economic pressure and can cause tension in relationships.
4. Changing life can cause problems
Large changes in life such as marriage, changing jobs, going to another city or country can also complicate the matter of joint property. If a siblings go away or adopt a separate lifestyle, then there may be a problem in property decisions and care.
What are the tax rules on taking joint property?
If all of you siblings have taken home loans together and there are co-boyrs on the loan, then you get tax exemption on all home loan interest (section 24) and the money you have returned to the loan EMI, it also gets a discount (section 80C). If you have rented that property, then the fare that comes, has to be distributed according to their part in all siblings. Everyone pays their share tax. When the property is sold, every owner has to pay tax according to his share.
What necessary work should be done before purchasing property with brother?
- Make co-ownership agreement. This is a written agreement, in which it is clearly written that how much part of the property is, how to distribute the expenses, how will the decisions take and what to do if someone has to sell the property.
- Make the title document in the name of all. Property documents should be the names of all owners, so that there is no legal problem later.
- Before purchasing the property, consult a good lawyer, so that tax and legal rules can be understood properly and there is no problem.