After marriage, Rajesh Agarwal, a tech professional, decided to make his wife Siddhi Agarwal a joint owner of his flat in Bangalore. He believed that it would be a simple process with minimum paperwork, but his misconception was soon dispelled. So much so that Rajesh started to rethink his decision.
Property owners in India can add co-owner at any point in their lives. Often, people who have bought a property before getting married do it. It is also done to avoid any conflicts in the future. However, one must remember that it is a tedious process with cost implications.
To add a co-owner, a new deed has to be created, which must be registered at the sub-registrar’s office for it to be legal under the Transfer of Property Act. This can be done either by creating a sale deed or a gift deed.
Sale deed: The first way is to sell a portion of the property to the other person. The beneficiary can use this sale deed to get themselves registered as the co-owner of the property by paying the requisite charges. Like any other sale deed, this also has to be registered at the sub-registrar’s office. Usually, the stamp duty rate varies between 5%-12% of the property value (varies in different states). The registration charge is 1% of the property value.
Gift deed: Another way to add a co-owner is by gifting a portion of the property to the beneficiary. Here, a gift deed must be executed and registered at the sub-registrar’s office. Stamp duty and registration charges would be applicable at the time of registration. The stamp duty is generally 2% of the property value, along with a 1% registration charge.
Co-owning a property is recommended for married couples; if one of the partners passes away, the property automatically gets transferred to the surviving spouse (if the share in the property is equal). Secondly, if the couple has a joint home loan, both partners can avail tax benefits.
As mentioned earlier, spouses can individually claim tax benefit under Section 24 and Section 80C of the income tax law. If the property is sold in the future, the co-owners will have to pay capital gains tax proportionate to their share in the property.
If the property is still on loan, the borrower will have to inform the bank about the new arrangement. After a new sale deed is created and registered, the bank will also create a new home loan agreement adding the co-owner’s name to it. Here, some banks also insist on making the co-owner a co-borrower in the home loan application. This is done after the bank is satisfied with the creditworthiness of the new owner. This whole procedure might involve some cost, which will vary from bank to bank.
To add a co-owner in an under-construction property, the agreement from the builder is a must. For this, you will have to pay transfer charges. However, this is recommended as you won’t have to pay additional registration and stamp duty charges later.
Nikunj is an avid writer. She works with RoofandFloor as a Content Strategist and shares her industry knowledge to apprise homebuyers about real estate market in different cities across India. An alumna of Asian College of Journalism, she is passionate about real estate, cinema, and travelling.
RoofandFloor is India’s fastest growing and most trusted home-buying platform. Launched by The Hindu Group in September 2014, it has quickly grown to influence over 6 Million homebuyers across the country, facilitating over 2 Million connections between builders and high-intent customers.
Join over 5,000 homebuyers who get the latest real estate news and advice delivered directly to their inbox
SIGN UP
Disclaimer: All project related information on RoofandFloor has been provided directly by the builder or has been collected from publicly available sources, and has not been verified by RoofandFloor independently. The information sources which we use include marketing collaterals of the project sent by the builder and other secondary information sources available on the internet. At RoofandFloor, we aggregate information points of different projects available for sale, from different publicly available sources, such that the home buyer can search and explore the available projects in one place and decide on the next steps. This is a free service we extend to our home buyers. The projects’ information points have not been verified by us against authentic documents and are only indicative of the actual situation of the property, project or land holding, and their ownership. RoofandFloor.com shall neither be responsible nor liable for any inaccuracy in the information provided here. Therefore, the customers are requested to independently validate the information from the respective developers before making their decisions related to properties displayed on RoofandFloor. RoofandFloor.com, its directors, employees, agents and other representatives shall not be liable for any action taken, cost / expenses / losses incurred, by you, based on the information given on the portal.
The display of information on roofandfloor.com with respect to any developer or project does not guarantee that the developer / Project has registered under the The Real Estate (Regulation And Development) Act, 2016 or is compliant with the same, and there is a possibility that the authorities may deny the registration or revoke the registration if the same has been granted or take any other action for non-compliance.
