How to add a co-owner to a property?

Propertypistol

During any time during their lifespan, property owners have the choice of granting co-ownership of their homes, flats, apartments, and landed property. Establishing a co-owner in a property is mainly made to prevent disagreements that may develop during the allocation of the property following the owner’s death, although the reasons for doing so may change in each circumstance.

A simple mutual contract, on the other hand, is not the best technique to add a co owner to your property. One also can’t just declare that you’ve decided to add a co-owner to the property. You can establish an ownership in your children’s benefit by adding their names to the existing deed. They will not, nevertheless, start receiving your portion of the property once you pass away, and your personal ownership stake will be subject to probate.

An owner who wants to add a co-owner to his property must do so through the creation of a new deed. To really be legally legitimate under the Transfer of Property Act, this revised deed must also be recorded at the sub-office registrars.

Forms of deeds used to transfer partial ownership of a property

The owner might add a co-owner to his property in one of two methods. He has the option of creating a sale or gift deed.

sale deed

This transaction comes in the form of a standard sale deed. A new sale deed should be issued as part of the transition, clearly stating the piece of the property which is being passed in the name of the co-owner. This deed, like all other sale deeds, should be recorded with the local sub-office. registrars at the time of registration of the new sale deed, stamp duty and registration fees would apply.

Deed of Gift

It is also possible to share property ownership by gifting a share of the asset to the chosen beneficiary. A deed of gift should be completed and fully registered with the sub-office registrar’s of the area in question as part of this process. Just at registration process of the gift deed, stamp duty and registration fees would apply.

The title should be clear

Specify what you and your co-owner will divide the ownership in the revised deed. Joint tenancy with right of survivorship would be necessary if you wanted to split it proportionately. When one of you passes, the ownership of the property immediately falls to another. The co-ownership would be tenancy in common if the shares were unequal.

The Consequences of Putting a Co-Owner to a Home Loan

Whereas if owner has still been paying off a mortgage on the property he wishes to jointly gift or sell, he must notify the bank of the new arrangement. To add a co-owner, the bank would have to prepare a new home loan agreement, which would then have to be recorded once stamp duty and registration fees were paid.

The bank also would require that the co-owner be added to the home loan as a co-borrower. The bank would conduct a credit report on the new party in accordance with its regular processes. As per the bank’s regulations, the owners will be responsible for any costs.

Putting a co-owner to a property has tax ramifications.

Individual tax credits are available for homes held in joint names under Sections 24 and 80C of the income tax code. The co-owners will have to pay capital gains tax commensurate to their part of the property when it is sold in the future.

Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. PropertyPistol does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.

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