TomorrowMakers

Sharing property has several pros and cons. One needs to evaluate them before deciding to share a property.

Planning to share a property? Here are some pros and cons

Thanks to landmark legal decisions as well as changing trends in our society, women are securing more opportunities across several walks of life, one of them being real estate. As women earn higher incomes and stamp their assertion, co-owning or co-renting property is a natural progression. However, women often find themselves grappling with pros and cons sharing their property either while renting or even while purchasing a house.

Here are some pros of jointly owning or renting a property

Pros of a shared property

Affordability

The biggest reason to share property is that it will be easier on the wallet. For women who have just started their careers, it would be difficult to rent or buy a property on their own. However, by co-owning or co-renting the flat, they would have to spend less. A married woman can co-own property with her husband. A woman who isn’t married yet could co-own property with an immediate family member such as parents, grandparents or siblings.

Similarly renting a flat in a plush society might not be feasible for a single person. But one could rent such a flat with other flatmates.

Smooth succession of property 

One can purchase a property jointly with immediate family members (spouse/parents/siblings/children) or with business partners or even friends. However, if one is taking a loan for joint purchase of property, it is advised that the co-owner be an immediate family member. This is because lenders do not favour properties which are co-owned by individuals who aren’t close relatives of each other. Purchasing a property jointly is vital. This is due to the fact that most properties which are purchased are flats in housing societies. If something happens to one of the owners, the society will transfer the flat in the name of remaining joint holders without insisting on an NOC or probate from the remaining legal heirs.

Income Tax Benefits 

If a married couple co-owns a house and co-borrows, then both the husband and wife can claim an income tax deduction. If principal component for a given financial year is Rs 4 lakh and interest payment is Rs 6 lakh, then the couple can claim income deduction of Rs 1.5 lakh each on the principal component and Rs 2 lakh each on the interest component under Section 80C and under Section 24(B), respectively.

Attractive incentives by the government

Certain state governments have been encouraging women to purchase property either jointly or individually. This is being done by lowering the stamp duty rate. For instance in Delhi, the stamp duty rates are:

4% -> Property is owned only by woman

5% -> For property which is jointly held by man and woman

6% -> Property is owned only by man

Moving in is easier

After moving into a new place, one would have to set up the interiors. Purchasing furniture, applying new paint, fixing electrical fittings etc may also have to be completed. One may have to get in touch with suppliers or contractors and negotiate rates. Managing all this while juggling one’s busy schedule could be tedious. One also has to find dependable maintenance staff. Women moving to a new house would testify how difficult it is to find a new maid or a cook or both.

However, moving into a furnished place where the interiors are done up and are regularly maintained would be fantastic. This is likely if one is moving into a place which is already inhabited by a flatmate.

Safer than staying alone

Staying alone could pose several types of risks even in a society which is fairly well protected by round the clock security guards and CCTV cameras. Sharing property is a much safer proposition. Especially for women and seniors as they may be perceived as being vulnerable by burglars and other anti-social elements.

However, living in a shared property also has certain pitfalls. Here are a few:

Cons of a shared property

Including a non-earning co-owner

A married couple could purchase a house as joint owners. If the husband is a working individual and the wife is not, and the former passes away, then there could be trouble for the wife if there is the liability of a loan. The lender may start following up with the wife to pay off the liabilities.

If the relationship with co-owner sours

Sometimes, the relationship between co-owners may take a bad turn. There could either be disagreements between siblings or separation between a wife and husband or differences between a parent and a child.

You may not know the person too well

Even renting a house with a flatmate could turn out to be a sour experience. Initially, you might get along with someone socially and decide to live with them. But later on, if the flatmate’s habits and lifestyle start conflicting with yours, you may find it unpalatable to continue living with that person any more. It is easier to exit from co-renting a place. But if you end up co-owning a place with someone who is being a troublesome flatmate, then it becomes all the more difficult to exit such an arrangement.

Thus, one can decide to co-own or co-rent a property after thoroughly evaluating the pros and cons of sharing a property

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