Couples working and managing a good income can have a windfall of savings for a dream house. Working couples can get tax benefits from revenue generated on house property. Compared to a sole earner, joint ownership of property can benefit when purchasing a house.
As the saying “two heads are better than one”, two earners are better at working towards property ownership by saving up income than one of them working for an extended period and taking a long time to save.
Other than the cost of the property, purchasing a home involves duties and taxes, which may go up to a good percentage of the total expenses depending on the area and city you are buying a property in because the Stamp duty varies from place to place.
Other expenses apart from Stamp Duty are the following:
- GST on under-construction properties
- Registration charges
- and TDS which the buyer deducts from a certain amount of payment made to the seller. In the case of housing which is affordable, a chosen amount is reduced from the overall GST through a proposal.
GST is not applicable to homes that have completion certificates, so ready to move in apartments can save you a lot of money.
After you purchase a house, along with the home loan EMI, you must pay Property tax each year which also varies from place to place. If you put the house on rent, then you must pay the tax on income too on house property.
Home Loan Interest
The joint owners might face a significant deduction on interest paid on a home loan, but together they can save a more considerable amount of taxes by availing some amount of deductions every year.
In a financial year, the joint owners can also avail deductions. This can be done by dividing the home loan principal amount of a self-occupied property repaid in the ownership ratio.
House Property Income
The joint owners may divide the income generated from the rent of jointly-owned property. This measure would assist in sharing the tax liability which would have burdened a single earner.
The couple can open a joint account and put all their savings to pay back their home loan. Or else, claiming tax benefits could get troublesome for them. Other than the benefits, first-time buyers can claim additional deductions from their taxable income.
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