By Atul Monga
Imagine a context – two siblings Aparajita and Ajit, both in their early 30s decide to pool in their savings and buy an apartment in Hyderabad. It is more than a transaction. It is a tangible manifestation of trust, aspiration and shared responsibility. Their collaboration empowered them to circumvent the affordability barrier, achieving homeownership more confidently with emotional resonance.
Interestingly, in today’s dynamic economic and real estate landscape, siblings’ stand is gradually redefining homeownership in India— as a strategic decision.
Folks Building Lasting Legacies
As property prices soar, several Indians find the idea of solo homeownership elusive, hence are resorting to innovative solutions. Pooling resources improves credit eligibility, allows better negotiating power and reduces property acquisition timelines. When both siblings qualify as co-applicants, their combined income can improve their home loan eligibility, if planned strategically.
Co-owning residential property by siblings is permitted within the Indian legal framework under two distinct modes – Joint Tenancy or Tenancy in Common—as delineated under Section 44 of the Indian Transfer of Property Act. The Indian Tax Law, Section 56 (2) of the Income Tax Act, exempts gifts between close family including siblings from taxation.
Joint Home Loan With Sibling – Mistakes To Avoid
Since home loans involve larger sums of money, one needs to be careful and not get carried away by emotions. Clear communication and robust paperwork are non-negotiables even with a sibling.
Avoiding Clause Definitions in Writing
A great bond between siblings is supporting each other – even in times of financial crisis. However, it’s irrational to assume that verbal understanding will suffice and/or one sibling will make repayments.
Documenting everything – from contribution, handling defaults, prepayments and exit strategy is essential to avoid any future miscomprehension.
Ignoring Future Scenarios
Life is never a straight line. Circumstances change often reflecting shifting priorities. Relocation, marriage or even sudden financial setbacks can impact joint-home loans repayments. In absence of a pre-agreed strategy, things can go downhill leading to defaults, tense relations or even selling off the property forcibly. Lay down in paper scenarios like loan refinancing, buying out other’s shares or selling off the property completely. Such foresight will help prevent conflicts that may (if at all) arise later on.
Celebrating Co-ownership
In a country like ours, where family bonding is the nucleus to its social mores, purchasing real estate with a sibling can be a powerful move, often reflecting close familial ties especially commemorating events like Bhai Dooj and/or Raksha Bandhan that honour sibling bonding. Therefore, buying a property with your sibling is more than asset acquisition – it’s a testimony of trust and mutual inspiration.
Emotional camaraderie must be supported by financial foresight, legal accuracy and clarity. Siblings can be encouraged to avail joint home loans that are firmly grounded on clear documentation, common vision and financial foresight. Sign up for a joint loan with a sibling —not hastily, not vaguely—but with robust documentation, mutual vision, and pooled-in accountability.
(The author is CEO & Co-Founder, BASIC Home Loan)
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