Home Loan on Redevelopment property

Q: Hi, My society is undergoing redevlopment and the property is currently in the name of my parents which are aged 58 & 51 respectively. I am planning to purchase 200 sq ft extra area costing around 45lacs for which we will have to take a loan of 35 lacs. Can i take a home loan without getting the property transferred in my name and claim the tax deductions. Will the bank sanction loan for my parents at this age. any other process can be followed to buy the extra area. Thanks Piyush

piyush goyal,

28th July 2015

Other in Malad East, Mumbai

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Replies (3)

Thanks Ashsish & Deepankar for replying.

Will i or my parents incur any tax liability(Gift Tax/LTCG) apart from stamping & registration cost for gift deed.
Also instead of transferring the property now in my name can my name be added while making redevelopment agreement with builder (as the builder will make an agreement with us for free area and extra area to be purchased).

Thanks

piyush goyal,

29th July 2015

Comment

HI,
Please note that it is mandatory to register a gift deed with the sub-registrar of assurances as per section 17 of the Registration Act, 1908. Otherwise the transfer will be held invalid.

The transfer must be effected by a registered and stamped instrument signed by or on behalf of your father and must be attested by at least two witnesses in accordance with section 123 of TOPA. Stamp duty, payable on the gift deed, is governed by the provisions of the Maharashtra Stamp Act, 1958, since the property is situated in Mumbai.

Deepankar Godbole, Mumbai

6th August 2015

A gift deed needs to be stamped and registered only then it is effective. In case of a will, no stamp duty is required and registration is optional. However, after the death of the testator, the beneficiary will have to procure a probate of the will.

Ashish Bhoite, Mumbai

6th August 2015

Hi Piyush,
The age limit also affects the tenure of the home loan, and EMIs. An applicant's retirement age is also considered. For example, if the applicant is 45 years of age and is set to retire at 60 years, the maximum loan tenure available will be 15 years. Also, in case a bank has a 75-year age limit for a co-applicant, if the applicant is 40 years old and the co-applicant is 60 years old, the home loan will be sanctioned for a maximum period of 15 years only. Better, transfered the property into your name and then go for home loan. Again it depends on your income. If your parents wishes to transfer the house to you then he can do so by executing a gift deed in your favor.

Ashish Bhoite, Mumbai

29th July 2015

Comment

Hi Piyush,
According to the eligibility criteria of the banks, age of retirement is 60 years in case of salaried and 65 years in case of self-employed individuals. In that case your parents are no eligible for home loan because the maximum loan tenure is 20 years. in that case, if your parents go for a gift deed then you have to pay only stamp duty and registration charges. Stamp duty would be 2% of the property's market value.

Deepankar Godbole, Mumbai

29th July 2015

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