Co-Owner: What Are They and How to Add One

Good news: It’s never too late to make your spouse a co-owner on your property. Commonly this is done, primarily, to ensure that no conflicts arise during the distribution of property after an owner passes away. If you’d like to do this, you’ll need to obtain a new deed. This new deed must be registered with the registrar’s office, this would give you legal validity under the “Transfer of Property Act”. That does mean that you can’t just proclaim a “co-owner” and think that it is done. Adding your child’s name to the existing deed, as detailed above, means that an interest is created in their benefit. If you’d like to add a joint owner to your property, you can do so with a sale deed or gift deed. A sale deed means that this would take the form of a typical sale, a new deed would need to be recorded, mentioning the portion of the property that is being transferred to the name of the co-owner. This new sale deed would need to be registered with the local registrar. As far as the gift deed, this would be a way that you gift a portion of the asset in question to an intended beneficiary. This would also mean that the registrar’s office would need to obtain the gift deed after it is executed. In all instances you would need to clarify how you and the co-owner would utilize your portion of the property, this would mean that this title that you equally share with your co-owner states how you are holding title together. There are several ways to do so, joint tenancy with rights of survivorship is one way, and this means that if one of you dies the ownership passes to the co-owner. Another way to hold title, in the case of unequal ownership is tenancy in common. This gives no automatic benefit to the co-owner, in the case that there is a death among the title-bearing owners. 

Does adding a co-owner mean anything for my loan? If you’re paying off your loan and planning to add a co-owner you will need to alert your lending bank about it. You will need to create a new home loan agreement, this would need to be registered after paying all dues and charges, like the stamp duty and registration changes. Your lender may insist on making your co-owner a co-borrower, and run their credit as well as do a background check. You may have to pay for this, according to your lender’s policies. As far as your income tax, if you are adding your spouse, you can obtain individual tax rebates, under Section 24 and 80C of income tax law. If you plan on selling the property in the future all co-owners will have to pay capital gains tax, equal to their share in the property. Our Gables Title Group Team is ready to help get you from “contract to closing”.