todd 28 April 2015

Buying property with mom

Hello

I am 28, already engaged and scheduled to marry this year-end in December. Before my marriage, I intend to buy a home.

My mom has an existing residential flat which we do not use much (in her and my dad's name). They wish to sell it ASAP (as there are some issues there) and requesting me that I use up the proceeds of the sale (to avoid capital gains) when I buy my new home and register the new flat in my and mother's joint name. The issue is that my new home will cost Rs. 100 and the proceeds of my mom's flat will fund only Rs. 20. The rest Rs. 80 will be funded by me, through a combination of my savings + home loan.

My questions are:

1. I have a younger brother who is currently unmarried - can he lay claim to the flat, since my mom will be a joint owner?

2. Is it better strategy to fund the house entirely by myself and remain the 100% owner, to avoid future inheritance issues?

3. Is there a way my mom can save on the Capital gains, and we can avoid further complications in case we buy the house jointly.

Thanks for your patience in reading this.

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2 Replies

Jatin Mittal (Corporate Lawyer) 28 April 2015

If your mother is investing Rs. 20 then actually she is the 20% owner and has the right over 20% of property and she can give that share to anyone she wants. Your brother may make a claim only if your mother passes away without making any will or transferring that share to anyone. If you can tell me the state in which you are planning to buy the house, i can help you more because there are some useful laws in some states that may solve your problem. Write to me at mittaljets@gmail.com. No charges for the consultation.

Sudhir Kumar, Advocate (Advocate) 05 May 2015

1. I have a younger brother who is currently unmarried - can he lay claim to the flat, since my mom will be a joint owner?

Yes he can ( and will certainly) stake claim on the house. Irrespective whether how much you paid. If the house is held joint name with mother he will have 25% of the same.

2. Is it better strategy to fund the house entirely by myself and remain the 100% owner, to avoid future inheritance issues?

Yes

3. Is there a way my mom can save on the Capital gains, and we can avoid further complications in case we buy the house jointly.

you cannot he your cake and eat it too. You want to save capital gain tax by showing the proceeds to have been used in other property and at the same time you know the danger of buying joint in mother's name.