Sibling Co-Ownership: Brothers and sisters are buying a house together, how beneficial is this method of sharing the burden of EMI?

In today’s skyrocketing real estate market, owning a home has become one of the biggest financial challenges for Indian families. Even with a home loan, monthly EMIs and hefty down payments often exceed an individual’s affordability. To overcome this, many siblings are now choosing joint property ownership, where brothers and sisters pool resources to buy a house together.

This trend, known as sibling co-ownership, is not just about finances—it reflects trust, emotional bonding, and long-term planning. But while it offers several benefits, it also comes with risks if not handled carefully.

Why Sibling Co-Ownership Is Growing in India

Rising property prices across metros have made it difficult for single buyers to enter the market. With combined incomes, siblings can:

• Increase loan eligibility: Banks consider the joint income of applicants, improving chances of loan approval.

• Share EMI burden: Splitting the repayment makes the financial load lighter.

• Negotiate better deals: A stronger financial profile often results in better interest rates.

• Invest in larger properties: Together, siblings can afford homes in better locations or with higher resale value.

For example, imagine two siblings in their 30s—Aparajita and Ajit—deciding to buy an apartment in Hyderabad. Their combined savings and joint loan eligibility allowed them to bypass affordability constraints and invest in a home that would have been impossible to purchase individually.

Legal Framework for Sibling Co-Ownership

Under Indian law, brothers and sisters can jointly own property in two primary ways:

1. Tenancy in Common: Each sibling holds a defined share in the property. They can sell or transfer their share independently.

2. Joint Tenancy: The property is collectively owned. If one sibling passes away, their share automatically goes to the surviving co-owners, without requiring a will.

This is governed by the Transfer of Property Act, 1882 (Section 44). Additionally, under Income Tax Act Section 56(2), gifts between close relatives (including siblings) are exempt from gift tax, simplifying property transfers within families.

Mistakes to Avoid in Sibling Co-Ownership

While the idea sounds simple, many siblings make the mistake of relying only on verbal agreements. This often leads to disputes later. To prevent such issues:

• Document everything: Loan repayment duties, default clauses, exit strategies, and prepayment terms should all be in writing.

• Plan for the future: Life changes like transfers, marriages, or financial setbacks can affect repayment. Having a clear plan for refinancing or selling the property avoids conflicts.

• Consider tax implications: Both co-owners can claim tax benefits under Section 80C and Section 24(b). However, stamp duty and registration charges will apply if ownership is transferred later.

• Watch market conditions: Inflation and interest rates directly affect EMIs. Buying at the right time matters.

Emotional Value Beyond Finances

In India, property ownership has always been tied to family bonds. For siblings, buying a house together is more than an investment—it is about creating a shared legacy. It strengthens trust and symbolizes unity, much like the spirit celebrated during Raksha Bandhan or Bhai Dooj.

However, emotional ties must be balanced with financial discipline. A house bought together can be a blessing, but without legal clarity, it may become a source of conflict.

Final Thoughts

Sibling co-ownership can be a smart and practical choice for those struggling with high real estate prices. It provides financial relief, better loan opportunities, and a sense of shared achievement. But it requires careful planning, written agreements, and legal backing.

If you are considering buying a property with your brother or sister, don’t rush. Consult legal and financial experts, clarify responsibilities, and document every agreement. Done right, it can help siblings not only own a home but also build a lasting bond of trust and stability.