Can we buy part property from own parents

mittalsk · 03-26-2008

Hi,

With the new financial year on start and the tax slab increased, I am thinking to buy a house in my name in order to save tax.
However the city live and work (Bangalore) the real estate is too much hyped due to culture & NRI buy outs, etc.

Hence, I thought that if I buy a reasonable priced property in my home town and then clicked on the idea of why not buy the first floor from my parents themselves who have a 3 storied independent house in our home town.

Please let me know if there is any provision to buy the part property from your own parents and then take bank loan for the same and enjoy tax exemption on the repayments.
In that scenario, since I would be staying in Bangalore on rent, then would I be able to enjoy the HRA exemption as well.

I think its all legal and clean.

Please let me know soon.

Thanks a lot,
Sanjeev

tanmaysnv · 01-21-2010

The answer is that you can do this but youll need to derive income from the property in order to claim a tax deduction for the interest. That means that you cant have equity in the property as rent;its got to be rent so maybe treat the rent as a loan and that means they wont be paying you so youll have to work out how to pay the mortgage back on your existing income without rental income and then at some stage convert the loan to equity

khelzy09 · 02-07-2010

Quote:

Originally Posted by tanmaysnv

The answer is that you can do this but youll need to derive income from the property in order to claim a tax deduction for the interest. That means that you cant have equity in the property as rent;its got to be rent so maybe treat the rent as a loan and that means they wont be paying you so youll have to work out how to pay the mortgage back on your existing income without rental income and then at some stage convert the loan to equity

tanmaysnv is right
i agree of what he said..

03-26-2008	#1
mittalsk New Member Join Date: Mar 2008 Posts: 1	Can we buy part property from own parents Hi, With the new financial year on start and the tax slab increased, I am thinking to buy a house in my name in order to save tax. However the city live and work (Bangalore) the real estate is too much hyped due to culture & NRI buy outs, etc. Hence, I thought that if I buy a reasonable priced property in my home town and then clicked on the idea of why not buy the first floor from my parents themselves who have a 3 storied independent house in our home town. Please let me know if there is any provision to buy the part property from your own parents and then take bank loan for the same and enjoy tax exemption on the repayments. In that scenario, since I would be staying in Bangalore on rent, then would I be able to enjoy the HRA exemption as well. I think its all legal and clean. Please let me know soon. Thanks a lot, Sanjeev

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01-21-2010	#2
tanmaysnv New Member Join Date: Jan 2010 Posts: 8	The answer is that you can do this but youll need to derive income from the property in order to claim a tax deduction for the interest. That means that you cant have equity in the property as rent;its got to be rent so maybe treat the rent as a loan and that means they wont be paying you so youll have to work out how to pay the mortgage back on your existing income without rental income and then at some stage convert the loan to equity