Ending a marriage is multifaceted, and determining the family home can also be an important aspect for couples living in India. Because it is such an important grounding and financial security period in a family’s home has a lot of emotional and practical implications. G.S. Bagga & Associates is a family law firm that practices in family law and assisting clients to understand the array of issues connected with divorce and property under Indian laws. In this blog post, we will discuss how the laws in India determine who keeps the family home after divorce, what factors will determine ownership of the marital home in a divorce, and what steps you can take to protect your interest.
Legal Framework for Property Division in India
In India, the distribution of property during divorce is primarily determined by personal laws which are determined by religion, and additionally there are secular laws that apply to a few. The key laws are as follows:
- Hindu Marriage Act 1955: Applies to Hindus, Buddhists, Jains and Sikhs. The Courts will seek some “fair distribution” when considering those who contributed to the family finances, provided care of the children, and on the rights of wives from the perspective of maintenance.
- Special Marriage Act, 1954: Applies to Interfaith or civil marriages. The Courts will seek a fair division of all property without discrimination.
- Protection of Women from Domestic Violence Act, 2005 (PWDVA): A wife may assert the right of residence in the matrimonial home regardless of if she is the registered owner.
- Indian Divorce Act 1869: Specifically for Christian couples, where the Courts have awarded property based on a need basis and contributions.
Key Takeaway: The matrimonial home is frequently treated as a jointly owned asset, especially were purchased during the marriage, but the rights to, or ownership of, the matrimonial home will vary on many considerations including title, deeds, contributions of spouse, and personal laws.
Who Gets the Home After Divorce in India? Critical Factors
Indian courts take a holistic approach when determining who will continue to live in the family home following a couple’s divorce:
- Children’s Welfare: The court will consider having children remain in the family home to maintain interrupted and stable conditions. The parent with custody (usually the mother) will often remain in the home.
- Financial independence: Is either spouse able to afford the upkeep, loans, or taxes on the home without the other?
- Contributions: Non-financial contributions (e.g., childcare and homemakers) can be recognized under legislation such as the Hindu Marriage Act.
- Domestic Violence: Under the PWDVA a wife can have rights of residence to the shared family home, regardless of whether her name is on the deed.
- Streedhan: Woman have a right to claim gifts/assets given before or during marriage as their own property and that can be included in property claims.
Marital Home Ownership After Divorce: Possible Outcomes
- Liquidate the Home and Distribute the Sale Proceeds: Selling the home is common when neither spouse can stay in the home on their own. Here are factors to consider: The market value and capital gains tax (the tax will not apply under Section 54 if the proceeds are reinvested in another property). If the property is joint tenancy, both spouses have to agree to the sale.
- Buyout Option: One spouse (the financially stronger) may buy out the other spouse’s interest in the home. The buyout process would include: Valuation by a professional appraiser. Transfer of the property via a settlement deed, plus taxes and registration fees. Changing the property titles to take the other spouse’s name off the property.
- Temporary Co-Ownership: While less common, ex-spouses could continue to own the home until their children are all of adult age, or until one spouse is in a financial position to buy out the other spouse. There could be complications of one spouse wanting to maintain the home or not agree on repairs, maintenance or listing the property for sale.
Legal and Tax Implications in India
- Mortgage Liability: In the event both spouses are co-borrowers, the lender has the option to hold either of them liable for defaults, notwithstanding any divorce terms.
- Capital Gains Tax: If the property is sold and the proceeds are reinvested in residential property under Section 54, the capital gains tax exemption will apply if the property is reinvested within two years.
- Stamp Duty and Registration: A transfer of the ownership of the home would incur a stamp duty and registration charge, which will vary from state to state (i.e., in Delhi it is 5 – 7%).
- Maintenance Claims: Retaining the home may be relevant to any alimony or maintenance claims made.
How G.S. Bagga & Associates Can Help
Managing property division in a divorce is a complicated process that requires knowledge of the complex laws that exist in India. We help you with:
- Legal Counselling: Helping you understand your rights under Hindu, Muslim, Christian, or civil law.
- Documentation Services: Developing a well-documented record of your financial contributions to the couple’s property, ownership of property, and maintenance needs.
- Mediated Settlements: Helping you reach an acceptable property settlement without an extended litigation process.
- Litigation Representation: Advocating for you and your legal rights in the case of high conflict is possible through litigation.
Final Thoughts
Choosing what happens to marital property in divorce in India requires careful legal planning and compassion. Whether by mediation, buyout of marital property, or litigation; G.S. Bagga & Associates is here to help with customized solutions that will protect you.
Contact G.S. Bagga & Associates today for help with family law! We are pleased to assist you on this difficult journey.
Disclaimer: This blog is for informational purposes only. Consult a legal professional at G.S. Bagga & Associates for case-specific advice.
