Home Truths . Help your father manage his property

With Father’s Day around the corner (June 16), it’s a good time to remember that gifts needn’t be restricted to greeting cards. Moms may usually be the home-makers, but the responsibilities of buying, selling and managing the house and properties often fall heavily on fathers. As a daughter or a son, there are various ways you can support your father in easing his hassles in handling property.

Start early

You can start supporting your father even quite early in your career. One scenario is when your parents have a house and are considering buying another. A motivator for this decision may be tax benefits, especially if your parents are in the high-income-tax bracket. A home loan can get you Section 80C deduction for principal repayment of up to ₹1.5 lakh. The interest paid on the loan is also eligible for tax break of up to ₹2 lakh. Other reasons to buy a house include diversifying investments in different asset classes, or occupying it post-retirement.

You can consider buying the house jointly with your father, if you plan to continue working (and not take a break to study or start a business). This can help him get a longer-tenure loan. The share of ownership can be split unequally based on your cashflow. You can also help with property management, such as renting it out.

If you are an NRI, one favour you can do is to avoid buying a house that your father would end up managing. While he would be very much capable of doing it, it adds to his work and increases his stress over the long term. And in the current housing market, it may not even give good returns, especially after adjusting for currency movement.

Post-retirement

When your father retires, your parents might have to take some housing-related decisions. For example, your parents may decide to settle in a different location, or they may consider moving to a senior living community. You can help your dad think through the process, as it is often an emotional decision which should also be practical. For example, legal and financial terms in many of the senior living communities can be confusing and you can help ensure that your parents understand the nitty-gritty.

It is also good to have a broader discussion on finances and how he plans to manage retirement, as it will enable taking the right decisions on housing assets. For instance, if there are no regular monthly inflows from, say, pension, it might make sense to reduce assets and create cashflow. You can guide them while working with a financial advisor to invest in schemes such as the Senior Citizen Savings Scheme or Pradhan Mantri Vaya Vandana Yojana that give regular interest payment.

Likewise, moving to a senior living community would require ensuring your parents can pay monthly maintenance charges (which will likely continue increasing due to inflation).

This may also be a good time to create a will and ensure that any inheritance issues for properties are settled. The discussion can also include any property or money he wants to donate to charity. You may learn of properties that he may have inherited — or supposed to inherit — that have issues or disputes. It may be a good time to work with him on these, with professional support as needed, to find a good solution.

If you are an NRI, it may also be prudent to discuss long-term residence options with your dad. As moving to a new country requires processes that may take a few years and is best done when younger, it is good to get started early. If the decision is to relocate, you can suggest selling properties, as managing them from out of the country can be a huge hassle. When your father sells a property for a profit, he may be tempted to reinvest in another house to avoid long-term capital gains tax.

You can suggest investing in notified capital gain bonds issued by the Centre (limited to ₹50 lakh per financial year). These provide better liquidity.

Later years

As your father ages, there may be more you would have to do. Paying property, water and other taxes can be one simple support. In many States, these payments can be done online, easing the process. Getting property and other documents in order would be another valuable help.

The house your parents live in would also be ageing and may start to pose hazards. For example, there may be stairs in the house without handrails. Often the location of wash basins, counters or storage may require stretching or bending to reach them. There may also be security/structural risks. You can do a complete evaluation of the house to ensure it is senior-proof and thus reduce preventable falls and hazards.

Based on the health of your parents, it may make sense to reconsider housing choices. For example, an independent house may be better-off redeveloped. Your father may start to prefer low-maintenance options such as renting and locations with better healthcare and family support. When he is unable to decide, you can help him prioritise between comfort and finance.

The writer is an independent financial advisor

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