Purchasing a home in your wife or mother’s name has numerous advantages. It is regarded as one of the smartest moves. There are many advantages associated with it in India, Including lower loan rates, interest rates, stamp duty exemptions, tax exemptions, and a variety of rebates.
This is why several home buyers nowadays register their property in their wive’s names. It is an act of women empowerment that the government has been trying to push for long. And doing so provides significant benefits to home buyers as well.
The advantages usually differ from one place to another, depending upon the ownership status. Whether the woman is a sole or joint owner. Nonetheless, it provides your wife or mother with a valuable asset. So, take a good look at some of the benefits of buying a residential property in a woman’s name.
Buying Property in a Woman’s Name
Here is a short list of what you can expect to get in exchange.
- Savings On Tax: Both of you can apply for tax deductions under Section 80C of the Income Tax Act from your taxable income if you go for joint ownership. However, the deduction will depend upon the ownership share between the two of you. Joint deduction In case of equal ownership is up to Rs 1.5 lakhs yearly. This can be availed on the principal of your home loan. Another joint deduction of up to Rs 2 lakh can be additionally claimed on the interest of the home loan. Then there is more in case the woman is the sole owner and a first-time buyer. An additional Rs 50,000 for the principal of the housing loan under Section 80EE can be claimed. It is therefore a good objective to sort out the ownership status based on additional loan tax benefits.
- Low-Interest Rates: The rate of interest on your home loan is the topmost factor to consider while buying a home. Your wife can avail of a home loan and enjoy interest rate discounts exclusive to women if she has a source of income. And many Indian banks provide an additional discount of up to 1% to women applicants. However, the percentage of discount differs from one bank to another. And then the Pradhan Mantri Awas Yojna (PMAY) government scheme will additionally let you enjoy a subsidy of 6.5% for a term of 20 years.
- Reduction In Stamp Duty: This is the single largest expense of a home buyer. It comes next to the actual amount of the home loan. Stamp duty usually is around 4% of the total value of the property. And the government scheme of things provides concessions of up to 2% to women on stamp duty. Although this percentage appears to be small, it can be a large amount in terms of the total value of the property. The exact amount of the discount will invariably depend on the location of the property.
- Deduction On Rental Income: You will be happy to know that you can claim tax deductions on your rental income if you have rented it out. Moreover, women can have interest deductions on interest paid on loans against rental value, when they rent out the property. This is over and above the standard 30% deductions normally provided on rental income.
- Obtaining A Financial Cover: It is a great idea to buy a home in a woman’s name. Eventually, it secures you financially. Your home is a major asset and can normally be seized to recover losses in case of bankruptcy or debt. But then, it cannot be claimed by government officials or creditors if the property is in the name of your wife. However, this is subject to the condition that the woman is not a co-owner or guarantor of any loans acquired by the husband.
- Stress-Free Succession: The succession issue is easily resolved when you opt for co-ownership of a home. It is a practical legally sound solution when one of the parties undergo an untimely demise. And the other partner can normally become the sole owner of the residential property. Thereby, you get to save money on legal assistance as there is no scope for any legal contest over the issue of succession.
- Better Eligibility & Loan Terms: Several financial institutions nowadays require fewer home loan documents and simple home loan eligibility criteria for women. These favorable conditions make home loans easily available for women along with streamlined repayment conditions.
Then there is more to joint ownership of residential properties beyond tangible benefits. It also serves as a symbol of the shared happy lives of the couple in their safe haven. Additionally, it also provides them with a sense of security towards each other. Any relationship will reach new heights of love and respect when there is so much to share.
Points to Remember
Here are some points that you should unfailingly remember while buying property in a woman’s name. It will ensure that you do not get caught unawares at a later point in time.
- It is important that the woman should always have a source of income to individually claim tax benefits.
- The property will eventually be divided based on the sale deed in case of divorce.
- You will be taxed as per the gain on your income in case of joint ownership.
- The husband will be jointly responsible even if the woman is the sole owner in case there are any legal hurdles in the future.
- Take note that the financial institutions will not provide a home loan to a woman with no source of income.
The Final Outcome
Involving a woman in the ownership of your residential property eventually turns out to be beneficial. Irrespective of whether the woman is single or married, there are numerous benefits that can be derived. And more so if the woman has a source of income. In any case, she gets to have most of the pie.
Nevertheless, women can still claim some of the benefits at the time of purchase in the absence of a source of income. And we should also be striving for the empowerment of women in a vulnerable society as such.
Dreams Come True @ Vertex Homes
If you are an aspiring female homeowner or a loving husband, then Vertex Homes is here to help you fulfill your dream. We believe women empowerment is your right and have started a movement to encourage more female homeowners through our counseling.
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