You’ve probably heard stories about first-time homeowners registering their properties in the names of their wives. While this is undoubtedly an act of empowerment, it also has numerous advantages, particularly if you expect to obtain a home loan. Aside from giving your wife a significant asset registered in her name, there are a few other benefits to purchasing the home in her name.
Advantages of a home loan
The rate of interest is the most important thing to consider when looking for a house loan. If your wife is a working lady, she can get a home loan and take advantage of special home loan perks for women. The majority of banks charge women borrowers a lower interest rate.
For example, the interest rate on a home loan for working women can be as high as 8.55 percent, whereas it is 8.60 percent for their male counterparts. In addition, if a woman is a co-applicant, the lower proportion can be redeemed. As a result, it is extremely advantageous for people who want to take out a home loan to do so in their wife’s name.
Benefits from a home loan in terms of taxes
Another advantage of purchasing a home in a woman’s name is the tax benefits available to her. If the property is self-occupied, women property owners will be eligible for an additional interest deduction of up to Rs 1.5 lakh every financial year.
Fees for stamp duty
Women property owners in several places of India pay a lower stamp duty than men. While the actual ratio varies by state, an increasing number of states are embracing this concept to empower more women property owners. For example, in Delhi, men pay a 7% stamp duty, while women pay around 5%.
Other states are setting an example, with Jharkhand being one of them. In this state, female property buyers will have to pay Re.1 in stamp duty. This can be a significant financial benefit for someone who is paying for a home, thus registering the property in a woman’s name is a good option.
Let’s have a look at some additional essential considerations.
In order to own a home, the lady must have a source of income. The property will be deemed an asset if there is no regular income.
If your wife is a stay-at-home woman, registering it in her name can result in a Benami transaction, making the entire procedure more difficult. In this circumstance, it is preferable to choose co-ownership to avoid any difficulties.
If your wife does not have a steady source of income, she may not be able to obtain a home loan at all, as most banks will not lend to someone who does not have a steady source of income.
The rental income earned from the property will be taxed individually if you both combined your income to buy the property. If the lady is a stay-at-home woman who did not contribute financially to the purchase, the rental income is shared with the husband’s and ordinary taxes are applied.
Even if the property is registered in his wife’s name, the husband is equally responsible if there is a future dispute over the property.
We hope that the preceding information has given you a better understanding of the home loan benefits, tax benefits on a house loan, stamp duty benefits, and other advantages that come with registering property in a woman’s name.