Buying a property is a very big decision, it involves days of online research and then again months of house-hunting. After liking a certain house/apartment, you need to think about the price of the property, your financial status, legal documents and financial liabilities. However, youngsters and many newly-married couples are keen on buying a new property either for investment or to call them their own. It is an asset and involves a huge investment. Spending such a huge amount of money at one go can be quite overwhelming, but let’s try lightening up things a bit. Here’s an idea, why not buy the house in your spouse’s name? It can be a touching birthday or anniversary gift for her. Consider giving her the ownership of the house, make her proud and happy.
Also read: Factors to consider while buying a property
However, you can reap a few benefits through her surprise. Let’s give you detailed information on how you can be benefited if you buy a property in your wife’s name.
There are property rules in different parts of India that offer more financial benefits in terms of stamp duty charge and home loan interest rates. By this, you will be able to save some amount of money on the total property cost. Isn’t that great news? These steps are taken by the Government to encourage home ownership among women and also to boost women empowerment.
Shaving off Stamp Duty charge
Stamp Duty is a charge that must be paid to the Government when you are buying a property. This charge is payable on the sale agreement and can be paid on or before the registration. The percentage to be paid is determined by the State Government and varies between 4% – 8%.
But if the property is bought in the wife’s name, then you can benefit up to 1 – 2 % on the stamp duty.
For example, in Delhi, the stamp duty charged is 4% for women against the property cost, while it is 6% for men. Similarly, in Haryana, a woman has to pay 4% for rural areas and 6% in urban areas, compared to men who pay 6% in rural areas and 8% in urban areas. In Rajasthan, there is a 1% difference with women paying 4% and men paying 5%.
Discount on Home loan Interest rate
Not just on stamp duty charge, several banks like SBI, HDFC, Canara Bank, ICICI and some others offer a discount on the interest rate if the house is registered in a woman’s name and she applies for the loan rather than a man.
|Bank||Home Loan interest rate for everyone (%)||Home Loan interest rate for women (%)|
|SBI||8.9 – 9||8.85 – 8.95|
|HDFC Bank||8.85 – 9.35||8.8 – 9.3|
P.S., All these above-mentioned interest rates are applicable to the loan amount above 30 lakhs. All mentioned percentage of interest rates are as on April 2019.
Exemption on tax
Many young professionals and couples buy a house to get some exemption from the huge amount of tax levied on them. If a woman is a taxpayer and the sole owner of the property, she can enjoy a 2 L deduction every year towards the payment of a home loan. However, if both the husband and the wife are co-owners of the property, both can claim a deduction in tax rate (proportionate to the share of ownership carried by each).
Other benefits on Tax:
- If the husband is self-employed and has incurred a debt or loss in business, then the property if registered in the wife’s name, cannot be attached to cover the losses
- Making your wife the co-owner of the property, also known as ‘joint ownership’ is beneficial if both the partners have an independent source of income, as both can individually claim exemption in tax for the interest paid on home loan
- If the husband owns some other assets too, registering property in the wife’s name will reduce his wealth tax liability
So, it seems beneficial to buy a property in your wife’s name only if she has a reliable source of income, otherwise, it will be termed as a benami transaction. Couples looking for some respite from the high annual tax will be benefited if wife’s name is associated as a co-owner.
Also read: Advantages of living in a Gated Community