Buying A House in your Wife's Name Can be a Smart Move

The hassles of buying a house do not stop at just selecting a good location and finding a compatible deal. It extends to getting an adequate loan with the best possible rate of interest, registering the house after paying a considerable amount for it, and settling down to paying the EMIs that recur every month. Not to worry, for today there are many states that offer lower stamp duty rates for women, while some banks have special discounted rates of interest for women buying houses. Moreover, adding your wife’s name as a co-applicant for a home-loan increases your chances to get a larger sum as loan, provided she has an independent income of her own. In addition, the income tax rules allow women, who have a separate income, and are registered as joint holders in the purchase of the house, to avail themselves of an extra deduction of interest up to Rs. 1.5 lakh every financial year. issues of succession, on death, can also be avoided.

There are many benefits for women buying a house either in her name or as a joint holder. Ashok Mohanani, CMD of Ekta World has this to say, “Aspiring home buyers  can seek certain benefits including tax exemptions, if a home is bought in a woman’s name. Such offer can also attract more women buyers to the realty sector. Encouraging women to register assets in their name, also boosts women’s empowerment.”

Tax Benefits
According to Suraj Nangia, Partner, Nangia & Co., “ From a taxation point of view, a joint home loan is beneficial to all co-borrowers who can claim a tax deduction of Rs. 1.50 lakhs for principal repayment under Sec 80C and Rs. 2 lakh for interest repayment under sec 24. In case of two or more people taking a joint home loan, each of them can enjoy tax benefits under the Income Tax Act in respect of the principal and interest paid during a year, on proportionate basis.”

Discount on Stamp Duty
As a progressive measure to empower women and help them carve for themselves an independent identity, some states are encouraging women to own property individually or jointly by offering lower stamp duty rate by as much as 1 to 2 percent compared to what is applicable for men. There are some other benefits that accrue if a woman is the joint applicant in the home loan. Sushil Raheja, CEO, Raheja Homes Builders and Developers, has this to say, “You can save 1% to 2% on stamp duty, if the property is in a lady’s name. In Delhi and Haryana, the stamp duty rate is 4% for women compared to 6% for men. Moreover, if you are undergoing some financial setback and have some debts to repay, the property held in your wife’s name does not come under the cover for your loss.”

Discount on Home Loan Interest Rates
Some banks have started offering discounted rates on home loans for women. On home loans under Rs. 1 crore, the SBI offers home loans to women at 9.35% in comparison to 9.40% for men. The ICICI bank offers a rate of 9.40% to 9.45% for men. The HDFC bank has set its rate at 9.40% for women whereas the rate for men varies from 9.45% to 10.45%. Companies like Aspire Home Financing Corporation (Aspire), the housing finance arm of Motilal Oswal Financial services have launched a home loan division exclusively for women run by women executives. As the number of independent working women, from across all industries who look at acquiring a home as a tangible and recognizable asset, is rapidly growing, this exclusive product is expected to grow and evolve in the times to come.

Benefits of Succession on Death
Having a home registered on sole ownership basis (in the name of the husband) can lead to major legal hassles in case of the sole owner’s death. Joint ownership with the wife is an effective way to avoid succession issues. Advocate Narendra Vishnu Sankpal of R V Sankpal and Associates explains, “Joint registration of property is always advisable as the spouse is always the successor. This prevents unwarranted problems in future after demise of any person.”