The government of India and the state governments have been introducing amendments and rolling out new policies for women empowerment. The additional benefits offered for women entrepreneurs, homebuyers, investors etc are expected to render more space to women in the public arena. For example, if one opts to buy a house for sale in Angamaly in the name of a woman in that family, they will get some benefits from it and thus enhancing the prominence of women in society.
We have examined both the advantages and disadvantages of buying a home in a woman’s name. This blog is intended to deliver a clear picture of it and guide you concerning the way ahead.
- Reduced Home Loan Interest Rate
Women homebuyers can enjoy a reduction of around 0.5 to 1% in the home loan interest rate. Most of the banks including HDFC, SBI, ICICI and Canara offer this discount. So that obtaining a home loan in a woman’s name can fetch a good profit to the lender on the total interest payable.
- Additional Income Tax Benefits
The Income Tax department offers additional tax rebates to women. The savings based on tax rebate will be around 1.5 lakhs each fiscal. However, the house must be self-occupied. In case of a joint loan by employed husband and wife, both could claim the tax exemption.
- Stamp Duty Discounts
Many North Indian states give around 1 to 2% discount on stamp duty if the property is in a woman’s name. Therefore, the financial benefit will vary depending on the price of the property.
Things to Keep in Mind While Buying Homes in Women’s Name
Buying and registering a home or property in a woman’s name may sound simple. Nevertheless, it has some drawbacks as well. Individuals must understand the repercussions or issues that may turn problematic in future. And decide only after detailed contemplation and discussion only.
- Woman’s Source of Income – The foremost thing the person thinking of buying a home in a woman’s (normally wife’s) name is that she should have a regular income. Buying a property in the name of an unemployed woman (a homemaker) may turn complicated. First of all, it will be considered as a Benami transaction by the authorities. The applicant/ spouse will then have to submit the source of income and furnish other requisite details sought by regulatory agencies including Enforcement Directorate and Income Tax department.
- Moreover, if the woman doesn’t have a source of income, the property or home will be an asset. The income tax rebates may not be applicable in such a scenario. It will be better to register the property jointly during the afore-mentioned condition.
- In Case of Divorce – In case of a divorce the property will be divided equally as mentioned in the property documents. The husband cannot claim complete ownership even if the wife doesn’t have any financial contribution during the purchase. Therefore, go ahead with buying the property in the wife’s name only if you are on good terms and there are fewer probabilities for a tussle.
- Difficulty in Processing Home Loan – Most of the banks in India approve the loan only after considering the prime factor, i.e. monthly income of the applicant. If the woman is not employed or doesn’t have any income, she may not be eligible for a home loan. The banks may reject loan applications outright. Applying jointly may be a solution, here as well.
- Disputes in Future – Property disputes with neighbours, third party or the authority is a possibility. Even though the property is in the wife’s name, the husband is equally responsible during this situation.
- Filing of Income Tax – We have seen the tax exemption scenario wherein both husband and wife are employed. However, if the wife is not employed and the house is rented out, the rent will be added to the husband’s income. The income tax must be calculated accordingly.
The Conclusion
It is always beneficial to buy a home in a woman’s name. At the same time, one must understand the laws of the land and existing regulations regarding income tax before pursuing the same. It is not advisable to register a property in the wife’s name, in case she is neither employed nor has any source of income. By linking Aadhar to a bank account, as well as linking Aadhaar with PAN (Permanent Account Number), the financial regulatory bodies in the country can identify suspicious transactions easily.
Women, who are self-employed, employed, or entrepreneurs can go for buying homes in their name without any hesitation. There are no impediments that stop them from realizing their dreams or the right to gain financial benefits from the deal.
Hope that this article has given you an insight into the benefits and drawbacks of buying homes in women’s name. You may reach out to any of the reputed and best builders to discuss further on this aspect. Drop your queries, suggestions, and opinions in the comment box below. Our professionals will be happy to help you.