Buying Property in the Wife’s Name
Sep 09, 2016 Home Trading Steps
Are you thinking about buying property ? Buying property is a very crucial and every aspect of the purchase must be considered cleverly to get the best possible deal. The most aspect of buying property is to decide that who is going to be the owner, i.e. you, your wife, or your mother.
We cannot neglect the fact that making your wife as the will have its list of benefits like impressing her and your in-laws. You will also as an influential male in an equally traditionalist and masculine society. If these points are on top of reasons due to which you are buying the property in your spouse’s name, then you are making a smart decision by doing it. you are doing it for financial reasons such as tax rebate, then you should reconsider your decision and study the advantages and disadvantages appropriately.
To help you out in finalizing this decision, we have noted down, then major pros and cons of buying property inthe wife’s name.
Benefits of buying property inthe wife’s name:
Stamp duty concession:
A particular stamp duty is imposed for registering property, and the calculation differs from state to state. Stamp duty is calculated as a percentage of the decided value of the property or its market value, whichever is greater. The stamp duty imposed is lower in some states, if a property is bought in the name of a woman as compared with the duty applicable to a man. For example, in New Delhi, 4% stamp duty levied on women as compared with 6% for a man. This also stands applicable while converting the property from leasehold to freehold. In some parts, the stamp duty also depends on the region in which a sale is accomplished. For example, in Haryana, A man has to pay the 8 % stamp duty in urban areas and 6% in the countryside whereas it is 6% in urban areas and 4% in the countryside for women.
Home loan interest:
The Home loan interest rate is comparatively lower for the woman. For example, State Bank of India imposes 9.50% interest rate on a women customer instead of 9.55% for male . This difference may not look substantial but they make a big deal when the amount is high. An important point to note here is that the banks usually offer lower rates only when a woman is the sole applicant or is the first co-applicant.
Important facts about buying property in your wife’s name:
Relevant tax exemptions and rebate:
In case you buy property in your wife’s name then there are possibilities that home loan is also in her name because many banks usually offer lower rates By this rule, your wife can enjoy a deduction towards interest up to Rs 1.5 lakh per year. Likewise, if you rent out the same property, then also she would be the one claiming the total interest paid towards the home loan. Hence, you cannot access any tax rebates if you buy the property in your wife’s name. This case also stands valid in case you are the co-applicant of the loan because as per the rule co-applicants of home loans are not eligible to enjoy tax concessions.
Possibility of purchased property to be deemed as transaction:
There are high that the in the name of woman will as a transaction which is not legally good for any buyer. The simple solution for this is to gift the amount required to purchase the property so that the buying becomes legal. However, gifting the money to your wife would increase stamp duty, which nowhere solve the purpose of saving money.
Every family's financial and personal requirement is unique; hence, one should evaluate pros and cons of buying property in your wife's name specifically for as per your requirement and situation and then take a well-versed call.
We cannot neglect the fact that making your wife as the will have its list of benefits like impressing her and your in-laws. You will also as an influential male in an equally traditionalist and masculine society. If these points are on top of reasons due to which you are buying the property in your spouse’s name, then you are making a smart decision by doing it. you are doing it for financial reasons such as tax rebate, then you should reconsider your decision and study the advantages and disadvantages appropriately.
To help you out in finalizing this decision, we have noted down, then major pros and cons of buying property inthe wife’s name.
Benefits of buying property inthe wife’s name:
Stamp duty concession:
A particular stamp duty is imposed for registering property, and the calculation differs from state to state. Stamp duty is calculated as a percentage of the decided value of the property or its market value, whichever is greater. The stamp duty imposed is lower in some states, if a property is bought in the name of a woman as compared with the duty applicable to a man. For example, in New Delhi, 4% stamp duty levied on women as compared with 6% for a man. This also stands applicable while converting the property from leasehold to freehold. In some parts, the stamp duty also depends on the region in which a sale is accomplished. For example, in Haryana, A man has to pay the 8 % stamp duty in urban areas and 6% in the countryside whereas it is 6% in urban areas and 4% in the countryside for women.
Home loan interest:
The Home loan interest rate is comparatively lower for the woman. For example, State Bank of India imposes 9.50% interest rate on a women customer instead of 9.55% for male . This difference may not look substantial but they make a big deal when the amount is high. An important point to note here is that the banks usually offer lower rates only when a woman is the sole applicant or is the first co-applicant.
Important facts about buying property in your wife’s name:
Relevant tax exemptions and rebate:
In case you buy property in your wife’s name then there are possibilities that home loan is also in her name because many banks usually offer lower rates By this rule, your wife can enjoy a deduction towards interest up to Rs 1.5 lakh per year. Likewise, if you rent out the same property, then also she would be the one claiming the total interest paid towards the home loan. Hence, you cannot access any tax rebates if you buy the property in your wife’s name. This case also stands valid in case you are the co-applicant of the loan because as per the rule co-applicants of home loans are not eligible to enjoy tax concessions.
Possibility of purchased property to be deemed as transaction:
There are high that the in the name of woman will as a transaction which is not legally good for any buyer. The simple solution for this is to gift the amount required to purchase the property so that the buying becomes legal. However, gifting the money to your wife would increase stamp duty, which nowhere solve the purpose of saving money.
Every family's financial and personal requirement is unique; hence, one should evaluate pros and cons of buying property in your wife's name specifically for as per your requirement and situation and then take a well-versed call.
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