5 Advantages of Purchasing a Home by Wife’s Name
May 23, 2018 Home Improvement
Anchor : Onal Kothari
With several states in India offering benefits for women property buyers to boost their empowerment, we examine why it makes financial sense to register a property under a woman's name :
- The Tax
The very first and foremost noticeable benefit is in terms of tax. The interest rate can be deduced up to 1.5 lakh every financial year when the house is under the sole ownership ofa woman. If house is owned by a husband and his wife then the tax benefit will depend on the ownership share of both of them individually as well as the source of income of woman where they can claim tax deductions individually. - State Government discounts on stamp duty
To support the women empowerment further, many state governments in North India offer benefits on stamp duty like partial waiver if property is registered under a woman's name. Joint ownership and sole ownership both can claim this benefit. The property bought under woman's name cannot be claimed in case of loss. 1%-2% stamp duty is the margin followed by many states. For example : The stamp duty rate for men is 6% while for women is only 4%. The 2% difference in rate is followed in Haryana as well though it splits under rural and urban areas.
For example : In Delhi Stamp duty charges for Women – 4% Vs Men 6% , For Haryana its 4% in rural areas and 6% in urban areas for women, while 6% in rural areas and 8% in urban areas for men - Discount on home loan interest
Bank sector offers special discounts to women borrowers who apply for home loans. The prevailing interest rates for women borrowers for amount less than 1 crore is mentioned below. The popular SBI Banking system takes 8.35 – 8.85% interest for women borrowers while grabs 8.4 – 8.95% from others. These system has been followed by many other popular banks as well. - Bonus : Point to remember
It is a good investment to buy a home in the name of woman in the family or in co-ownership. However, please notice that the wife can enjoy the tax benefit, only if she has a separate and genuine source of income. - Facts you should know before buying property in the wife's name
Buying a property, even in the name of wife, cannot be done blindly. There are certain actions that can be deemed as case of tax evasion and may cause trouble in the long run.
For example:1. The wife should have a source of income to buy the property. If the husband is showing her assets as zero and absence of any source of income, then the property is said to be the outcome of his income and thus, he cannot avoid tax.2. If both husband and wife are earning and have pooled in their money to buy property, then the rental income generated from such joint ownership will attract tax for both the co-owners separately.3. Wife can enjoy tax benefit only is she has separate source of income. Moreover, loancompanies or bank may refuse to sanction loan to the wife if there is no source ofincome generated by her.
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Alok Bhagat
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