When purchasing property, an important consideration is whose name to register it in. What happens if you buy a home in a woman’s name in your family?
To increase women’s participation in real estate, the Government of India has introduced home loan benefits for women borrowers. This can also improve the economic status of women and reduce their vulnerability to exploitation. This make real estate a more inviting space for women buyers, urging them to take part in it.
Let us take a glance at the benefits of buying a home in a woman’s name.
Tax exemption and rebate
There is a good possibility that if a property is purchased on a woman’s name, the home loan is also in her name. This is because banks require the loan account to be in the name of the owner. If the property is under a woman’s name, then she is eligible for a tax reduction. If the property bought is rented out then the entire interest paid on the home loan can be claimed as a deduction. If the woman has a separate source of income and she is a joint owner of the house with her spouse, both can claim tax deductions individually.
However, a woman will not be considered an eligible candidate for a home loan by financial institutions if she doesn’t have an income of her own. If a man buys the property in his wife or mother’s name but she does not contribute monetarily to the purchase of that property, the rental income from that property will be treated as his income and will be taxed accordingly.
Discount on stamp duty
Stamp duty is a tax that is levied on any property purchase and is calculated as a percentage based on the market value or the agreed value of the property, whichever is greater. The stamp duty percentage differs from state to state. State governments in India offer a certain amount of discount to women property buyers or to the joint registration where one of the applicants is a woman.
Discount on home loan interest rate
If the property is purchased in the name of a woman then the home loan interest rate is typically lower. Financial institutions offer different interest rates on home loans when a woman is the first co-applicant or a sole applicant.
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