Planning to invest in a house? You can get these three benefits by taking home loan in a woman's name
Govt has also encouraged this new wave of development and has devised various concessions/ policies to facilitate smoother access of funds to women investors
Traditionally in most Indian households, a new home is generally funded by a male member of family and registered in his name
Nowadays, women are becoming financially independent and contemplating the decision of investing in their own homes
32 percent of home buyers across are single women further contributing to approximately 74 percent of real estate buying decisions
Thinking of investing in a house? Why not use a little creativity to get a good deal!
Purchasing a home is a very crucial decision for a family. People often plan for years together before zeroing in on a suitable property and end up spending most of their life savings on their new home. While considering different aspects of buying a new house, one criterion that always comes to light is the registration of the property.
Traditionally in most Indian households, a new home is generally funded by a male member of the family and thereby registered in his name. However, with the recent wave of social reforms and women swiftly entering the workforce this notion is steadily changing. Nowadays, it has been increasingly noticed that women are becoming financially independent and contemplating the decision of investing in their own homes.
According to a 2018 Track2Realty report, 32 percent of home buyers across the country are single women further contributing to approximately 74 percent of real estate buying decisions. This is a major development considering the aim of the government was to initiate women empowerment through asset creation, in turn making them less vulnerable to any kind of exploitation.
The government has also encouraged this new wave of development and has devised various concessions/ policies to facilitate smoother access of funds to women investors.
Therefore, buying a house or obtaining a home loan on a woman’s name has a variety of benefits that can make your dream turn into reality without it feeling like it eats the maximum share of your monthly income.
- Lower interest rates for women: Most housing finance institutions provide differential rates for women and other borrowers with almost a difference of 0.5-5 percent on interest rates. Women are offered loans more seamlessly and at lesser rates than their male counterparts. Some housing financial institutions also customise loans for women borrowers as per their goals and income level. Though nominal, a rebate of 0.5-5 percent can make a significant difference when the principle amount involved is huge.
- Tax rebates: Obtaining a loan on the name of a woman or on joint ownership provides an additional tax benefit to the family income than what would be available had the loan been taken traditionally on the name of a man. If the wife has a separate source of income, the deduction available for payment of home loan instalments can be availed by both the partners hence doubling the available tax benefit without any additional investments.
- Stamp duty: Many states also provide a differential rate of stamp duty for properties registered in the name of women and in the name of other owners. This subsidy is provided by the government to incentivise women and encourage more people to buy property in the name of a woman. As long as the property is registered in a woman’s name, home buyers can save a substantial amount of moolah in stamp duty charges. For example, in some states of northern India, the registration rates for women owners and couples is approximately 2-3 percent lesser than the applicable registration rates for men.
These benefits listed above showcase brilliant moves by the government and various financial institutions in the country in encouraging women empowerment and asset creation for women. Financial liberation is not just about earning money but also spending it wisely to ensure yours and your family’s future. While investing in a new home, an investor must also make sure that they get the minute details and documentation right so as to avoid any unforeseen circumstances.
(The writer is Business Head, Home Loans and Home Equity, Tata Capital Housing)
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