Buying a property is one of the biggest financial decisions in our lives. Some home buyers look at the option of buying a house in the name of the lady of the house. Be it for lady luck, or for some financial benefits, buying a house in the wife’s name comes with multiple benefits.
Here are some of them (you can now tell your spouse).
A Boost to Women Empowerment
Women empowerment is a word that is bandied about a lot today. But not many individuals are as open to the idea. With a house in the name of the wife, chances are that she would seek a joint home loan, which adds a dimension of joint participation to financial planning. This also creates a sense of financial security for her.
Lower Home Loan Interest Rates
Banks offer lower home loan interest rates for women applicants. For example, consider a home loan amount of less than Rs. 1 crore. As on June 2018, interest rates for women home loan borrowers offered by SBI, ICICI Bank, and HDFC bank were 8.45-8.95%, 8.55-9%, and 8.5-9.15% respectively. This compares favorably to interest rates of 8.5-9%, 8.6-9.05%, and 8.55-9.2% respectively for all other applicants. That’s one more reason for buying a house in the wife’s name!
Lower Stamp Duty and Registration Charges
In order to promote women empowerment in the real estate sector, many state governments provide some sops. For example, they may offer discount on stamp duty and home registration charges for female owners. So by buying a house in the wife’s name, you can look forward to discounts towards stamp duty and registration charges. This can significantly bring down the overall cost of ownership for your house.
For example, in New Delhi a female owner has to pay a 4% stamp duty charges as compared to 6% for a male owner. Likewise, the stamp duty charges for female owners in urban Haryana in 6% compared to 8% for their male counterparts.
In case of joint purchases, both husband and wife are entitled for tax deductions for the home loan. Also, if the house bought is rented out, the rental income is an income for the wife. This is applicable if she is not employed or if her income is below the tax brackets. This way, it eliminates an additional tax burden of second income from you.
High Loan Amount
A joint home loan also allows for a higher quantum of home loan as the final loan eligibility amount is calculated after clubbing of both husband’s and wife’s income.
For example, if the husband is earning Rs.80,000 a month, he’s eligible for a home loan of 40 lakhs. Now, let’s assume the wife is earning Rs.60,000 per month. Combined, their loan eligibility will become 70 lakhs*.
(*Calculation arrived by taking interest rate at 10.5% and 20 years tenure)
Safeguard Against Business Debt or Loss
Buying a house in the wife’s name also safeguards the house from being attached in the event of any severe business loss, bankruptcy, or un-mounted debts. The house in wife’s name cannot be legally attached by debt collecting agencies. This provides an additional blanket of security for the worst case scenario.
So, buy that home property in the name of the lady of the house either as an individual owner or a co-owner – it is a great move that can be a win-win for all.