After months of intensive house-hunting, Vaibhav Malhotra and his wife finally found a house that they can call home together. On the day of registration, he decides to register the house in this wife’s name as a surprise for her.
“I could see how happy and delighted Apoorva (his wife) would be.” Vaibhav’s happiness knew no bounds when the registrar informed him that since he is getting the house registered on his wife, Apoorva’s name, he has saved approximately 1.5% of the property cost.
When Vaibhav had previously looked for a home loan and assessed different premiums using EMI calculators online, he did not know that getting a house on his wife Apoorva’s name will save him money. As a social initiative, several Indian states offer women homebuyers discounts on stamp duty to promote homeownership.
Here, we will discuss the benefits of buying a new home in your wife’s name.
1. Relaxation in Stamp Duty
Any charge that is payable on the sale agreement, on or before the date of registration of the agreement is known as Stamp duty. Since it is a state subject, stamp duties are decided by the state government and differ between 4-8%. For example, in Delhi, women pay 4% stamp duty, whereas men pay 6%.
This benefit is also available if you are gifting property to your spouse or your daughter.
2. Wealth tax
Under wealth tax, the property gets treated as the net wealth in the hands of the spouse who owns it. Any income that your wife earns directly or indirectly from the property gets clubbed to her income and will be taxed accordingly.
A more straightforward way to avail benefits is to show that the husband has gifted money to his wife to buy the property. In case you, being the husband, already own several assets, registering the house in your wife’s name will reduce the wealth tax liability. One of the most apparent tax benefits, when you register the property on your wife’s name, you receive an extra deduction of interest up to Rs 1.5 lakh every financial year.
Lower Interest Rate on Home Loans
For women borrowers, numerous leading banks offer lower interest rates on a home loan. Although you can easily find the women-friendly home loans, it is crucial to make sure you choose a reputable bank or other financial institutions to take the required loan. You can also use online EMI calculators to check the approximate EMIs for a specific loan amount.
Points to Remember If You Are Buying A Property on Your Wife’s Name
- Your spouse should have a source of income – direct or indirect, to buy a property. Without a steady source of income, the property gets considered as your asset.
- If you and your spouse bought the property with joint funding, then the rental income generated from the property will appeal to get taxed for both the co-owners separately.
- If your wife does not have any source of income and use your wife’s name to buy a property, it gets deemed as a Benami transaction.
- If the husband sustains business debit or loss, the house that is registered in the wife’s name cannot be attached to cover the damage.
- Joint ownership is beneficial if both the spouses take home loans as each can claim a tax deduction for the loan interest paid.
- To assess your repayment capacity, using EMI calculators online can be of great help.
Take A Smart Step Towards Your Dream Home
In today’s world, property costs are incredibly high. But having a house that one can call home is everyone’s dream. For most of us, buying a house with just our savings is almost impossible.
The only option that helps us buy our dream home is by availing for a loan. A home loan enables you to purchase a home for your family that you can call your own. You can use an online home loan EMI calculator by highly regarded financial institutions such as Axis Bank to evaluate your repayment capacity.
Every family’s financial and personal dilemma is unique. Hence it will help if you weigh the advantages and disadvantages of buying on your wife’s name specifically for your needs and situation and then make an informed decision. So, do not negotiate with your personal goals and aspirations and make sure to understand the repayment and cost details before borrowing a home loan.