With the government’s implementation of the Pradhan Mantri Awas Yojana (PMAY) scheme that provides interest subsidies while making adult female co-ownership mandatory, the incentives for women to become homeowners have increased. You can buy a home in your wife’s name to save money or apply for a joint home loan as co-owners of the property and share the repayment obligation too. Take a look at the benefits that you get when you buy a home in your wife's name or jointly with your wife.
Gain from tax savings
You both can claim tax deductions under Section 80C from your taxable income by creating a joint homeownership deed. The deduction amount will depend on how the ownership share between the two of you has been decided. However, if you both are equal owners on the property, then Section 80C allows you to claim up to Rs. 1.5 lakh in a year for the principal you repay on your home loan jointly. In addition to this, both of you can also claim a deduction of up to Rs. 2 lakh for the interest you repay on your home loan.
In case the home is solely in your wife’s name and she is a first-time home buyer, then under Section 80EE, she can claim an additional Rs. 50,000 for the principal she repays on the housing loan. So, based on the additional home loan tax benefits, decide whether it is better to avail a joint home loan and buy the property jointly or keep it solely in her name.
Additional Read: Tax benefits
Enjoy lower home loan interest rates
Availability of a housing loan under PMAY will ensure you enjoy a subsidy of 6.5% on the home loan interest rate for a term of 20 years. You can avail this scheme by checking the eligibility terms prescribed for the it. Here your wife can take the loan in her name, or both of you can do so by signing in as home loan joint applicants. Moreover, lenders like Bajaj Finserv offer customised Home Loans for Women, which offer women high value at lower interest rates. So get Rs. 5 crore*, and more over a tenure of 30 years, basis eligibility when you opt for this loan.
Pay reduced stamp duty charges
Stamp duty costs are an integral part of the property buying process, not covered by your housing loan. However, the government gives women special concessions on stamp duty charges. So, when your spouse buys a house in her name, she pays 2% less stamp duty than you, which is around 4%. The percentage difference may look minute, but based on the valuation of the property, this is an enormous saving for you. Buying a house in Delhi, for instance, means that you pay 6% stamp duty charges; your wife under the same scenario pays 2% lower stamp duty, i.e., 4%. So, on a property worth Rs. 50 lakh, you end up paying at least 50% more stamp duty compared to your wife.
Additional Read: Home loan without down payment
Now that you know the benefits of having your home in your wife’s name or both of your names, take a look at the few points you should remember before taking a housing loan.
- You can avail tax benefits and deductions for your spouse separately, only if your wife has a separate income and has been filing returns in the past. In case she is a housewife, claiming tax deductions in her name is considered invalid.
- Proof for your wife's financial contributions to buy the house is required if the house is registered in her name.
- In the case of joint ownership, you will have to pay tax according to the gain added to your income.
- In future disputes, your obligations are the same as your wife's, even if the property is registered in her name.
Equipped with this information, evaluate your home buying needs and then complete the purchase with your wife via a joint home loan or register her as a sole owner for the property to save money.
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