Table of Contents:
- முன்னுரை
- Pay Less on Home Loans
- Avail Lower Stamp Duty Rates
- Double Your Tax Benefits
- Unlock Government Schemes
- Conclusion
Buying a home is a significant milestone in India, both a major life achievement and a substantial financial investment. With such an important commitment comes the need to maximize savings and make informed financial choices.
Did you know that co-owning a property with a female co-owner can reduce costs by a significant margin? This approach enhances the economic benefits of homeownership, making it a prudent decision for anyone—whether you are a young professional, a homemaker, or a self-employed individual seeking to optimize savings.
In this article, we explore the key benefits of having a woman as a co-owner, helping you get one step closer to making your dream home more affordable.
Pay Less on Home Loans
With interest rates starting as low as 6.95% p.a., many banks offer women a lower margin, typically 0.05% to 0.1% less. While this margin might seem small, the savings can accumulate significantly over the years.
Consider, for example, a ₹50 lakh home loan with a 20-year tenure. At 7% interest, your EMI would have been ₹39,000. But with a 0.5% lower interest rate, the EMI is ₹37,500 instead. Over 20 years, your total savings add up to over 3.5 lakhs, which is a considerable saving.
But this isn’t all.
Many banks offer special schemes to incentivise women homebuyers. Take, for example, the “Her Ghar” by SBI. Apart from a concessional interest rate of 9.40% p.a., the scheme also offers flexible repayment, hassle-free applications, and a higher quantum of finance. The scheme is open to all women above 18 years of age who are Indian citizens, and all co-owners can reap the benefits, even if they are not directly eligible.
Women Power by HDFC also offers a similar scheme that extends its benefits to both professional and self-employed women, offering interest rates between 6.95% and 7.60% p.a.
Avail Lower Stamp Duty Rates
Apart from lower interest rates, jointly buying a property with a woman can save you stamp duty in many states within India. Several states, such as Maharashtra, Rajasthan, Punjab, Odisha, Gujarat, and Uttar Pradesh, offer a 1% lower stamp duty for women. In Delhi, the stamp duty is 2% lower for women. And, in Jharkhand, women only pay a nominal ₹1 as stamp duty.
With a female co-owner, half the stamp duty is lowered, leading to significant savings. For a house worth one crore, for example, the savings could be up to 5 lakhs when you co-own the home with a woman.
Of course, lower stamp duties are subject to state laws, so the availability of this benefit varies across different states in India. However, we can expect the situation to change soon. In the 2024 budget, the government has encouraged more states to lower stamp duties for women, which means these concessions will soon be widespread and will benefit homeowners across the country.
Double your Tax Benefits
Joint ownership allows both co-owners to claim significant tax deductions. Under Section 80C of the Income Tax Act, both individuals can claim an annual joint deduction of up to ₹1.5 lakh on the principal of the home loan. And further tax deduction of up to ₹1.5 on payment of stamp duty and registration fee. This means that where individually you would save up to ₹3 lakh, you now save ₹6 lakhs altogether.
This is particularly advantageous for married couples where both partners are earning and paying taxes. If you live in the home you purchase, you can avail another ₹ 2,00,000 or ₹ 30,000 more on interest under Section 24B of the Income Tax Act. Again, with both owners claiming, your benefits double.
But what if you rent out your home? As co-owners, you make considerable tax savings on the rental income as well. For instance, if both the owners earn ₹ 8 lakh per annum and the property, they jointly own is rented out at ₹ 4 lakh per annum. In this case, only ₹ 2 lakh is added to their incomes. Their individual incomes would be ₹ 10 lakh each, which remains below the slab of 30%. In the same example, if the property were owned by only one of them, the total income of that individual would have become ₹ 12 lakh, pushing the person into the 30% tax bracket.
And whether you rent out your home or live in it, if the woman is a first-time homebuyer, she will gain even more tax benefits. Under Section 80EE, first-time women homebuyers can receive up to ₹ 50,000 in additional tax benefits.
Government Schemes
The Indian government has introduced several schemes and subsidies to promote female homeownership. Prominent among these is the Pradhan Mantri Awas Yojana (PMAY), which aims to provide affordable housing to households with incomes below ₹18 lakhs. While interest subsidy can go up to 6.5% for eligible owners, the scheme can only be availed if the property is owned or co-owned by at least one female. To learn more about the eligibility criteria, you can visit this link.
Several states also run schemes and subsidies to promote female homeownership, although benefits vary from state to state. For instance, in Pune, women property owners can enjoy up to a 10% concession on property tax.
But keep in mind, the benefits and eligibility for these kinds of schemes can differ a lot depending on where you are—even within the same state. So, it’s a good idea to check out what specific incentives are available in your area to make sure you’re getting the most out of them.
Conclusion
Joint home ownership doesn’t just save money; it empowers women and increases their financial security. The experience of buying property in a woman’s name and purchasing a home together can strengthen family bonds or partnerships and create a shared sense of achievement.
Leveraging the benefits of joint home ownership can help you make more informed and financially advantageous decisions, ensuring a brighter future for everyone involved. Happy house hunting!
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