The Top 3 Benefits of Buying a Home in Your Spouse’s Name

After months of house-hunting, Karthik Rajesh and his wife finally found a home that they would like to call theirs. On the day of registration, he decided to register the house in his wife’s name to surprise her.

“I could see the sense of pride and happiness on Aishwarya’s (his wife) face.” Karthik’s joy knew no bounds when the registrar told him that by doing so, he had saved about 1.5% of the property cost. Yes. To promote home ownership among women, several Indian states offer women homebuyers a discount on stamp duty.

In this post, we discuss some other benefits of buying a property in your spouse’s name.

Relaxation in stamp duty

Stamp duty is a charge payable on the sale agreement, on or before the date of registration of the agreement. Being a state subject, it is fixed by the state government and varies anywhere between 4 to 8%. (You can read more about stamp duty here.)

In some states, women homebuyers get a discount on the stamp duty rate. This is, precisely, why many homebuyers get their property registered under a woman’s name.

For instance, in Delhi, a woman needs to pay 4% stamp duty while men need to pay 6%.

You can also avail this benefit when gifting the property to the spouse.

At times, there are instances when you cannot register property in your spouse’s name. In such a scenario, we suggest you apply for joint registration. Some states offer 1% discount on stamp duty in such cases.  Additionally, both partners can also avail tax benefits on a home loan.

Also, if the property is rented out, both the husband and wife can claim the interest amount.

Wealth tax

When it comes to wealth tax, the property is treated as net wealth in the hands of the spouse who owns it. Thus, merely registering the property in your wife’s name is not enough. The income earned directly or indirectly by your wife from the property will be clubbed with your income and will be taxed accordingly.  

A simpler way to avail benefits is to show that the husband has gifted money to his wife to buy the property.

In case the husband already owns several assets, registering the house in his wife’s name will reduce his wealth tax liability.

One of the obvious tax benefits is an extra deduction of interest up to Rs 1.5 Lakh every financial year. If husband and wife are joint owners, and if the wife has separate earnings, then they can both claim tax deductions individually.

Lower interest rate on home loans

Several leading banks also offer lower interest rates on a home loan for women borrowers. The ongoing interest rates for women borrowers are as mentioned below:

(Note: The interest rate mentioned above are for a loan amount of up to Rs 30 Lakh)

Point to remember if you are the husband

• As mentioned above, your spouse should have a source of income to buy a property. In the absence of regular income, the property will be considered as your asset.
• If you and your spouse have jointly put in funds to buy a property, then the rental income generated from the property will attract tax for both the co-owners separately.
• If you use your wife’s name to buy a property (while she doesn’t have a source of income), it can be deemed as Benami transaction.