Are you contemplating moving to a bigger house with your spouse? If the answer is yes, then you’re like most couples who love comfort and space. Like them, you make a conscious effort to meet financial goals to purchase your new home. However, many couples are facing a dilemma when it comes to paying the price for their home. At times only one of the two (either husband or wife) is eligible for a loan, but the loan amount itself may be insufficient.
In this case, the husband can opt for a joint home loan with wife. It solves the couple’s issues, and together they can repay the instalments. There are numerous advantages of a joint home loan. We have listed the four main benefits for you.
Accessible Affordability with Discounts
Property rates tend to be higher in the metro cities of India. Which is why it would make sense to apply for a loan together. With combined incomes of the husband and wife, the joint home loan eligibility is higher.
Not only is the burden of principal and interest repayment lowered but also the pressure to repay the loan is weighed out jointly. Finally, sanctioning the loan is more seamless, as the collateral provided is mutually pledged by the husband and wife.
Numerous banks and Private Lending Institutions offer a substantially discounted interest rate for women applicants. This discount proves to be an immense benefit for a couple whose repayment amount in all likelihood is high. With a low rate, the repayment of equated monthly instalments (EMIs) also reduces.
The typical concession offered on home loans for women is approximately 0.05%. Do check with your lender regarding this benefit when applying for a joint home loan.
Reduction in Stamp Duty
A significant advantage of opting for a joint home loan as husband and wife is the reduction of stamp duty. The Government offers a lower stamp duty rate for women property purchasers. In a bid to promote women empowerment, many states have relaxed rates for women as compared to men. States such as Delhi, UP, Haryana, and so forth have lower stamp duty rates. Maharashtra offers a standard rate for both men and women.
| State | Men | Women |
|---|---|---|
| Jharkhand | 7% | Only Re 1 |
| Delhi | 6% | 4% |
| Haryana |
6% in rural 8% in urban |
4% in rural 6% in urban |
| UP | 7% | Rebate of Rs 10,000 on overall charges |
| Rajasthan | 5% | 4% |
| Punjab | 6% | 4% |
| Maharashtra | 6% | 6% |
| Tamil Nadu | 7% | 7% |
| West Bengal |
5% in rural 6% in Urban (Plus 1% additional if property cost >Rs 40 lakh) |
5% in rural 6% in Urban (Plus 1% additional if property cost >Rs 40 lakh) |
| Karnataka | 5.6% | 5.6% |
Do note the list is an indicative and the rates are subject to change.
Taxation Pros
There are multiple tax benefits to claim when you avail a joint home loan. Section 80 C of the Income Tax Act enables the couple to claim a tax deduction of up to INR 1.50 lacs on the principal amount. Section 24 of the Income Tax Act permits the borrowers a tax deduction to a limit of INR 2 lacs on the interest repayment towards the home loan. The joint home loan tax benefit is claimable as individual taxpayers. So as a couple, they can claim INR 3 lacs under Section 80 C and INR 4 lacs under Section 24. It is a great boon to save money and continually repay the loan. Do note that tax benefits under Section 80 C can’t be exercised for an under-construction residential property.
Succession The succession process to transfer property to next of kin is a drawn-out and time-intensive concern. For a smooth transfer of ownership in the circumstance of a demise of the property owner. It is advisable that married couples jointly own the property. There is no succession issue, and by default, the survivor becomes the rightful owner of the property.
Now that you are aware of the four main advantages of owning property jointly and the joint home loan tax benefit you can enjoy. It is the best option to opt for a home loan as husband and wife together.
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