Finance Minister Nirmala Sitharaman refrained from making any major announcements in the interim budget for 2024. However, she highlighted a noteworthy statistic, stating that over 70 percent of houses in rural areas, constructed under the Pradhan Mantri Awas Yojana (PMAY), have women as sole or joint owners, contributing to the enhancement of their dignity. The PMAY mandates that properties acquired under the scheme must be registered in the name of at least one woman in the household. Apart from PMAY, there are additional benefits tailored for women homebuyers that they can explore. Let's take a closer look at these benefits.
Lower stamp duty rates
One of the significant expenses associated with purchasing a home is the stamp duty, which must be paid for property transfers. It is a tax imposed by the state government on property acquisition or transfer, typically borne by the buyer. However, several state governments offer reduced stamp duty rates if the homebuyer is a woman or a joint owner of the property.
For instance, in Delhi, the stamp duty rate for a female homebuyer is 4 percent, whereas, for a male homebuyer, it is 6 percent of the property value. In the case of joint ownership (male and female), the rate is lower at 5 percent. In certain states, stamp duty is nearly zero. For example, in Jharkhand, a male homebuyer pays 7 percent, while a female homebuyer only needs to pay a symbolic Rs 1 as stamp duty.
To illustrate, if you purchase a property in Delhi for Rs 1 crore, the stamp duty for a male buyer would be Rs 6 lakh at 6 percent, whereas it would be Rs 4 lakh for a female buyer. This implies that women homebuyers can save Rs 2 lakh on this amount. Similarly, for a male homebuyer in Jharkhand, the stamp duty cost is Rs 7 lakh, while a female buyer pays only a nominal amount of Rs 1 as stamp duty, resulting in substantial savings. This presents a noteworthy advantage for women homebuyers, on the overall property acquisition cost.
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Rebate on Property Registration Charges
In addition to stamp duty, government authorities levy property registration fees for officially recording the property in the buyer's name. However, in numerous states, women homebuyers qualify for a discount on these fees, providing additional savings. The standard registration fee is usually 1 percent of the property cost, but in certain states, it can go up to 4 percent. Women homebuyers may benefit from concessions in some states.
Concession on property tax
While the payment of stamp duty and registration fees is mandatory during property purchase or transfer, property ownership also incurs property tax, which is an annual fee paid by property owners to the local government or municipal corporation for the maintenance of the locality. Some municipal corporations provide concessions on property taxes. The rates of property tax vary among municipal corporations within a state and also among cities. However, a few also offer concessions for properties registered in a woman's name.
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Reduced home loan interest rate
Another advantage available to women homebuyers comes in the form of a higher loan-to-value (LTV) ratio, lower interest rates, and lower processing fees. Many banks and financial institutions extend higher loan eligibility to women, enabling them to potentially borrow more for property acquisition compared to men. For instance, certain banks provide women homebuyers with a loan amount of up to 90 percent of the property value, whereas the maximum LTV ratio for male borrowers in the same case might be limited to 80 percent. Furthermore, some banks offer reduced interest rates and processing fees on home loans specifically for women. “Several lenders provide interest rate discounts on home loans for women homebuyers. The extent of this concession varies, ranging from 10 to 30 basis points, depending on the lender and the loan amount,” said Raoul Kapoor, Co-CEO, of Andromeda Sales and Distribution Pvt Ltd.
Besides that, “some of them also offer a lower rate or waiver of the processing fee for women borrowers,” added Kapoor.
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