The Indian real estate sector is undergoing a significant transformation, with women emerging as key investors in the property market. According to a recent survey by Anarock, a leading property consultancy firm, 70 percent of women listed real estate as their most preferred investment avenue, with many of them considering premium or luxury homes priced over Rs 90 lakh. Interestingly, the majority of the women surveyed had also cut down their stock market exposures due to high volatility.
Here are some of the schemes and incentives on offer women buyers and borrowers looking to buy their dream homes:
Encouraging homeownership for women: Women are increasingly becoming financially independent and are taking an active role in real estate investments. Recognising this shift, the government and financial institutions have introduced policies and schemes to make it easier for women to secure housing loans. These initiatives encourage homeownership and offer a range of benefits that make the process more affordable and rewarding.
One of the most significant benefits for women homebuyers is the lower interest rate offered by many institutions. Lenders provide women borrowers with a discount of 0.05 to 0.10 percentage point on the interest on housing loans. Although this may seem small, it can lead to substantial savings over the loan tenure. For instance, on a home loan of Rs 50 lakh with a tenure of 20 years, a 0.10 percentage point discount can save a woman borrower up to Rs 1 lakh in interest payments.
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Higher housing loan eligibility: In addition to lower interest rates, women borrowers often benefit from higher housing loan eligibility, since women are considered less likely to default on payments. This increased eligibility enables them to afford better properties that meet their long-term needs. To be eligible for a higher loan amount, women must meet certain criteria, including being of a minimum 21 years in age, having a stable income, and enjoying a good credit score.
Another significant advantage for women homebuyers is the reduced stamp duty charges. Many state governments offer a 1-2 percentage points reduction in stamp duty charges if the property is registered in a woman's name. This reduction in upfront costs makes homeownership more affordable for women. For example, in Maharashtra, women can enjoy a 1 percentage point discount on stamp duty, while in Delhi, the discount is 2 percentage points.
Multiple tax benefits: Women borrowers can also avail of multiple tax benefits on both the principal and interest on housing loans. Under Section 80C of the Income-tax Act, they can claim deductions of up to Rs 1.5 lakh on the principal repayment. Additionally, under Section 24(b), they can claim deductions of up to Rs 2 lakh on the interest paid on their home loan. If the home loan is taken jointly with a spouse, both co-applicants can claim deductions individually, doubling the benefits.
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First-time buyers gain advantage: The government has also introduced various schemes to provide first-time buyer benefits to women. The Pradhan Mantri Awas Yojana (PMAY) offers interest subsidies of 3 percent to 6.5 percent for the economically weaker section, low-income group and middle-income group categories. State governments also offer incentives specifically targeted at first-time woman buyers. The Affordable Housing Fund (AHF) provides financial assistance for affordable housing projects to promote homeownership among women.
To avail of these benefits, the women buyers need to submit certain documents for verification, including proof of identity, address and income, and property documents. It is essential to ensure that all documents are valid and updated to avoid delays in loan processing.
For first-time women buyers, the journey to homeownership has become more accessible and empowering. With the advent of lower interest rates, increased home loan eligibility and a range of government schemes offering exclusive benefits, women can now confidently invest in their future through real estate. By leveraging the available home loan benefits and gathering the necessary documents, women can seamlessly navigate the home loan application process.
As the Indian real estate sector continues to grow and evolve, it is expected that an increasing number of women will take charge of their financial futures and turn their dream of owning a home into a reality. As one real estate expert put it: "With growing independence and higher disposable incomes, women are increasingly coming to the housing market as convinced investors.”
This is the next big leap forward for the housing industry, it seems.
The writer is business head, housing finance, Kotak Mahindra Bank.
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