What Are the Benefits of Buying a House on Your Wife's Name?

Purchasing a property in the near future? Property purchase is a very crucial decision and every aspect of the purchase must be considered strategically to ensure that you get the best possible deal. One such important aspect of property purchase is whether you should register the property in your name or in the name of your wife.

There is no denying the fact that purchasing a property in your spouse's name has its own benefits such as impressing her and your in-laws; not to mention that you also will be considered as a trendsetting male in a fairly conservative and patriarchal society; if these are the reasons why you are buying the house in your wife's name, then you should go for it. However, if you are doing it for financial reasons and to save money, then you should think again and should weigh the pros and cons appropriately.

Having said the above, it is a well-known fact that stamp duty is lower for women in many states and that you can save 1-2 per cent of stamp duty by registering the property in your spouse's name. But is it really worth it, let us find out:

Buy it in your wife's name if you are looking for short-term profits

While the subsidy on the stamp duty for women was introduced to incentivize women property owners, many investors buy the property in their wife's name to reap profits within a short span of time. In speculative transactions, these minor savings can lead to a good business deal.

Applicable tax exemptions and rebates

If the property is purchased in your wife's name, then there is a huge probability that the home loan is also on her name, especially as many banks clearly stipulate that the loan account be in the name of the owner of the property. In such a case, your spouse can enjoy a deduction towards interest up to Rs 1.5 lakh per year. In the same way, if the property is being rented out, then the complete interest paid towards the home loan can be claimed as deduction by her. However, you cannot enjoy any tax rebates if you buy the property in your wife's name, and this holds true even if you are the co-applicant of the loan as even co-applicants of home loans are not eligible to receive tax concessions.

The property may be deemed as a benaami transaction if you buy it in your spouse's name

If you buy the property in your spouse's name, there is a very huge probability that the property will be deemed as a benaami transaction, which is not legally favourable for any purchaser. The easy way out of this situation is to gift your wife the amount that is required for the property purchase, so that the purchase becomes legal. However, gifting the money to your wife would incur additional stamp duty, which misses the purpose of saving money.

Every family's financial and personal predicament is unique and hence you must weigh the advantages and disadvantages of buying on your spouse's name specifically for your needs and situation and then take an informed call.