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Women and property did not make a natural pair in the past due to various social issues and legal rights. But increasingly, more women are looking at buying property.
Data from online property information portal RoofandFloor show that women, mostly in the 25-34 age group, form a sizeable share of those who do online research on property.
Why buy
For women, a house or land can be a good asset, as they can get many incentives. For one, they pay lower stamp duty than men. In Jharkhand, for example, the 7 per cent stamp duty fee is waived for women. Other States such as Uttar Pradesh offer a rebate of ₹10,000 on the 7 per cent stamp duty rate if the property is transferred to a female owner.
Women can also get slightly better home loan interest rates than men. For example, loans from SBI and HDFC to women are 5 basis points lower than those given to men.
There are also benefits of joint ownership of a house. For example, loan eligibility can increase when applying with a co-borrower. And both the owners can claim the ₹1.5-lakh tax deduction individually on the interest paid on the loan. If the property is rented out, the rental income can be shared by both, potentially lowering the tax bracket of this income.
These benefits are minuscule, and rather than be swayed by these, it helps to think about property ownership from a broader financial planning perspective.
For instance, women may wish to buy a house when they start a job. One reason is that it can help create a forced savings habit, cut down spending and build a credit history. Starting early has an advantage — you may be able to pay off the loan while young and with less responsibilities.
An option to explore is to be a co-owner with your parents — you can start sooner rather than wait to save enough for down payment. Still, young women must consider real estate as an asset class in perspective and balance the investment with other options such as equity and debt instruments.
Rather than view property as a safe asset (it may not be, due to various litigations that can arise, and possible fall in price), you must look at your ability to take risk, take the help of an advisor and find the right assets for you.
For instance, you can start with systematic investments in potentially higher risk instruments to build a corpus. And take a decision on investing in a property when you have enough liquid assets.
When in mid-career, buying a house can be a less debatable choice. For one, there may be a corpus already built to make a down-payment. Two, there may also be more clarity on your career. Three, your income may be such that you can afford the EMI and have enough left to save to meet your financial goals. Four, your tax bracket is also higher and the deductions you get on interest and principal repayment can help in saving taxes. Do your own research rather than go by trust. You can also consider buying jointly with your husband, rather than alone. If the purchase is for investment rather than self-use, you must evaluate if you will have the required time to manage the property. Land may have fewer hassles than, say, a house that is rented out.
Other issues
One aspect a borrower must think about when taking long-tenure loans such as home loans is the continuity of his/her income. This is more important for women as data, such as that from Catalyst India (an non-profit organisation that works on women’s issues), show that nearly half the women drop out of corporate employment between junior and mid-levels.
As the participation of women in the work force is less — from 36.7 per cent in 2006 it fell to 26 per cent in 2018, as per a Deloitte report — their ability to purchase assets is impacted. Also, many are not aware of their rights.
For instance, the Hindu Succession Act notes in Section 23 that married and unmarried daughters have the same rights on the parental dwelling house as a son. But many do not claim it and miss out.
Women must also follow general good practices such as taking life insurance cover when they have a home loan and making a will for their property.
The writer is an independent financial consultant
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