When it comes to buying a home, women have long been the influencers when making the crucial decision of buying a property. Typically, women would tend to invest in gold, fixed deposits and other traditional financial instruments. This changed gradually over the years with women increasingly gaining financial independence coupled with several benefits available to women homebuyers in India. In recent times, however, as reports indicate women are increasingly emerging as the key homebuyers. A recent survey by ANAROCK Property Consultants found that of the survey respondents 62% women chose housing as their preferred asset class, which was even more than men.*
Here we take a look at the benefits of investing in real estate, the various sops available for women homebuyer and the things to consider when investing in real estate.
Why real estate?
Home offers stability
Owning your own home will provide you a sense of rootedness and belonging. It’s a safe space to nurture your dreams, build lifelong relationships. Also, as we learned from during the pandemic, having your own home that offers safe haven for your loved ones is crucial for their safety and wellbeing.
Buying a home also means securing your financial independence
Experts’ advice to have a diversified financial portfolio, a mix of physical and financial assets. Buying a home is seen as a safer longer term investment asset, given that it’s not subject to market volatility unlike equity and provides appreciation.
With the many subsidies and tax rebates offered to women buyers, investing in real estate adds to the already existing advantages.
What are the benefits that can be availed by women homebuyers?
Concessions on home loan: When it comes to women homebuyers, most banks offer sizeable discounts on interest rates as compared to men buyers. However, these can be availed if the women is the solo candidate or the primary applicant in cases of joint-ownership. Boosting women buyers in their endeavour to be independent, most banks also forgo the processing fees involved while granting home loans.
Remissions on stamp duty: Stamp duty charges are almost 1-2 % less for women as compared to men in Indian states including Maharashtra, Punjab, Delhi, Haryana and Rajasthan and there is no stamp duty levied for women in Jammu and Jharkhand. Recently, Maharashtra government reduced the stamp duty rates in the state from existing 5% to 2% till December 31 2020 and 3% from January 1, 2021 to March 31, 2021.
The Pradhan Mantri Awas Yojana (PMAY) Advantage: The PMAY provides affordable housing for the urban poor. Under the PMAY scheme, a subsidy is offered by the government with a condition that at least one lady from each household should be registered as a property owner to avail the benefit and it meets other eligibility criteria. This has acted as an added impetus in increasing the number of women home buyers.
Tax privileges: Finally, investment in real estate also attract tax exemptions on home loan principal and interest repayments, as well as tax exemption of in case of affordable housing.
Things to remember while investing in a property
Reason to buy: Firstly, decide on whether to buy a house for self-consumption or for investment purposes. Next, set a budget according to your choice. Based on this, one can decide on other factors like location to invest, configuration, stand alone or gated communities and finally amenities to opt for. If buying a house for investment purpose then choose the location with care, enquire about the rental in the area and also look at the price growth trend of that locality.
Carefully budget: Depending on your income, carefully budget on how much is that you can pay for down payment and what is the component that you can divert towards an EMI of the home loans. Do not stretch your budget such that you are not able to manage your EMIs or are left with no savings. A home loan component should form around 30-35 % of your monthly salary and not more than that if you want to lead a comfortable life. Stamp duty and registration charges, maintenance and other miscellaneous spending should also be accounted while deciding on the budget.
Choosing a ready-to-move-in property is preferable: Whether you decide to buy for self-consumption or as an investment, buying a ready-to-move-in or RTMI property will prove beneficial in multiple ways. For one, you will buy a property after thoroughly inspecting it - check whether the construction quality is good, the fixtures, amenities, etc. are as promised by the developer. This will save you from any bad surprises later. Secondly, you can either move in or give the property on rent almost immediately, you will be saved from the wait and at times uncertainty. Also, you won’t have to pay GST on RTMI properties.
Choose a RERA certified reputed developer: Choose a well-known developer. Caution should be more in case of investing in under-construction projects. Do a thorough check on the developer’s background, the various projects that he has worked in the past on, the quality of construction, the timely delivery of projects, kind of amenities provided and then choose the one which is the best for you.
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