As modern Indian women become increasingly financially independent & stable, they are investing in the real estate market, an area that has been traditionally male-dominated. Statistics show that women today, constitute the second biggest group of home buyers in India. Although this trend is still mainly seen in urban Metros like Delhi, Mumbai, Bengaluru, and Chennai, it is slowly beginning to spread to Tier 2 cities as well.
A survey done by Track2Realty reports that 32% of buyers across India are single women, who contribute in about 74% of all real-estate purchases, in a decision-making capacity. For most women buyers, safety and an easy commute to work are priorities while looking for properties. Mumbai, Bengaluru and Hyderabad are preferred cities for investment. Conscious of these rising numbers, developers and banks have finally begun to take notice and introduce schemes and incentives to encourage women buyers.
The biggest challenge when buying property is finances. Women need to educate themselves and research all the available schemes and options before committing to invest. Having said that, this is a great time for women who have been debating the benefits of investing in the property market to take the plunge. There is no reason for undue fear or hesitation if the initial preparation is thorough.
This checklist contains important points that women must consider before investing in real estate.
- Be Financially Prepared – Initial investment in property requires careful planning & research, and enough savings to cover not only the initial down payment but also, stamp duty and registration costs as well as brokerage (if applicable), insurance and taxes. It is advisable to have 6 – 7% of the base cost of the property in addition to the down payment cost, to cover these additional expenses. Ideally, your home loan EMI should not exceed more than 35%-40% of your net salary.
- Lower Interest Rates – Many Indian banks offer home loans at a 0.25 – 0.5% lower interest rate to women buyers as compared to men. While banks like HDFC and SBI offer discounted home loans, home financing companies also have special schemes for women buyers. An example is the ‘Mahila Awas’ loan by Aspire Home Finance that provides loans in the range of INR 2 – 12 lakh at a rate of 10-12% to women who are not eligible for home loans.
- Lower Stamp Duty – In many Indian states, women benefit from paying 1 – 2% lower stamp duty rates as compared to men. This can vary from state to state. In Delhi, women pay a Stamp Duty of 4% vis-à-vis the 6% paid by men. Similarly, in Haryana, women pay 6% vis-à-vis 8% paid by men in urban areas while in rural areas, they pay 4% as against 6% for men.
- Tax Deduction – Women are eligible for a tax deduction of INR 1.5 lakh if the property is self-occupied. When the property is jointly owned, both husband and wife are eligible for individual tax deductions, provided both are earning. Additionally, if the property is rented out, the interest on home loan can be claimed as deduction against the net rental value in totality.
- ‘Housing for All’ Scheme – To empower women from low-income households, this scheme requires that women should either be co-owners or sole owners of affordable houses.
- Choose a Reputable Builder/Developer – Like every other venture, real estate investment has an inherent risk. The best way to minimise risk is buy doing thorough research on property developers with regards to the quality of their work, their ethics, their financial background, past projects and their ability to deliver completed projects within a designated timeline. This is will help avoid unpleasant surprises in the future.