Data indicates that the number of women applicants under PMAY have increased by 6 per cent over the last two years
On Women’s Day, let’s take a look at some of the gender-specific interventions by the government and banks to encourage women homebuyers to invest in property under their name. Under the Pradhan Mantri Awas Yojana (PMAY), the ownership of a house should mandatorily be in the name of the female member of the family. Many banks also offer special rates of interest to encourage women buyers. Besides, several state governments also offer an additional stamp duty waiver if the house is registered in a woman’s name.
- Concession in interest rate by banks
Most banks offer concessional rate of interest for women homebuyers to invest in property. Some prominent banks offer the following interest rates (the rates are only indicative) for women borrowers.
There are quite a few banks that provide special housing loan rates to women borrowers. The rates vary according to the profession and amount of finance applied by these borrowers.
“On an average, the women borrowers can get an interest rate concession of 0.05 per cent over their male counterparts,” said Rishi Mehra of Wishfin.com
State Bank of India (SBI) offers home loans of up to Rs 30 lakh to salaried and non-salaried women borrowers at 8.35 per cent and 8.45 per cent, respectively. On the other hand, loans from Rs 30-75 lakh are priced at 8.50 per cent to 8.55 per cent and 8.65 per cent to 8.70 per cent for salaried and non-salaried borrowers, respectively. Whereas, salaried and non-salaried women borrowers can get loans above Rs 75 lakhs at 8.60 per cent to 8.65 per cent and 8.70 per cent to 8.75 per cent per annum, respectively.
Like SBI, HDFC Limited also provides special home loan rates to women borrowers. Loans of up to Rs 75 lakhs and above Rs 75 lakh can be availed by women borrowers at 8.35 per cent to 8.85 per cent and 8.40 per cent to 8.90 per cent per annum, respectively.
ICICI Bank also offers special rates to women borrowers. Salaried and self-employed women borrowers can get home loans at 8.45 per cent and 8.60 per cent, respectively, for loans up to Rs 30 lakh. Women borrowers seeking a loan of Rs 30 to Rs 75 lakh, Rs 75 lakh to Rs 5 crore and above Rs 5 crore would need to service at 8.75 per cent, 8.80 per cent and 8.90 per cent per annum, respectively.
“The government can think of increasing the gap by further reducing the interest rates for women home buyers, thereby encouraging them to have taxable income which can be used for investment in real estate in their own name,” said Harpreet Singh, Partner, Indirect Tax, KPMG.
“Since a home is a big ticket purchase, you invariably need to shell out a huge sum from your pocket to fulfill the purpose. Taking that into consideration, it would be better if banks give concession to female borrowers on the processing fee, which is calculated at 0.25 per cent to 1 per cent of the loan amount. For example, a Rs 50 lakh loan can have a processing fee of Rs 12,500-50,000. The concession in the fee can thus reduce the cost for a women borrower who also has to pay the margin money, which remains in the range of 10 per cent to 25 per cent of the property cost,” says Mehra.
Partial waiver on Stamp Duty
Several state governments also offer partial waiver on stamp duty, for buyers registering properties in a woman’s name – either as a sole owner or as a joint owner. This waiver varies between 1 to 2 per cent on stamp duty, if the property is in a woman’s name.
Stamp duty charges for women versus men
| State/UT | For Women | For Men |
| Delhi | 4% | 6% |
| Haryana | 4% in rural areas and 6% in urban areas | 6% in rural areas and 8% in urban areas |
| Rajasthan | 4%* | 5% |
Source: KPMG. Data as on February 2018
- Tax benefits
There are some tax benefits of buying a home in the name of a woman that include a deduction of interest up to Rs 2 lakh every financial year, if the house is self-occupied. If a husband and wife are the joint owners of a property and if the wife has a separate source of income, then they can both can claim tax deductions individually. The tax benefit will depend on the ownership share of each co-owner, explains Singh.
4, PMAY scheme
Under the Pradhan Mantri Awas Yojana (PMAY) where a woman holds the ownership of the house, the maximum subsidy that can be availed is up to Rs 2.67 lakh. “Further, women have been kept under the preferred class of groups who would get preferential allotment of houses over male applicants,” said Singh.
“Given the impetus the government intends to give to women empowerment, reducing the interest rates on housing loan for women could be a good idea. Similarly, the government can consider increasing the tax deduction on home loan interest for women to Rs 4 lakh (from current limit of Rs 2 lakh) resulting in tax savings and consequent increase in disposable income in the hands of women,” he added.
The Pradhan Mantri Awas Yojana (PMAY) is envisaged to encourage home ownership amongst women in cities as well as the villages. As per PMAY guidelines, the government has made it necessary for a family to have at least one woman member registered as the owner of a new house under the flagship housing program. Besides, women borrowers, like their male counterparts, can also get an interest rate concession on a home loan under PMAY, which is now attached to Credit-linked Subsidy Scheme (CLSS). CLSS lets women borrowers avail the benefits of interest subsidy on their home loans.
CLSS benefits are divided among four sections – Economically Weaker Section (EWS), Low Income Group (LIG), Middle Income Group – 1 (MIG-I) and MIG – II. Those earning up to Rs 3 lakh, Rs 6 lakh, Rs 12 lakh and Rs 18 lakh a year come under EWS, LIG, MIG-I and MIG-II categories, respectively.
Women borrowers falling under EWS and LIG can avail an interest subsidy of 6.5 per cent on a home loan of up to ₹6 lakh. Beyond the said portion of a loan, normal interest rates will apply. While MIG-I borrowers can get an interest subsidy of 4 per cent on a home loan of up to Rs 9 lakh, those availing the scheme under the MIG-II are likely to enjoy a 3 per cent subsidy on a loan of up to Rs 12 lakh. The loan amount above the subsidised portion in each of the two cases is likely to bear normal rates. The interest subsidy is calculated at Net Present Value (NPV) of the subsidy amount. The NPV is calculated at a discounted rate of 9 per cent. The interest subsidy so arrived will get subtracted from the original loan amount before the normal rates apply to the balance amount of a loan, explains Mehra.
While the subsidy period for EWS and LIG is over, MIG beneficiaries can continue to avail the same till March 2019.
“The ease of process or special window in terms of processing for women will help them go aggressively for these loans. The number of applications from women have increased over last two years and especially in the last one year by 6 per cent. This only goes to show that it is on the right track,” says Mehra.
Interest Subsidy Amount for Different Categories of Borrowers
| Type of Borrowers | Interest Subsidy Amount (In ₹) |
| EWS | 2,67,000 |
| LIG | 2,67,000 |
| MIG-I | 2,35,000 |
| MIG-II | 2,30,000 |
Data as on December 2017
