Everyone’s idea of a dream home could also be different, but what’s common to each Indian is that they wish to have a house of their own. For many, it’s quite just an asset; it’s a source of pride, affection, security, and stability. this sense is further strengthened when it’s your first house. to help a first-time buyer, the govt has taken several steps within the sort of tax deductions, subsidies, and schemes to encourage their buying and support them with housing finance. allow us to explore a number of first time home buyer government programs that would also benefit your home buying:
Up to Rs. 1.5 lakh are often claimed in tax benefits on the repayment of the principal amount of a home equity credit. This deduction is valid only on properties that the development is complete, and are kept for a minimum of 5 years since the date of purchase.
Section 80EE & 80EEA:
Additionally, these buyers can avail of a tax break of Rs. 50,000 on interest repayment which is over and above the tax benefits offered under Section 24. within the union budget of 2019, a replacement section was introduced – section 80EEA. This section extends the tax benefits on interest repayment up to Rs. 1.5 lakhs for a home equity credit under ‘affordable housing’. this will be leveraged as long as you’re not entitled to benefits from Section 80EE.
First-time home buyers paying interest on a home equity credit could also claim deductions on interest paid up to a maximum of Rs. 2 lakhs once a year. this is often applicable as long as the property is self-occupied and not rented.
Before 2016, the tax benefits might be claimed only on self-occupied properties whose construction or acquisition takes place within 3 years from the date the loan was sanctioned. This has been relaxed to five years since the budget of 2016 following the trends of land in India.
Real Estate Regulation Act (RERA) – 2016:
RERA helps homebuyers in many ways: transparency of project data from building owners, real estate sizing standards (such as carpet area), defined and extended buyer rights, bankruptcy regulations, and regulates sector to increase buyer bets.
Pradhan Mantri Awas Yojana (PMAY):
The “Housing for All” mission for urban areas is ongoing and will be fully implemented in 2015-2022.
PMAY, which launched on December 31, is offering homebuyer grants for the first time. This makes it more affordable for people from the lower and middle classes to own their dream home. Grants are given at different rates depending on the income of the buyer. An individual with an income of up to 18 lakh can benefit from this grant.
If the annual income is less than 6 lakh, the grant is 6.5 percentage points on the principal component of lakh 6 lakh regardless of their total home loan.
For revenues of up to 12 lakh, the grant is 4 percentage points for the main component 9 lakh.
For the category with the highest eligible income, i.e. persons with an annual income of 18 lakh, the grant is 3 percentage points on the main component of 12 lakh.
GST on Housing Subsidy:
A GST of 12% was applicable on houses purchased under PMAY. This was further slashed to eight in 2018. this suggests, a first-time homebuyer with a family income of Rs. 18 lakhs are going to be eligible for an advantage of up to Rs. 2.7 lakhs while buying an apartment or a house, rather than the sooner Rs. 2.5 lakhs.
In India, owning a home is much more than just having a piece of property, it is a source of pride, security, and a symbol of financial stability. Moreover, when it is your first home, everything is more, like the excitement, your worries about increasing financial commitments, and your further financial goals. Nowadays Indians are looking to invest in residential property, instead of living in rented houses as tenants.
Owning a home of their own is a big financial achievement and often the biggest motivation for people to work hard and save money. All these reasons have increased the number of first-time homebuyers in India. And to support and encourage first-time home buyers in India, the government is offering several benefits to first-time home buyers. So what are you waiting for, just go ahead and buy your first home.