Most people in India would love to have their own house. It's a dream come true. The Government wants all citizens to have their own house and has launched an ambitious program called 'Housing for all by 2022' Mission. If you're a first time home buyer, this might be the right time to buy your own house.
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Consider these factors when buying your first home.
The Government had launched RERA on 1st May 2017, to bring transparency and fair practices in the real estate sector. Under RERA, developers of all residential and commercial projects, have to register themselves with a regulatory authority and get their registration number. Without registering the project, builders cannot advertise, market, book, sell or invite anyone to buy an apartment or a building in this project.
It is compulsory for developers to provide project details such as cost of land, cost of construction, development agreement, sanctioned plans, covered parking lots, construction deadlines and so on. Under RERA, the builder has to transfer 70% of the money received from a home buyer, to an escrow account. This money would be used as the stages of construction are approved by the engineers.
If the builder delays possession of the apartment within the agreed time period, he must return your (the buyers) entire amount with interest.
Developers used to hold the property as stock-in-trade, with the hope of an increase in property prices in the near future. To stop this practice, the income tax department has started imposing tax on such properties.
Those properties will be taxed at the rate of 8-12%, if they are in stock for more than one year from the date of receiving the project completion certificate. With the implementation of this practice, buyers can expect a further fall in the rates in the sector, which is already facing slow growth.
First-time home buyers can claim income tax benefits under Section 80EE of the Income Tax Act. If you are a first time home buyer, you can claim a deduction on home loan interest paid, up to Rs 50,000 a year under this Section. You can claim this deduction until your home loan is fully repaid. This deduction is over and above the Rs 2 Lakh deduction, under Section 24 of the Income Tax Act.
To claim this deduction the home buyer should meet the following criteria:
a) The home buyer should not have any other residential property in his name and the home loan should be sanctioned between 1st April 2016 and 31st March 2017. It would be good if the time period is extended further in the Union Budget 2018-19.
b) The value of the loan should not be more than Rs 35 Lakhs and the value of the property should not exceed Rs 50 Lakhs.
Credit Linked Subsidy Scheme (CLSS) for the Middle Income Group (MIG), was launched under Pradhan Mantri Awas Yojana (PMAY). Citizens with an annual income between Rs 6 Lakhs to Rs 12 Lakhs, come under the MIG-I category. Citizens under MIG-I category, get a 4% interest subsidy on a home loan up to Rs 9 Lakhs.
Citizens with an annual income between Rs 12 Lakhs to Rs 18 Lakhs come under the MIG- II category. Citizens under MIG-II category, get a 3% interest subsidy on a home loan up to Rs 12 Lakhs.
This is an excellent time to buy your first house. Don't miss this opportunity.
Home loans are a boon for those who want to fulfill the dream of buying a house. However, the budget for constructing or purchasing a house is quite high and people struggle to fulfill their dreams. The government has identified this problem and has come up with certain schemes in order to meet the housing needs of the urban population.
The CLSS and PMAY schemes offer subsidies to eligible groups of people under the affordable housing segment. Now, people with budget constraints can also own a house. The scheme aims to provide financial support as well as rehabilitate the low and mid-income groups in the cities/urban areas.
The credit linked subsidy scheme or CLSS is an initiative taken by the central government to provide subsidies on affordable housing, to the urban population, mainly those belonging to the low and mid-income groups. The scheme aims to rehabilitate the urban poor living in slums and provide them with a subsidy on purchase of a house. This benefits a huge section of the urban population, who cannot afford to bear the entire cost of purchasing homes in cities.
There are several categories of home loans available in the market today. Some of the home loans commonly availed by borrowers are as follows:
The PMAY scheme is regulated by the Ministry of Housing and Urban Poverty Alleviation. The Ministry has laid down certain specific eligibility criteria which a prospective buyer must meet. Most of the commercial banks offer loans to home buyers under the PMAY subsidy scheme. However, the subsidy can be availed only by first time home buyers who do not own a property anywhere in India. The scheme offers subsidy even if the home loan is taken under a joint name.
Listed below are the sections that can avail the PMAY subsidy, if they fulfill the eligibility criteria as stated by the PMAY committee.
SEE ALSO: How To Avail Tax Benefits On Home Loan?
The loan applicant must furnish:
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