Everyone has a different idea of their dream home, but everyone can agree that owning a home is their goal. Many consider their homes more than assets; they regard them as sources of affection and a sense of security and stability. First home gives one an even stronger sense of pride.
The government has taken several steps to assist first-time home buyers. These include tax deductions, subsidies, and schemes to encourage and aid homebuyers.
Here are a few initiatives that can benefit all first-time home buyers in 2023.
First-time Homebuyers: Who Are They?
The term “first-time home buyer” does not necessarily refer to someone buying a home for the first time. One will be regarded first-time home buyer if they, in the last three years, have not purchased a primary residence.
First-Time Home Buyer Benefits
One can take advantage of several government and tax benefits when they purchase their first home.
Government Benefits for First-Time Home Buyers
There are several government benefits available to first-time buyers. Here are a few:
Real Estate Regulation Act, RERA of 2016
Homebuyers benefit from RERA in several ways:
- The openness of builder projects
- Standardised measurements of properties (such as carpet area)
- Enhanced buyer rights
- Insolvency restrictions
The aim is to improve the stakes for buyers by checking the builders’ malpractices and controlling the industry.
Pradhan Mantri Awas Yojana (PMAY)
The government achieved its goal of offering “housing for all” in 2015 with the completion of PMAY. First-time home buyers from lower and middle-income families are eligible for this program. The maximum income for the family should be ₹18 lakhs per annum to get eligibility. Depending on income, discount rates vary for principal amounts.
Slabs of New Subsidy Income
A new income bracket for PMAY first-time home buyer loan subsidies has been implemented. A buyer with an annual income of ₹12 lakhs is eligible for a 4% subsidy on a principal payment of ₹9 lakhs. Those earning ₹18 lakhs per annum qualify for a 3% subsidy on ₹12 lakhs principal amount.
Government Reduced GST for Housing Subsidy
A 12% GST was levied on residences acquired under PMAY. As of 2018, this rate has been reduced to 8%. When purchasing a flat or house, a first-time homeowner with an average income of ₹18 lakhs would qualify for a bonus of up to ₹ 2.7 lakhs instead of ₹2.5 lakhs previously.
First Time Home Buyers Tax Benefits
The following are the tax sections that benefit first-time home buyers.
Section 80C
On the principal repayment of a house loan, it is possible to claim a tax benefit of up to ₹1.5 lakhs as a tax deduction. As part of this deduction, one can only claim the deduction for complete homes owned for a minimum of five years since the date they were acquired.
Section 24
First-time home buyers also can claim interest deductions on their home loans, up to a limit of ₹2 lakhs per year for those paying interest on a home loan. If one owns their home instead of renting it, they can only take advantage of this benefit.
Sections 80EE and 80EEA
On top of the tax benefits provided under section 24, these buyers can also benefit from a tax credit of ₹50,000 on the interest repayment. As part of the 2019 union budget, a new section 80 EEA was inserted. The tax advantages on interest payments are increased for a house loan up to ₹1.5 lakhs under ‘affordable housing’. One can only use this if they do not qualify for benefits.
Timeline for the Claim
Before 2016, self-occupied residences could be taxed as a deduction only if they had been acquired within three years of the loan approval or they had been constructed or received within that time frame. Since the 2016 budget, this has been reduced to 5 years to reflect the trends in Indian real estate.
Own The First Luxurious Home in Mumbai Now
Changing market patterns have influenced consumer purchasing habits and the real estate market. Despite this, every Indian values owning a home. One can maximise the benefits of owning a property in India by taking advantage of these government initiatives. First-time home ownership is an enriching and heartfelt experience. Additionally, it provides one with a sense of financial security and delight.
There is joy and delight in purchasing the first home, and if it is a luxury home, there is no bar to their happiness. That is why many young home buyers are learning to buy a luxurious house or apartment in Mumbai. They are investing in premium properties by Piramal Realty.
Take an e-tour of Piramal Projects today to find your dream home.
Disclaimer- This article is based on the information publicly available for general use as well as reference links mentioned herein. We do not claim any responsibility regarding the genuineness of the same. The information provided herein does not, and is not intended to, constitute legal advice; instead, it is for general informational purposes only. We expressly disclaim /disown any liability, which may arise due to any decision taken by any person/s basis the article hereof. Readers should obtain separate advice with respect to any particular information provided herein.
