For many people today, owning a home has always been a lifelong dream. The real estate industry has seen a significant increase in the number of millennials and Generation Z aspirants. Yet, it can be difficult for first-time homebuyers to grasp financing criteria, arrange their budget, choose the ideal location, choose the size of the property, and many other factors. Luckily, there are certain specific benefits available to first-time homebuyers that encourage them to make significant real estate investments.
But before we delve into these benefits, let’s first take a quick look at an important question.
Who is a First-Time Homebuyer?
Not everyone who buys a home for the first time qualifies as a first-time home buyer. You will be considered a first-time home buyer if you haven’t bought a primary residence in the last three years.
Now that we’ve got it cleared, let’s head back to find out what are the benefits for first-time homebuyers.
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What Benefits Do First-Time Homebuyers Get?
The Indian government has implemented a number of intriguing policies, such as tax benefits and other incentives, to encourage first-time homebuyers and provide them the chance to invest in real estate.
It is true that tax benefits up to Rs. 1.5 lakh can be recovered on a home loan’s principal payments. Only completed residences that were under possession for a minimum of five years from the date of purchase are eligible for this deduction.
Until 2016, only self-occupied homes that were developed or bought during the three years of the loan’s approval were eligible for tax benefits. After the 2016 budget, this has been increased to 5 years to reflect real estate trends in India.
First-time homebuyers in India who pay interest on a home loan may also be eligible for interest deductions of up to Rs. 2 lakh per year. This is only applicable if the residence is owned rather than rented.
Through repayment of the loan’s interest, you can additionally claim an extra tax benefit of Rs. 50,000.
You can deduct an additional 1.5 lakhs from the interest on your home loan in addition to the 2 lakhs allowed by Section 80EEA. Only first-time homebuyers are eligible for this extra deduction advantage.
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Pradhan Mantri Awas Yojana (PMAY)
2015 saw the government’s goal of providing “housing for everyone” realised with the complete implementation of PMAY. First-time home buyers from lower- and middle-income households with a maximum family income of Rs. 18 lakh are benefited by this. Depending on income, different discount rates are applied to the main sum.
Furthermore, two new income groups have been included for the PMAY house loan subsidies. A 4% discount on a Rs. 9 lakh principal payment is available to buyers with an annual income of Rs. 12 lakh. Another is a 3% subsidy on the principal amount of Rs. 12 lakh for people making Rs. 18 lakh annually.
One may leverage the perks of buying a home in India by taking full advantage of these government initiatives. A proud and emotional moment in our lives is when we become homeowners, especially if it is our first.
Also, it makes you feel secure and content financially. You will need additional help, notably financial help, before buying a property, especially if it is your first home. We hope that you are now aware of all the benefits offered to first-time home buyers and wish you the very best on your journey to becoming a homeowner.
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