Having four walls and a roof does not make any house a home. Makan Se Ghar Tak ka Safar ends only with owning your own home. For some it provides a sense of safety; for others, it adds to comfort; for some it is insurance for future; for some it is legacy for kids and for some it serves as a status symbol.
As they say best time to buy a home is always 5 years ago! If you’ve always wanted to buy a home, now might be the best time to do so. Why?
We give six reasons for buying your dream home this festive season.
Buying a home is an emotional affair
Purchasing a home is more than just an investment in real estate. The security and stability that comes with owning a home are invaluable to the owner. Moreso India being the most populous country the prices of owning one’s own space are always on the spree hence buying it earlier makes all the more sense and to the peace of mind.
Apart from getting peace of mind as you own your own home you won’t have to deal with demanding landlords or rising rent every 11 months! You will have the freedom to stay in your home for as long as you like.
Attractive discounts and offers
During the festive season, several developers offer tempting offers and deals. Most developers give a household fixture or a freebie instead of lowering the Per Square Foot (PSF) pricing.
Builders typically remove preferred location prices (PLC) around the festive season. It’s essential to be careful of a builder who raises the price and then applies a discount without warning.
The owner must also pay stamp duty besides the registration expenses. Registration costs and other levies range from 5 per cent to 10 per cent of the purchase price in most states. Many states have waived these expenses for the festive season of 2021.
So, you could save a hefty amount if you buy a house during this festive season.
With the goal of ‘Housing for All,’ the Indian government launched the Pradhan Mantri Aavas Yojana (PMAY) Credit Linked Subsidy Scheme (CLSS).
Families who fall into the Economically Weaker Section (EWS) or the Low Income Group (LIG) income segment are eligible for 6.50 per cent interest subsidy. This subsidy is valid until March 31, 2022.
Home Loan customers can avail a 6.50 per cent interest rebate on their loan up to Rs. 6.00 lakh under this initiative. Furthermore, the loan’s term has been extended to 20 years from the previous 15 years.
Following Covid-19, many state countries lowered stamp duty rates to encourage the real estate market. Stamp duty is a substantial cost as it is on the the circle rate / government rate or the agreement value of the property, whichever is higher.
As a result, a lower rate means significant savings for the customer during the current scenario and around the last set of festivals
before the CLSS subsidy ceases in March 2022 The Delhi government has extended the 20 per cent circle rate decrease until December 2021. In 2020, the Karnataka government also cut the stamp duty value on properties by 2 per cent to 3 per cent.
Tax saving benefits
People who take a home loan are eligible for income tax benefits under several sections, including 80C, 24, and 80 EEA. Together, these sections offer a benefit of up to Rs 5 lakhs.
For a first-time homebuyer, the income tax incentive under section 80C is up to Rs 1.5 lakh. This tax benefit is available under both the house loan stamp duty and the home loan principal categories. The house buyer would be eligible for a tax exemption of up to Rs 2 lakh under section 24. This exemption would fall under the category of home loan interest.
For first-time house buyers, Section 80EEA provides an income tax benefit of up to Rs 1.5 lakh. The restriction here is that the stamp duty value of the residential property must not exceed Rs 45 lakh.
Favourable home loan interest
To boost economic growth following the pandemic, the RBI has kept the interest rate low and they are bottomed to the all-time low currently. And it looks like the low interest may continue for some time around the festival time and end of the year 2021
The low repo rate or interest rate has made it easier for financial institutions to pass the benefits of the low-interest rate to their home loan customers. As a result, home loans have become affordable. It makes little sense to wait to buy a home in today’s world when the interest rate on a home loan is so low.
To work from home (WFH)
Covid has changed the way we work for the better. Working from home has become normal for us at this point. As homeowners, you can easily customize your workspace to meet all of your work needs.
This allows you to gain maximum productivity and focus, so you can give it 110 per cent while working!
(The writer is MD & CEO, Motilal Oswal Home Finance)
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