by Pooja Bhatia,
A first-time home buyer in India is entitled to a host of benefits, courtesy the present government at the centre. Besides schemes for first time home buyers, there are tax benefits and government subsidy for them. Today, we list you the first-time home buyer benefits that make it easy for you to buy your dream home, by saving money and increasing affordability.
- To begin with, a first-time home buyer needs to be aware of the government flagship program- the Prime Minister Awas Yojana (PMAY). It was introduced in June 2015 and promises to build 2 crore homes by 2022. The huge increase in the supply of homes is a big benefit for the first-time buyers. They just need to be more aware of the fact so that the search and understanding of market conditions are more refined and up-to-date. PMAY is one of the top schemes for first-time home buyers since more dwelling units will be made available in the MIG category also.
- There is a government subsidy for first-time home buyers called the Credit-Linked Subsidy Scheme (CLSS). It entitles the first-time buyers to the PMAY-CLSS benefit for an interest subsidy of 3 to 6.5 per cent. The exact subsidy per cent will depend on your income level and the LIG/MIG category purchase.
- An addition to first-time home buyer tax benefits is the interest benefit on home loans. The current tax benefit allows the first-time home buyer deductions of up to Rs 2 lakh in interest and Rs 1.5 lakh in the principal amount paid. The first-time home buyer, whose property value is under Rs 50 lakh, is entitled to an additional deduction of Rs 50,000 in interest. So, the overall annual tax deduction can be Rs 2.5 lakhs for the first-time home buyer (this is on the interest paid). Overall, it makes their effective interest on home loan even more attractive.
- The first-time home buyer tax benefits also include benefits for people under different income groups. People earning up to Rs 12 lakh, are entitled to an interest subsidy of 4 percentage points subject to a principal amount of Rs 9 lakh. Individuals earning up to Rs 18 lakh are entitled to a subsidy of 3 percentage points subject to a principal amount of Rs 12 lakh.
- The centre has reduced the GST percentage from 12 to 8 per cent for first-time home buyers under the PMAY-CLSS scheme.
Pooja Bhatia is a property news enthusiast, who likes staying updated on business and corporate news, lifestyle at home, home interior elements, location insights and rest of the information, to make living better. She is also an avid traveler (a blogger on holidays) and an avid reader and a part of this real-time information, she converts into real estate enthusiasm.