A Great News for the First Time Home Buyers
May 24, 2017 Home Trading Steps
The Budget 2017 has kindled the desire to buy homes in the hearts of almost all those people who do not own a house till now. The reason is the impressive loan schemes introduced by the Government. Assurance of extra tax benefits on real estate investment has also been provided by the government.
The schemes and the benefits are as follows:
People earning less than Rs 6 lakh per annum will get a subsidy of 6.5 percentage points on a principal component of Rs 6 lakh, regardless of their total loan amount. In case they have borrowed money at 9 percent interest, they will pay only 2.5 percent interest on Rs 6 lakh, and 9 percent on the remainder.
For the people who are earning up to Rs 12 lakh per annum will get an interest subsidy of 4 percentage points on a principal component of Rs 9 lakh.
People earning up to Rs 18 lakh per annum will get a subsidy of about Rs 2.4 lakh as a part of their home loan for buying their first house. This would come to a subsidy of 3 percentage points on a principal component of Rs 12 lakh.
Till now the subsidy was only available to those people who were in the bracket of Rs 6 lakh per annum.
In order to give a boost to the real estate sector, the government has announced two more subsidies. These measures are being taken by the government to achieve the target of housing for all by 2022. These subsidy schemes were announced by our Prime Minister Narendra Modi on December 31, 2016, under Prime Minister Awas Yojana (PMAY), but their details have been worked out only now.
The slabs will apply to loans with a tenure of up to 20 years. This limit is 15 years now.
The net benefit that would be obtained by the home buyers across all the three categories over a 20-year loan tenure would be roughly Rs 2.4 lakh (assuming an interest rate of 9 percent, see table), and the monthly instalment reduces by roughly Rs 2,200.
This subsidy benefit under PMAY will not affect the home loan benefits.
There might be further relief on tax payment as well as it is expected that the tax benefits on home loan may go up to Rs 61,800 per annum for someone in the 30 percent tax bracket.
Although the government has already given subsidy to around 18,000 first time homebuyers, at a cost of around Rs 310 crore.
However, National Housing Bank (NHB) and HUDCO are the nodal agencies responsible for implementing the subsidy schemes and it has been noted by a reliable resource that the disbursal rate is likely to go up as the middle-income category has been brought under the scheme.
For all these reasons, the scenario looks very conducive for the first time home buyers from all income groups. Thanks to the schemes introduced by the government.
The schemes and the benefits are as follows:
People earning less than Rs 6 lakh per annum will get a subsidy of 6.5 percentage points on a principal component of Rs 6 lakh, regardless of their total loan amount. In case they have borrowed money at 9 percent interest, they will pay only 2.5 percent interest on Rs 6 lakh, and 9 percent on the remainder.
For the people who are earning up to Rs 12 lakh per annum will get an interest subsidy of 4 percentage points on a principal component of Rs 9 lakh.
People earning up to Rs 18 lakh per annum will get a subsidy of about Rs 2.4 lakh as a part of their home loan for buying their first house. This would come to a subsidy of 3 percentage points on a principal component of Rs 12 lakh.
Till now the subsidy was only available to those people who were in the bracket of Rs 6 lakh per annum.
In order to give a boost to the real estate sector, the government has announced two more subsidies. These measures are being taken by the government to achieve the target of housing for all by 2022. These subsidy schemes were announced by our Prime Minister Narendra Modi on December 31, 2016, under Prime Minister Awas Yojana (PMAY), but their details have been worked out only now.
The slabs will apply to loans with a tenure of up to 20 years. This limit is 15 years now.
The net benefit that would be obtained by the home buyers across all the three categories over a 20-year loan tenure would be roughly Rs 2.4 lakh (assuming an interest rate of 9 percent, see table), and the monthly instalment reduces by roughly Rs 2,200.
This subsidy benefit under PMAY will not affect the home loan benefits.
There might be further relief on tax payment as well as it is expected that the tax benefits on home loan may go up to Rs 61,800 per annum for someone in the 30 percent tax bracket.
Although the government has already given subsidy to around 18,000 first time homebuyers, at a cost of around Rs 310 crore.
However, National Housing Bank (NHB) and HUDCO are the nodal agencies responsible for implementing the subsidy schemes and it has been noted by a reliable resource that the disbursal rate is likely to go up as the middle-income category has been brought under the scheme.
For all these reasons, the scenario looks very conducive for the first time home buyers from all income groups. Thanks to the schemes introduced by the government.
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