Advantages of possessing a Second Home

Dev Singhraha

Relocation Expert

The ambitious middle class always looks for different ways to increase its monthly household income. People invest their hard earned money in several high return schemes, shares, equities and much more such sectors. Also, we Indians, are never bored of gold, which results in the majority of people investing heavily in gold related schemes. Although it is true that many times investing in gold will see your savings getting appreciated, this has not been a trend of late. The dwindling prices of gold coupled with security concerns have made investors think twice before investing in gold or gold associated sectors. However, one industry that has benefited as a result of this situation is the real estate sector.

Nowadays people are finding investing money in property as the safest bet. Also, there is always scope for appreciation for a property, which definitely translates into high returns. Any apartment, be it in any location of the city gets its value increased most of the time as time passes. This has been a kind of big boon to the real estate developers. Moreover, people are lately investing their savings to buy second homes in far off places in order to increase their assets and take advantage of various tax benefits that come along with buying of second homes.

There are various tax benefits any home buyer can claim while purchasing a second home for himself. The increase in competition has also encouraged developers to come with designated schemes for second or weekend homes, farm houses etc.. hence, buying a second home is not just limited to the well offs, instead people from all working classes have started to buy second homes to earn more profits coupled with tax benefits.

Buying a Second Home opens up many Tax Benefits:
Let us discuss what tax benefits a taxpayer can claim after purchasing a second home:

For a self-occupied property, the principal component of the EMI against the loan taken is eligible for deduction. In case of loan borrowed for a second home, the interest component is eligible for tax deduction.
Situations wherein the second home is yet to be constructed, then, only the interest paid during pre construction time is deducted for tax benefits. The IT department gives a period of five years for the said rule from the time of construction till its completion.
Many investors buy a second home and then give it on rent. In such cases, loan amount won’t have any limit for deduction of interest payment.
Apart from all the tax benefits that come with the second home, it can also serve as a host for weekend getaways for your family. Moreover, having a second home increases your total worth and provides security for the future.

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