Top 7 Benefits for First-Time Home Buyers in India

Buying a first home is like a dream for numerous Indians. If you are looking to take a step toward homeownership, it’s a perfect time. This blog explores some first-time homebuyer benefits available in India. By availing of these advantages, you can turn your dream home into a reality.

7 Advantages for First-Time Home Buyers in India

Since the Indian real estate sector is observing significant growth, investing in property now can prove beneficial in the future. Moreover, you can take advantage of several schemes and subsidies being run for first-time buyers. Let’s get to know about them without any further delay.

1. Pradhan Mantri Awas Yojana 

The Pradhan Mantri Awas Yojana, or PMAY, is a housing scheme by the Government of India. It has several components under which an eligible person can claim benefits.

PMAY CLSS is a prominent interest subsidy scheme under PMAY. The initiative has been taken by the Indian government to make home loans available at affordable prices to first-time home buyers. 

PMAY CLSS is one of the crucial first-time home buyer government benefits available now. Under this government program, you can avail interest subsidy of 6.5% on your home loan. However, for that, you need to meet the following criteria: 

• Lower Income Group – Annual income between INR 3 lakh to INR 6 Lakh
• Middle Income Group 1 – Annual income within INR 6 lakh to INR 12 Lakh
• Middle Income Group 2 – Annual income within INR 12 lakh to 18 Lakh.

Other Eligibility Criteria

• The property ownership must contain one female from family members.
• The applicant should not have owned any pucca house in India before.
• The location of the property must be within the 2011 census statutory towns.
• The application shouldn’t have taken any other government assistance.

For detailed information and eligibility criteria, visit the official website.

2. Reduction in GST

Under the Pradhan Mantri Awas Yojana, you can also claim GST benefits. If you buy a home priced up to INR 45 lakh, you can avail reduction in GST of 8%. The regular GST rate on homes is 12%.

3. Tax Benefit under Section 80C

Tax benefit under section 80 C is one of the prominent first-time homebuyer benefits that individuals can avail of.

You can claim a deduction of up to INR 1.5 lakh on the principal repayment of your home loan. To claim this rebate, you will need to keep possession of the property for at least five years. You can’t sell your home before this period.

4. Section 80EEA

The section 80EEA was introduced to support budget-friendly housing in India. It offers additional deductions on home loan interest. Under this section, taxpayers can claim an additional deduction of Rs1.5 lakh per financial year.

Nonetheless, the property for which the loan is obtained must meet the following guidelines

The carpet area of the home shouldn’t be more than 60 square meters in metropolitan cities and 90 square meters in other cities.

5. Lower Interest Rates on Home Loans

Several private and public banks in India offer low-interest home loans to first-time homebuyers. You can compare the home loan interest rates of different leading financial institutes and then make decisions. 

Since first-time home-buyers are considered to be less risky, banks come with various schemes for them. It is advisable to read the terms and conditions before applying for a loan.

6. Section 24 

To maximize your first-time homebuyer benefits, you can also claim for interest deduction of up to INR 2 lakhs per year on your home loan. 

Section 24 of the Indian Income Tax Act permits the reduction of interest on home loans for income tax liability. 

Some conditions for this rule include:

• The loan must be acquired to buy, construct, repair, and renew a property.
• The acquisition and construction must be completed within 5 years.
• The applicant needs to submit a certificate from the person to whom any interest is payable on the capital borrowed.
• The house property shouldn’t be rented out. 

7. Benefits for Women

A woman buying a house for the first time gets several benefits apart from general profits. These include:

Several states in India provide lower stamp duty rates to women buying homes. For instance, In Maharashtra, the stamp duty rate is 2% for women, compared to 3% for men.

In addition, numerous banks and financial institutes offer lower interest rates on home loans to women.  

Women are also given priority under government housing schemes, including the Pradhan Mantri Awas Yojana (PMAY)

Note: The above schemes and subsidy options are subject to change. It is advisable to check with the relevant authorities to get up-to-date information.

Other Things You Can Do To Get an Affordable House in India

Apart from exploring government schemes, you can try the following things to minimize the overall budget of your house.

Save for a Down Payment

The higher your down payment is, the smaller your monthly loan installment will be. So start saving for the down payment in advance. Aim for at least 20% of the property price as a down payment.   

Compare Loan Options

Compare home loan interest rates of different banks. Go for a loan that meets your financial condition. 

Consider Your Location

Determine buying homes in suburban locations. Properties are relatively cheaper in those areas than in prime city centres.

Negotiate

Negotiate the price with the seller. In most cases, there is often a scope for negotiation. You can secure a good deal with your negotiation skills.

Work with a professional real estate agent who can help you navigate the market and find suitable properties at affordable prices. 

Conclusion

Buying a first home is a momentous milestone for everyone. It is an achievement that gives a sense of security, stability, and accomplishment. We hope the above-mentioned first-time homebuyer benefits will turn into significant resources for you. Using them, you can make your home-buying journey smooth. If you want to explore homeownership opportunities in Bangalore or Hyderabad, get started now.