Tax benefit to first time home buyers to be a game changer

The government will give a benefit of 2.4 lakh to first-time home buyers with taxable income below Rs 18 lakh a year, which would be a game changer for the sector. The scheme is likely to be informed shortly and will be effective from January 1, 2017. This scheme would be a game changer. The amount is equivalent to the total interest subsidy over a 20-year loan and will be given upfront to the housing financing company, through nodal agencies such as National Housing Bank and Hudco to reduce the outstanding loan. For a 15-year loan, the value of the benefit would be Rs 2.2 lakh.

Affordable housing has become an important sector. For the last two years, the government has been trying to make an environment where affordable housing can be pushed ahead. Home loans should cover stamp duties which are 10% of the cost. It will make it very easy for homebuyers to acquire property since there will have easy access to funds.

Government should help reduce construction costs and suggested SEZ-like structures for affordable housing. When it comes to real estate developers, cost of land is insignificant for affordable housing.

February 16, 2017 / by / in , , , ,