For millions, buying a house has been one of the greatest challenges, even as interest rates hit record lows. As families struggle to pay their rent or home loan, they look forward to expecting more benefits from the government as they announce new schemes and reforms this budget.
Home loans are the most important investment for any home buyer. It is expected that with these reforms, home loan interest rates will be reduced. This will help buyers save on their monthly instalments and make it easier for them to pay back their EMIs.
The government has been working on the housing sector for the past few years. There has been a focus on improving infrastructure and creating affordable homes for the masses. The country’s home loan
The most common expectation of home buyers is that their monthly payment should be affordable and not exceed 30% of their monthly income. As they analyse what they can afford before making a purchase decision, they need to know the total monthly payment including taxes, insurance, and property maintenance costs. The size of the down payment also plays a role in determining the interest rate.
The government has introduced various policies to help buyers. One of the most impactful is the CLSS scheme, which is a subsidy on home loan interest rates to the eligible beneficiaries. Buyers are expecting that the continuation of the CLSS scheme can make their housing dream much more affordable.
The continuation of the CLSS scheme is expected to have a positive impact on the home loan expectations in India. The CLSS scheme was introduced by the Government of India to provide subsidies to people living in economically weaker sections (EWS) and lower-income groups (LIG) so that they can purchase their own homes.
has been successful at providing affordable housing.
The new home loan benefits introduced by the government has been a boon for the middle and lower-middle-class Indians. The extension of benefit u/s 80EEA to avail additional Rs 1.5 lakh interest deduction on home loans is a great way to incentivize people to buy houses, which will also help in stabilizing property prices. Also, there can be an introduction of a separate provision of deduction of principal repayment which is currently part of the 80C deductionIncome Tax Act, 1961. This provision will provide an incentive to the home buyers to repay their housing loans quickly and will also give a boost to the residential sector.
India’s GST should reduce the cost of raw materials to make homes more affordable for the average Indian citizen. Currently, the GST applicable for affordable homes is at 1% and 5% of other segments. There is an urgent need to simplify it by capping 1% on GST for under-construction projects. This time-bound waiver of GST will help aid the quick completion of projects blocked due to financial reasons.
While constructing a project, developers pay GST on various goods and services which as a result increases the price of a property. Therefore, they should be allowed to set off the GST paid on the raw materials. This will help improve the credit availability to small developers and will provide homebuyers with wider property options to
choose from. This will be a major factor in deciding if India can meet its 2022 goal of having
housing as a basic need for every citizen.
To make the housing market more affordable, the government has been trying to reduce stamp duty by announcing a few schemes. In Maharashtra, for instance, it was announced that from 1st April 2019 onwards, there would be a reduction of 2% in stamp duty. This is a welcome move as it will help bring down the price of homes and make them more affordable.
This reduction in the cost of buying a home will make housing more affordable for the general population. This is an effort to boost up the housing sector, which has been struggling due to high-interest rates and high prices of properties.
(Atul Monga is co-founder of Basic Home Loan.)
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.timesnownews.com.)