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Good New for Home Buyers

Good News for Home Buyers on Home Loan
Good News! Home buyers have many a reason to cheer the Union 2014-15 Budget announced by the new government on 10th July 2014.

Firstly, the interest exemption available for self occupied property has been hiked from Rs. 1.5 lakhs per annum to Rs. 2 lakhs per annum per individual. So, a couple with both husband and wife as joint property owners and servicing loan jointly, can now claim exemption on housing loan interest upto Rs. 4 lakhs. At home loan interest rates around 10.1-10.25%, that means entire interest on loans with current outstanding upto Rs. 40 lakhs can now be claimed under exemption. That’s Good News for more than 80% home loan customers probably.

Secondly, the deduction limit under section 80-C has been hiked from Rs. 1 lakh per annum to Rs. 1.5 lakhs annum. Here again, the principal component of home loan repayment can be claimed as deduction. So, that’s Good News for almost all home loan borrowers!

Thirdly, the Finance Minister ushered in a more liberal FDI (Foreign Direct Investment) regime for the real estate sector. Look forward to your stalled fund starved projects obtaining some funding and moving towards completion, though it may be relatively slower process.

Fourth, the Finance Minister has signalled his commitment to bring in Real Estate Investment Trusts (REIT’s) in India by giving “tax pass-through” treatment to REIT’s – a globally acclaimed success model that Indian real estate sector has had to do without for so many years.

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