Buying Your First Home? The Advantages You Shouldn't Overlook

By LODHA

The journey of buying your first home is like setting off on a big, exciting adventure. It's thrilling, but it can also feel a bit overwhelming. This significant milestone represents not only a place to call your own but also a leap toward financial independence and the creation of lasting memories. The good news is that today, buying a house for the first time has become more accessible and streamlined, making the dream of homeownership easier to attain than ever before.

If you're worried about shelling out the funds needed to purchase property, you can always seek financial aid in the form of a home loan. To make purchasing property easier, you can also avail of various first-time home buyer benefits. First-time home buyer perks go a long way in helping you reduce your financial burden and reap rewards in the long run. If you've been looking at ready-to-move or under-construction flats, make sure to have this checklist by your side so you can get the most out of your purchase. 

Unlocking the Rewards of Being a First-time Homeowner

Before we take a deep dive into the various first-home buyer benefits, it's crucial to understand who exactly counts as a first-time buyer. A first-time home buyer is someone who: 

- Has yet to own a primary dwelling as of three years before the date of acquiring the new house. 

- Has never owned a principal residence, not considering whether their spouse was a home buyer. 

- Is a single parent and has a joint mortgage on a house. 

- Is a former stay-at-home woman who solely shared marital property ownership. 

Now, let's understand the various advantages you can leverage as a first-time home buyer. 

Tax Benefits 

Various first-time home buyer tax benefits apply to those who have taken a home loan to finance their purchase of property. For instance, Section 80C of the Income Tax Act, 1961, allows you to claim a deduction of Rs 1.5 lakh on the repayment of the principal portion of a home loan. Do note that this deduction is only available if the home in question has been completed and has been owned by you for at least 5 years since the date of acquisition. 

Additionally, Section 80EE allows you to receive a first-time homebuyer tax credit of up to Rs. 50,000 on the interest repayment of the loan. The newly added Section 80EEA also allows you to enjoy tax advantages on the interest payments for a home loan up to Rs. 1.5 lakhs under 'affordable housing'. In addition to 80EE, you can also avail of interest deductions up to Rs 2 lakhs per year under Section 24 on a home loan if you own the property in question. 

RERA 

RERA, also known as the Real Estate Regulation Act, of 2016, lists various provisions that can benefit first-time home buyers. RERA makes the process of property purchase a lot more transparent. It provides for openness regarding the sharing of data on builder projects, standardised measurements, delineating buyer rights and defined insolvency restrictions. If you're worried about investing in a project rife with builder malpractice, then RERA is a law that will protect your stake. 

Pradhan Mantri Awas Yojana 

To ensure that purchasing property is accessible and easy, the government launched initiatives including a first-time homeowner program known as the Pradhan Mantri Awas Yojana (PMAY). This first home scheme has been designed to help buyers from the Economically Weaker Sections (EWS), Lower Income Group (LIG) and Middle Income Group (MIG) of society. Under the scheme, potential homebuyers from these sections can avail of a tax subsidy offered on home loans. As per the PMAY, the first buyers' home grants for the different sections are as follows: 

- EWS: Not exceeding 6 lakhs. 

- LIG: Not exceeding 9 lakhs. 

- MIG: Not exceeding 12 lakhs. 

The PMAY first homeowners grant eligibility is as follows: 

- EWS: Must have an annual income below 3 lakhs per annum. 

- LIG: Must have an annual income below 6 lakhs per annum.

- MIG: Must have an annual income below 12 lakhs per annum. 

Under PMAY, the first-time homebuyer incentive is a subsidy as follows: 

- EWS: 6.5% on interest 

- LIG: 4% on interest 

- MIG: 3% on interest 

Financial Advantages

As a first-time homebuyer, you open the door to several financial benefits. Monthly mortgage payments contribute to building equity, which is essentially your ownership stake in the property. Unlike renting, where your payments go solely to a landlord, homeownership offers a path to long-term financial stability. 

Additionally, certain costs such as mortgage interest and property taxes may be tax-deductible, providing potential savings. Over time, your property may appreciate, adding to your overall financial well-being and potential return on investment.

Stability and Security

Purchasing your first home brings a sense of stability and security that renting often cannot match. With a fixed-rate mortgage, you enjoy predictable monthly payments, making budgeting more manageable. Owning a home provides a permanent address, a sense of belonging to a community and the freedom to personalize your space. This stability can positively impact your overall well-being and provides a foundation for plans, whether it's starting a family or advancing your career.

Investment Opportunities

Homeownership presents unique investment opportunities for first-time buyers. Beyond the potential appreciation of the property, you have the freedom to enhance and personalize your home, contributing to its value. Renovations, landscaping, and improvements can yield returns on investment, making your home not just a place to live but a valuable asset. Moreover, as you build equity, you gain a financial foothold that can be leveraged for future opportunities, such as upgrading to a larger home or diversifying your investment portfolio.

Buying your first home is not just a transaction; it's an investment in your future, offering a multitude of advantages that extend beyond the tangible aspects of property ownership. From financial benefits to the joy of personalization, homeownership is a transformative journey that brings stability, creativity and a sense of belonging. As you take this monumental step, savour the advantages that come with turning the dream of homeownership into a reality.