Apartments in Bangalore

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It is good time for home buyers, especially buyers looking for affordable home. The government has taken some positive step to boost realty sector. Tax holiday has been announced for ongoing infrastructure projects which were approved during 2007-08 and projects to be completed before 2012. Earlier, the provision was limited to only projects sanctioned before March 2007 and the project to be completed before March 2010.

The government has decided to reduce interest rate one per cent for one year on home loans less than Rs 10 lakhs for a house costing Rs 20 lakhs. The move is expected to boost realty sector and the realty sector is directly or indirectly support other sectors. This measure will have positive impact on economy.

The interest subsidy is aimed at mid-segment housing loan borrowers. One caveat is the cost of the house should not exceed Rs 20 lakhs. Also, the subsidy will be available only for one year. This interest subsidy will be routed through scheduled commercial banks and housing finance companies registered with NHB. A number of developers have been considering getting into this segment. The move to extend by two years the tax exemption available to builders of smaller homes is also likely to persuade builders to reduce the cost of such homes. The minister has urged the developers to pass the tax benefits to customers.

Working of One per cent subsidy

The government has decided to reduce interest rate one per cent for home loan up to Rs 10 lakhs for house costing Rs 20 lakhs, for one year. This means, if you take home loan for 9 per cent and your loan amount is less than Rs 10 lakhs to buy a house costing Rs 20 lakhs, you are eligible for one per cent subsidy.

The Bank deducts one per cent interest from your loan and collects only 8 per cent interest on your home loan from 9 per cent. The one per cent interest subsidy will be routed through scheduled commercial banks and housing finance companies registered with NHB. It means a one-time saving of Rs 7,596 for anyone who takes a Rs 10-lakh 20-year loan at an interest rate of nine percent, with the subsidy taking his effective interest rate down to eight percent.

Tags: Apartment, Apartment India, Bangalore, Bangalore East, Buying, Home Loans, Housing, Housing India, Housing Societies, income tax, indian real estate, market trend, property, Real Estate India

This entry was posted on Saturday, August 1st, 2009 at 5:46 am and is filed under Bangalore. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.