Budget 2019: home loan borrowers need in India

People looking for home loan opportunities have to go through a protracted process. It is not just long but also complicated. Borrowers are required to understand the Nitty-gritty of tax implications and interest payment scheme. The recently launched GST single-tax system has further made it difficult for home loan borrowers making an accommodation purchasing decision.

Moreover, if the government wants to achieve its vision for housing for everyone latest by 2022, loan reforms are not just imperative but mandatory. This blog will talk about the kinds of changes that home loan borrowers expect from the Budget 2019. Let us then begin our intellect stimulating discussion.

Understanding the expectations of a middle-class accommodation purchaser

In order to win the goodwill of middle-class purchasers-cum-taxpayers, the government must chalk out productive taxation plans. Firstly, a reduction relief on income tax brackets can woo the target population to a great extent. This step alone or in combination with rate deduction on house loans can further motivate purchasing decisions made by the middle-class population.

A substantial number of home loan borrowers have suggested for a linking of tax brackets to inflationary rates. They hope that on following this step, the government can give its common masses a huge relief on the taxation front. Furthermore, it will enable the housing loan receivers to pay off their loans in a timely manner. This systematic payment scheme is expected not to prove burdensome for the middle-class house purchasers.

In this regard, increased deduction extent under Section 80 of the IT act from present Rupees One Lacks Fifty Thousand per year is desirable. In 2014 the deduction ceiling within Sec 80 was increased. However, the time has come when this provision has to be revised in Budget 2019.

Read also- A Guide To Buying a Best Residential Property in Noida

Tax rationalization on property purchase

On the prima facie, it appears that the objective of Goods and Services Tax was to erase the scope of multifarious taxes. On the contrary, it is observed that home purchasers have been still compelled to paying additional taxes such as stamp duties. This tax payment practice is palpable in the context of under-construction property.

Experts have believed that it is now high time that the government has paid heed to house buyers. They are looking forward to having some respite in form of rationalizing of exorbitant registration costs. Their next plea is country-wide standardizing of property enrolling procedures and costs. The subsuming of stamp duties under the GST is also a major demand put forward by the home purchasers.

Home loan reformations expected in upcoming Budget

Currently, the home loan buyers avail deduction of up till Rupees One Lacks Fifty Thousand within a tax year under the Section 80c. It also includes the principal repayments. Furthermore, the purchasers get tax deductions benefits of up till Rupees two lacks under Sec 24 in case of payment of interests on a house loan.

However, people find these taxations sops insufficient. It deters the prospective house purchasers to apply for a home loan in major cosmopolitan cities. In fact, rented accommodations seem to be more attractive than buying a house for the common people. Tax professionals believe that increasing the cap to at least four lacks from present two lacks can encourage the investment from house purchasers into the real estate.

Overall infrastructure projects

Home buyers are also expecting reformations in the realm of infrastructure improvements. A residential purchase is not enough for supporting lives unless they are supported by life-sustaining infrastructure and environment. People wish to see new developmental projects such as improved transportation connection with residential regions, potable water facility, and proper drainage system.

Although these factors seem to be indirectly related to home purchasing decisions, the combination of these elements plays a decisive role in regulating buyers’ behavior. If the government announces ambitious infrastructural improvement schemes, it will assist in achieving “Housing for all” without any hiccups.

Despite launching several housing schemes, the government has not achieved significant success in providing housing to one and all. Although in recent years the authorities have been trying to simplify house loan regulations, they still have to take into account the lingering grievances of the people. it is hoped that through this write-up, we have been able to garner enough attention to worries of house loan buyers.