Why pay rent month after month, when you can own your own home by paying off monthly EMIs to banks and other financial institutions? If you are looking for a home for immediate possession, a resale flat is the most feasible option. Some of the advantages of going for a resale flat is that it facilitates greater savings, while saving time which would otherwise be spent on waiting for the completion of an under construction flat.
The Goods and Services Tax (GST) implemented by the government recently has definitely affected the real estate industry. However, not many people have an idea on how it affects resale properties.
Experts say that GST does not apply to resale properties. However, a seller will have to bear the charges of stamp duty and registration that differ from state to state. It must be understood that although resale of property does not attract GST, resale of a property under construction does. The rate of GST for purchase of new and under construction properties is fixed at 12%.
In conclusion, a resale property is considered an immovable property and therefore will not attract GST.
An applicant can apply individually or jointly for a resale flat home loan. The proposed owners of the residential property can be co-applicants. However, it is not mandatory that co-applicants of a joint home loan for a resale flat have to be co-owners of the same property. Co-applicants have to be close family members like parents, spouse, siblings or children.
The term of the home loan depends on details such as customer’s profile, repayment scheme, age of customer at the time of maturity of loan, how old the property will be by the time the loan matures as well as any other terms that are deemed applicable based on prevalent norms of the concerned Bank.
The following are some of the documents that are commonly asked for by banks, as a part of their documentation and approval process:
One of the greatest highlights of purchasing a resale flat on home loan is that you can tax benefit once you gain possession of the house/apartment. A borrower can avail upto Rs.1 lakh deduction on the principal amount, under section 80C of the Income Tax Act as well as a tax exemption of up to Rs 1.5 lakh on the interest on home loan, under Section 24B. This makes purchase of property on resale, by availing a home loan, more profitable.
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