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  • Home Loan For Resale Flats

    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.

    Impact Of GST On Resale Properties/ Flats

    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.

    5 Benefits Of Purchasing A Resale Flat:

    1. You can take immediate possession of the flat once your home loan is processed, unless there is renovation and re-furnishing work to be done.
    2. The overall cost incurred from availing a home loan for a resale flat is low compared to a flat/property under construction.
    3. There is a clear idea of the final cost of the resale property.
    4. Property prices are snowballing and if new flats/under-construction flats are bought, the property prices are much higher than a resale flat. A resale flat is more affordable due to factors such as depreciation, age of property, etc. and is the most cost-efficient choice.
    5. Flats available for immediate possession also comes with tax benefits from the payment of the very first EMI itself.

    Resale Flat Loan Eligibility Criteria:

    • The applicant must be at least 18 years old at the time of loan sanction.
    • The maximum age of the home loan borrower depends on the Bank’s terms and rules. Some Banks like State Bank of India, permit applicants to repay the entire loan amount by the age of maximum 70 years.

    How To Apply Home Loan For Resale Property/ Flats

    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.

    Loan Tenure:

    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.

    Home Loan Documents For Resale Flat checklist:

    The following are some of the documents that are commonly asked for by banks, as a part of their documentation and approval process:

    • Duly filled application form.
    • Passport sized photo of applicant
    • Latest 6 months’ bank account statement
    • PAN Card, Voters ID, Passport or Driving License to be submitted as proof of identity.
    • Latest phone bill, electricity bill, property tax receipt, Passport, or Voter's ID to be submitted as address proof.
    • Business address proof should be submitted by self-employed applicants.
    • Documents related to property, like: Agreement of Sale, Sale Deed, Letter of Allotment, Land/ Building Tax paid receipt, Non encumbrance certificate, etc.
    • Copies of approved plan and local body approval

    Tax Benefits In Home Loan For Resale Flat:

    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.

    Major Banks That Offer Home Loan For Resale Flat:

    • HDFC offers custom-made home loan schemes for resale flats for salaried and self-employed applicants. This scheme facilitates immediate possession of a ‘Resale Home’ that meets all your requirements.
    • SBI has been voted as “The Most Preferred Home Loan Provider” by AWAAZ Consumer Awards. The bank offers customized repayment options on resale flat home loan along with unique features such as free personal accident insurance cover, option to avail the home loan as a term loan or overdraft facility, and much more.
    • AXIS Bank is another major home loan provider which caters to the specific needs of those who wish to purchase a resale flat. The home loan scheme offered by Axis Bank is called “Asha Home Loans”. It offers loan for a tenure of up to 30 years and finances 90% of the value of the resale property.

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