Under Atmanirbhar Bharat 3.0 package, the government has declared tax relief that will help people to purchase new residential property of up to Rs. 2 Crores. Buyers were permitted to buy homes at 20 percent below the circular rate without receiving any tax penalties. The circle rate is the value specified by the government at which the property is registered, while the value of the agreement is the value agreed between the contractor and the buyer. Owing to the economic downturn, as prices of many unsold units have fallen below circle rates in many cities, market rates are much lower than the circle rates in these cities. The new change would allow developers to lower the price of their units and lead to a rise in demand and faster absorption of the inventory that is not sold. Fetching a home loan will surely be a good idea.
A decrease in real estate prices and the low-interest rates prevailing will lead people to either purchase their first house through a home loan or attempt to move into a larger house. The decision to purchase a house must nevertheless be carefully considered, especially in periods of falling income levels, where property prices are expected to remain at lower levels, and rent rates are reducing. The value of keeping on to liquidity and not taking on extra liability in the pandemic-related slowdown should be recognized by the people.
How Is It Going to Help Homebuyers, and What Can They Do?
A person can now buy a residential property up to 20% cheaper than the circle rate without facing extra deductions is the greatest advantage related to taxation. The change is expected to decrease real estate prices, as developers will force sales to clear their inventory by cutting rates up to 20%. Homebuyers can negotiate a discount to a price up to 20 percent more than the circle average in their region in cases where developers do not drop their prices down. Homebuyers would also save on stamp duty and apply for cheaper home loans, as they will be able to register their housing unit at a lower price.
Should you buy a house now then?
For those who have their jobs and salary levels intact and have been trying to buy a house of their own for quite some time, it could be one of the best times to buy a home by applying for a home loan. The fact that consumers are holding the bargaining power just makes it more appealing to take the plunge in the current market situation. For the first time in about 15 years, the real estate industry has transformed a buyer’s market, as builders and suppliers have dictated terms over the last ten to fifteen years. Negotiation should be done hard by you to get the house at a lower price than the quoted price.
Should you bear in mind the pandemic and the slowdown?
There is a decrease in cash flows for both salaried and self-employed people and uncertainty about the future at a time when the economy is slowing down. It must be recognized that an additional liability would only add to the levels of stress. With no medical breakthrough yet on pandemic and increasing regular cases, individuals must look to keep liquidity with them, for every contingency.
Purchasing a house would mean using one’s own liquidity for the down payment, in contemporary times, in addition to adding a huge liability in the form of a home loan in an atmosphere where revenue levels are decreasing, and potential cash flows remain unpredictable. Ideally, the big decision to purchase a house should be taken when the pandemic is behind us, and there is fair optimism about the economy’s recovery. Hence, a house should be bought only by the people who are not affected much by the pandemic-induced slowdown and are comfortably positioned.
Homebuyers can go for their purchase if they are looking for their first house and are not facing a significant financial restriction, as these advantages are available until 2021. Since interest rates are low as the interest rates of Bajaj Housing Finance Home Loan interest rates, lower performance on their EMIs can also be seen.
Availing a Bajaj Housing Finance Home Loan available on Finserv MARKETS comes with a lot of advantages. This includes a flexible tenure for repayment, amazing offers, balance transfer options. This may include a home loan processing fee. The whole process of application is totally carried out online.
