A home buying procedure consumes huge time and brainstorming. But, you can avoid all this by deciding to purchase a resale flat/apartment/residential property. The buying of a resale property is somewhat beneficial as the first positive thing about making this decision is higher saving as you are not supposed to fix almost everything as the property comes with many preinstalled things. So, below-listed are the essential things related to a home loan for the purchase of a resale property.
- Effect of GST on Resale Property Sale/Purchase:
The implantation of Goods and Services Tax commonly known as GST changed the commercial scenario and thus the real estate sector also felt the change. But, not many people/aspiring home buyers know that this new tax reform also changed the dealing of resale properties. The resale properties don’t fall under the GST list but the seller of this property is required to bear the charges for stamp duty which can be different as it changes from State to State. Similarly, the purchase of a resale property is easy and has nothing to do with GST but the resale of an under-construction property falls under the Goods and Services Tax. Also, the GST rate is 12 percentage across the Country on purchase of the new or under-construction property.
- Home Loan Eligibility:
A couple can apply for a home loan jointly for the purchase of a resale property. Apart from a couple, anyone can apply for a home loan jointly such as wife, husband, mother, father, sibling or children.
- Home Loan Tenure:
The tenure of a home loan depends on the applicant’s at the time of application, age of the applicant on maturity of the home loan, how old the property is while applying/completion of home loan, repayment type/mode and income of the applicant are other things that consider the home loan period.
- Required Documents for Home Loan:
- Duly filled application form.
- Passport sized photo of applicant
- Latest 6 months bank account statement
- PAN Card, Voters ID, Passport or Driving License as identity proof.
- Latest phone bill, electricity bill, property tax receipt, Passport, or Voter’s ID 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
- Income Tax Benefit from Purchase of Resale Property:
The person becomes eligible for tax benefits as soon as he/she take the possession of the property. A person can avail deduction on principal amount up to rupees 1 lakh under Section 80C on the purchase of resale property/flat. Also, the person can avail another deduction up to rupees 1.5 lakh on the interest paid on home loan under section 24B of the Income tax rules.
These two income tax rebates prove how beneficial it is to purchase a resale residential property. Also, the sanction of a home loan for the purchase of a resale property is easier. Thus, consider the above-mention points while purchasing the property.