If you have been tinkering with the thought of buying a property lately, but want to make sure to invest when the time is right, this year might be the right time to make your move. 2019 would be the best time to buy the property of your choice since the prices of the property are more affordable now than it has ever been in the past five years!
2019 has a lot in the table for the home buyers. There are many factors that’ll facilitate home buyers this year, like major reforms, affordable loans. And the market conditions for the buyers are just right after the realty-centric announcements in the Interim Budget and the real estate sector being granted the ‘industry status.’ Plus, the significant rise in the levels of employment and annual house income has increased the demand for residential properties significantly.
There are quite a few important reasons as to why this year could be a good year to invest in property. This is especially true in a metro city like Kolkata as real estate developers in Kolkata have left no stone unturned in providing the best flats to their clientele.
Real Estate Regulatory Authority (RERA) Act
RERA is a revolutionary policy that has transformed the Indian market of the real estate marketplace. This act has brought about improved accountability and transparency in the market of real estate. RERA stipulates a deadline for the completion of the projects and forces the developers to revisit their business models.
Ever since RERA has been implemented, real estate players have shown seriousness when it comes to project completion, which has greatly increased the confidence of the buyer. RERA has been in place for over a year, and this has caused the market to see a rise in demand for all real estate categories, like ready to move in homes, under construction properties or real estate units.
In West Bengal, the Housing Industry Regulation Act (HIRA) is applicable, which has improved the transparency in the Kolkata property market dramatically and has given the buyers more confidence for purchasing a property. Regulations like this are what buyers look for since property buying involves investing a lot of money and people want to be cleared if the procedures are safe for them or not. When so much money is involved, transparency is the key.
Repo Rate Cut Of RBI by 25 basis points:
For energizing the economic activity, in its first bi-monthly monetary policy meeting for the financial year 19-20, the RBI slashed the repo rate by 25 basis points (0.25%) to 6 percent! This decision made by RBI to reduce the interest rates will make home loans cheaper since the banks are expected to pass these benefits on to the end buyers.
This reduction has many new benefits as new borrowers can get a good home loan at reduced rates of interest. Existing borrowers may enjoy the benefit of this reduction in the rate if their lenders are ready to restructure their loan in accordance with RBI’s rate slash. Home loan rates are already reduced by some banks and housing finance companies. There is no doubt that the rates of interest will be reduced further this year, which will result to lower home loans and EMI thereby increasing the number of property buyers.
Tax Removal For Notional Rent For Second Self occupied House:
Maintaining two properties is common these days, be it for children’s education, job requirements or accommodating parents, maintaining two properties is a common thing nowadays. Keeping this in mind, in the interim budget of 2019, it was proposed to exempt income tax on notional rent on second self-occupied properties. Before this, an individual had to pay tax on notion rent if he/she owned more than one house which was self-occupied. This makes it easy for you to buy an extra 3 BHK flat for sale in some of the swankiest locations of the city like BT Road North Kolkata.
Saving Tax On Capital Gains:
The government announced that taxes can be saved by individuals on capital gains from a property sale by investing in two residential properties in its Interim Budget 2019. Before this, Section 54 of the Income Tax Act, allowed taxpayers investment in one residential property but after the new announcement, an investment can be made in two residential properties.
However, the benefits of the capital gains rollover can be benefitted by individuals once in a lifetime, with the capping of up to 2 crore rupees. This decision was welcomed by the real estate industry and provided the middle-class taxpayers a reason to be happy and gave the potential buyers a reason to make their move.
Rate Of Reduction Of GST By GST council:
A recently made cut in GST rates of properties by the GST council which has been in effect since April 1, 2019, is greatly influencing people to buy properties. As per the new rates, the government reduced the GST by 1 percent for affordable housing instead of 8 percent, and 5 percent for regular units instead of 12 percent.
However, the size of what should be considered an ‘affordable housing’ can also be revised by the council. Previously, a house of uniform carpet area of up to 60 sq meters could be qualified under ‘affordable housing’. Now, in order to come under affordable housing, it has to be 60 sq meter in metropolitan areas and 90 sq meter in non- metropolitan area. For both metropolitan and non-metropolitan regions, the price must be below 45 lakh.
It is believed by industry experts that this reduction in GST will drive demand for under construction projects while significantly benefiting the property buyers.
Extension Of PMAY Benefits:
PMAY (Prime Minister Awas Yojna) had its benefits recently expanded and included more eligible buyers. There was an increase in the maximum carpet area eligible homes, and also the scheme was extended till the 31st of March, 2020. This year is the best time to use the advantages of PMAY Credit Linked Subsidy Scheme (CLSS) benefits.
The real estate market in India, at this point, is very buyer friendly, and anyone interested in buying property should make optimum use of this opportunity. The market conditions may not remain the same for long, so it is best to grab this opportunity before it goes away. Do not let this chance of buying your dream home easily and at affordable costs slip through. This is especially true in the case of new residential projects in Kolkata that have taken over the real estate sector by storm.