Most of us save for almost the entirety of our lives to realize our dream of owning a piece of land that we can call our own. Apart from the emotional value attached to owning one’s own house, it is also a valuable financial asset.
For decades now, Indians have considered buying a house as one of the smartest forms of investment. This transcends social status – buying a house lends a degree of financial security, unlike any other instrument. Let’s see why buying a home is undoubtedly a smart investment.
You save your disposable income
When you choose to rent an apartment, your monthly rental goes straight to your landlord’s pocket. You derive absolutely no financial security or worth from the rental sum, and you work so hard to earn a living. On the other hand, if you own a house, your monthly disposable income is for you to use; it doesn’t add to your landlord’s bank balance.
Protection from market shifts
If you buy a house at present, the value of your property is expected to increase at about 7-9% every year, considering historical real estate market trends. Let’s say, your housing loan EMI payments last for about 25-30 years. At the end of your loan tenure, you are likely to end up with a house that is 10-20% more expensive than its initial value. Any piece of real estate is usually risk-free in the long-run. Buying a house, for this reason, is largely viewed as security against inflation.
EMIs equal rent
For working professionals, salaries normally increase by 8-10% every year. EMIs, however, remains constant. Rent, on the other hand, increases by about 7-10% every year. Over time, with an increase in salary and savings, EMIs become easier to pay and almost equal rent. With time, therefore, your liquidity concerns pertaining to EMI payments will be resolved. Additionally, when take home loan from Tata Capital, you enjoy flexible repayment options that suit your financial condition. Its Step-up Flexi EMI plan allows you to pay less EMI in the beginning and pay more as your income rises.
Tax deductions on home loans interest are offered under Section 24 of the Income Tax Act. The maximum amount of interest deduction can be Rs. 2 lakhs for self-occupied houses that are pre-constructed or constructed within 5 years of loan approval. Additionally, interest payable on a home loan is also tax-deductible. If you decide to rent your house, the entire amount of interest is not taxable, irrespective of the construction period. You may also claim principal deductions with a maximum amount of Rs. 1.5 lakhs for self-occupied houses under Section 80 of the Income Tax Act. In essence, you can save a considerable sum on taxes if you invest in buying a house.
Tata Capital offers flexible housing finance solutions for all kinds of buyers. Our housing loans come with an easy online application process, low-interest rates, and flexible repayment tenures.