What Budget 2025 Means for Homebuyers: Changes to Taxes and Real Estate Benefits
What Budget 2025 Means for Homebuyers: Changes to Taxes and Real Estate Benefits
In Budget 2025, the government introduced several measures aimed at making homeownership more affordable, especially for middle-class buyers. The budget includes changes to taxes, policies on real estate, and new funds to support stalled housing projects. Here's a breakdown of the key points:
1. Income Tax Relief for Middle-Class Homebuyers
The government has announced a big tax relief for middle-class homebuyers. Under the new tax regime, there will be no income tax payable on earnings up to 12 lakh. This includes 12.75 lakh after accounting for standard deductions. This change is expected to increase the disposable income of many families, making it easier for them to buy homes and spend more in the economy.
How This Impacts Homebuyers?
This means homebuyers will have more money available for purchasing a house, which could boost demand in the real estate market. The income tax relief will likely make homeownership more affordable, as people will have more money to save or invest.
For those wondering, here's how the new tax system works:
New Tax Regime: There will be no tax for incomes up to 12 lakh.
Old vs New Tax Regime: If you're unsure about which tax regime is better for you, you can use an income tax calculator new regime or compare it with the old one using the old vs new tax regime calculator.
2. Changes in Property Tax Rules
One of the big changes in the 2025 budget is the removal of the tax on notional rental income from a second self-occupied property. Previously, people could claim tax exemption on only one property they lived in. Now, homeowners can claim two self-occupied properties as tax-free.
How This Helps Homeowners?
This change is a win for people who own more than one property. It reduces the tax burden on them and encourages investment in real estate. This is especially beneficial for those who own a second home but do not rent it out.
3. Government Plans to Complete Stalled Housing Projects
Budget 2025 also focuses on completing stalled housing projects. The government is setting up a new fund—SWAMIH Fund-2—with ?15,000 crore to help finish up to 1 lakh unfinished homes. This will benefit homebuyers who have invested in projects that have been delayed.
Why This Is Important?
Thousands of homebuyers have been waiting for their properties to be completed. The new fund aims to speed up the construction of these homes, bringing relief to many people. It also helps stabilize the housing market by making more homes available.
4. New Urban Infrastructure Fund
The government is setting up an ?1 lakh crore Urban Challenge Fund to improve urban infrastructure. This fund will help develop cities and make them more attractive for people to live in, which in turn will help the real estate market grow. Better infrastructure like roads, transportation, and public services makes a city more livable and desirable.
Impact on Real Estate Investment
Investors and homebuyers will benefit from better cities and more developed areas. This will increase the demand for both residential and commercial properties in these areas.
5. Higher TDS Limit on Rent
The government has also increased the TDS (Tax Deducted at Source) threshold on rent from ?2.4 lakh to ?6 lakh. This change will help landlords by easing the tax burden on rental income, especially for smaller landlords.
What This Means for Landlords?
Landlords will now face fewer tax compliances. This will encourage more people to rent out their properties, which could increase the supply of rental homes.
6. No Policies for Affordable Housing in Budget 2025
While Budget 2025 brings many positive changes, it does not include specific policies for affordable housing. Real estate experts believe that more attention is needed in this area, as rising home loan interest rates and outdated affordable housing definitions have created barriers for many potential homeowners.
What Needs to Change
Many people are still struggling to find affordable homes. The government could make changes to the current housing definitions to help developers deliver more affordable housing options.
Conclusion: How Budget 2025 Helps Homebuyers
Budget 2025 brings several changes that will make it easier for middle-class families to buy homes. The increased income tax exemption, removal of taxes on second self-occupied properties, and the SWAMIH Fund 2 are positive steps for the real estate market. These changes will likely boost homeownership and help many homebuyers in the coming years.
For those still unsure about how much tax they will need to pay, using an income tax calculator new regime or how to calculate income tax in new regime can help. It’s important to understand the changes in the tax system to make the most of the new opportunities available.
As we look ahead, the question remains: Which is better, old or new tax regime? You can compare the two with the old vs new tax regime calculator to determine what works best for your financial situation.
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