Announcement

Collapse
No announcement yet.

government is encouraging people to buy 2nd house?

Collapse
X
Collapse

government is encouraging people to buy 2nd house?

Last updated: June 19 2013
17 | Posts
1911 | Views
  • Time
  • Show
Clear All
new posts

  • government is encouraging people to buy 2nd house?

    for 2nd home loan, u can claim entire interest amount u paid (no limit of 1.5 lakhs).
    and principle u can use it under 80c if ur first home loan principle has not consumed it already.

    don't u think government is encouraging people to buy 2nd house?

    is it true for 3rd home loan also? can u claim entire interest amount paid?

    i feel people shouldn't be given any benefit on 2nd, 3rd house.
  • #2

    #2

    Re : government is encouraging people to buy 2nd house?

    Aur koi naam rakh lo bhai... kyun logon ko hairaan kar rahe ho??? Naam 'garibaadmi' rakh liya hai aur doosre teesre ghar ki taiyyari me ho...
    Alcohol doesn't solve any problem...but neither does the milk.

    Comment

    • #3

      #3

      Re : government is encouraging people to buy 2nd house?

      so it seems government want people to buy real estate....not surprising that bubble burst is far far away!

      Comment

      • #4

        #4

        Re : government is encouraging people to buy 2nd house?

        Originally posted by garibaadmi View Post
        for 2nd home loan, u can claim entire interest amount u paid (no limit of 1.5 lakhs).
        and principle u can use it under 80c if ur first home loan principle has not consumed it already.

        don't u think government is encouraging people to buy 2nd house?

        is it true for 3rd home loan also? can u claim entire interest amount paid?

        i feel people shouldn't be given any benefit on 2nd, 3rd house.
        Govt gives benefit for the 1st home - claim principal and interest re-payment.

        Benefit for all homes apart from the 1st home are due to the way companies/businesses can claim benefit on interest payments and the same are given to individuals just to create a level playing field.

        So if there is company and buy a house. You can reduce the interest on the home loan from the gross profit and then from the remaining profit pay taxes. So interest is considered as a expense.

        Now if an individual invests in the 2nd home then he/she should also be able to deduct the interest expense from his/her taxable income otherwise people will just form a company and buy their 2nd, 3rd or 4th house using that company.

        Also need to remember that even though there is a benefit in terms of interest rates payment the govt does expect that the 2nd house is put on rent and so the individual is supposed to include the rental income in his/her total income.

        So if the govt stops benefits for individuals then people will just form companies and buy houses and claim the interest rate benefit again. Then the rental income will become the income and most of these companies will report a loss as the rental wont cover the interest payments so the promoters of the companies (individuals) will have to inject equity every yr so that the business is not bankrupt and the banks who have provided the loans dont take over the house.

        So you see it just added a lot of levels of extra work and so to keep it simple its best to provide the benefit for individuals.

        If you are hoping that people will stop investing in RE if the benefit is taken away then it wont.

        Comment

        • #5

          #5

          Re : government is encouraging people to buy 2nd house?

          i understood what u r saying.

          however what i was saying is that it shouldn't be allowed - be it individual or company.

          and i think this benefit, if taken away, might reduce demand.

          i understand black money part but at least on surface level government should take steps which shows that home is a necessity and shouldn't be treated as an investment instrument.

          Comment

          • #6

            #6

            Re : government is encouraging people to buy 2nd house?

            Originally posted by garibaadmi View Post
            i understood what u r saying.

            however what i was saying is that it shouldn't be allowed - be it individual or company.

            and i think this benefit, if taken away, might reduce demand.

            i understand black money part but at least on surface level government should take steps which shows that home is a necessity and shouldn't be treated as an investment instrument.
            If we keep arguing on necessity, then what is necessity for a man apart from "Do waqt ki roti" bhaai saab?.. Is gold, stocks & other investment tools a necessity lol?

            Itni tension mat liya karo life mein...khaao piyo maje karo!
            Good luck

            Comment

            • #7

              #7

              Re : government is encouraging people to buy 2nd house?

              Originally posted by garibaadmi View Post
              i understood what u r saying.

              however what i was saying is that it shouldn't be allowed - be it individual or company.

              and i think this benefit, if taken away, might reduce demand.

              i understand black money part but at least on surface level government should take steps which shows that home is a necessity and shouldn't be treated as an investment instrument.
              It will be very very difficult to implement. Also stopping companies will cause problems. A company can have many subsidiaries and so if each subsidiary can buy one house then people will just create dummy companies. It will be a mess.

              The only way to reduce prices is to increase supply of land and provide fast approvals for building projects. Today land and approvals are under control of govt and we know who gets approvals and how

              But in a place like India where 90% of the land is under litigation its a very very complex problem to solve. That's why i keep on harping that the Indian RE market is not a normal market and looking at marco data like GDP, unemployment, Global markets etc cannot help predict accurately when the Indian RE bubble will burst and more specifically the Pune RE bubble will burst.

              Its heavily skewed in the favor of the seller and so its becoming a asset class which people think will only go up in value. Such people are right in the short term but will have to change their stance after a few yrs cause the bubble will burst.

              Comment

              • #8

                #8

                Re : government is encouraging people to buy 2nd house?

                Originally posted by rakesh311 View Post
                If we keep arguing on necessity, then what is necessity for a man apart from "Do waqt ki roti" bhaai saab?.. Is gold, stocks & other investment tools a necessity lol?

                Itni tension mat liya karo life mein...khaao piyo maje karo!
                ofcourse gold, stocks etc r not necessity and thats why you don't get tax benefits on spending money on those.

                Comment

                • #9

                  #9

                  Re : government is encouraging people to buy 2nd house?

                  bhai leave gold, stocks etc aside, first u tell me does any bank in India give u two home loans?
                  Good luck

                  Comment

                  • #10

                    #10

                    Re : government is encouraging people to buy 2nd house?

                    Originally posted by rakesh311 View Post
                    bhai leave gold, stocks etc aside, first u tell me does any bank in India give u two home loans?
                    yes, why u say so?
                    if your salary is enough then u can get multiple home loans.
                    recommended rule is - ur EMI (of all loans) shouldn't cross 50% of ur in hand monthly salary.

                    Comment

                    Have any questions or thoughts about this?
                    Working...
                    X