Why You Should Buy a Home Sooner Rather Than Later in Your Career

It’s no secret that millennials these days prefer to spend their money on experiences rather than on purchasing assets. Given a chance, people in their 20s and 30s would jump on an aeroplane to an exotic destination because who wants to be bogged down by EMIs, right? Well, most people from the previous generations will not agree with this. And there’s a reason behind it. 

Investing in a house property, for instance, will give you multiple benefits as well as an asset to bank on, should things go awry. Besides, owning a home also gives you a sense of achievement and a sense of security through your sunset years. That being said, there is a reason why investing early on in your career is more beneficial than investing later on. Here’s why!

• You can claim tax benefits

Tax savings is a good reason to invest in house property. Under income tax laws, an individual can claim a deduction of interest paid under Section 24 of the Income Tax Act and the principal amount repaid under Section 80C. Further, if the house is under construction, you can claim all the interest paid in the pre-construction period in five equal instalments once the construction has been completed. 

Further, when two or more individuals invest in house property in joint names, they can claim a tax deduction of both the principal and the interest separately while filing their income tax returns. This is subject to the fact that both investors contribute toward loan repayments. Hence, as one can see, there are a lot of tax benefits one gets from investing in house property that reduces their income tax liability each year.

• You will need to pay lower EMIs every month

The younger you are, the more time you have to pay off your housing loan. If you are in your mid-20s, you can avail of a housing loan spanning 30 years, thereby giving you sufficient time to pay it off. The more the time, the lower the EMIs, which is an added benefit that you enjoy. Besides, if you are unmarried or in a situation where you and your spouse both earn but have limited liabilities, then this would be the best time to buy your own home and enjoy it.

• You don’t have to pay rent to anyone

For those of us living on rent, we know how painful it is to allocate a large portion of our income towards this expense every month. And then, there is always the feeling that the home is never ours and we cannot modify any aspect of it without permission from the landlord. Renting a home, at times, also comes with the risk of getting evicted. 

When you buy your own home and live in it, you don’t have to pay rent to anyone. And while the money you save will go towards paying EMIs towards your housing loan, at the end of the day you still get ownership in an asset that typically appreciates over time. Hence, you might as well use your income each month to make your own coffers rich rather than someone else’s.

• You have an asset to bank on

Owning a home equals having a lifelong asset to bank on. It’s a security that no one can take away from you and something that you can bank on in your sunset years. Investing in house property is reliable as it appreciates in the long run while also being secure. If you purchased in your 20s or 30s, you can see exponential growth in 10-15 years and enjoy a return on your investment. 

For any clarifications/feedback on the topic, please contact the writer at athena.rebello@cleartax.in