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Want to Own Multiple Homes? Get Some Information on Home Loans and Tax Benefits

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home loans and tax benefits

Beginning with the common myth first – One can own any number of properties but one can never take more than one home loan at a time.

Having already called it a myth it is probably right to mention that just like there is no restriction on the number of houses a person can own (as long as they do not considered Benami properties) there is no set restriction on the number of house loans you’re getting. This, however, depends on the earnings as well as the person’s ability to service the loan.

Further is some information about tax benefits that home buyers and home owners would need in respect to their multiple properties.

About Tax Benefit on Interest Payment

Deduction can be claimed for interest payable on a loan that has been taken for purchase, construction, repair, or restoration of any property under Section 24b. In case there is only one residential property that is occupied by you, a maximum deduction of Rs. 2 Lac per annum can be claimed on the interest repayment of the loan. Alternatively, in case money has been borrowed after 1st April 1999 and the construction of the property is not completed within 5 years from the end of the financial year in which the money was borrowed, the deduction shall be restricted to only Rs. 30,000.

In a case where a property that you own has been rented out, you can claim deduction for the entire interest paid by you, without any upper limit against the rent received in respect of each such property. Also, there could be a case where all houses that you own are occupied by you, you are given the liability to choose any one property as self-occupied while the other(s) will be treated as a rental property. Once any such property is treated as let-out, you can claim the tax benefits for full interest paid, for money borrowed in respect of any of the property that is treated as let-out.

Irrespective of whether the money has been borrowed from a from a bank, a housing company or from friends and relatives, for the purpose of repairs, purchase or reconstruction, the deduction on interest payment will be available for both residential and commercial properties.

This information is real valid information for the owners of multiple properties across the country and can be of use when considering home loans and tax benefits.

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