Construct Your Own Home to Save Both Money And Income Tax

By | May 18, 2023

You can make more profit in selling your own home after constructing it right from scratch. This is a much better option when compared with the choice like buying your own home and renovating it. With the new home you are going to get an exemption from value-added tax and it is going to save you a lot of money. You need to be very careful to play this game. The tax authorities shall not see this exercise that is done for the sake of making profit. If you want a wide capital gain tax on selling your own home, you shall prove that you are not doing it just for the sake of profit. You need to satisfy one condition to save from the capital gain tax on selling the property. You shall stay in that home until the entire period of ownership. To get an exemption from the capital gain tax the property is not brought for the sake of purely making profit. Instead they shall be bought for the sake of living as a permanent home.

You can live in your first home and construct the new one and get an exemption from capital gains tax. This is possible only when you are able to complete the new construction within 12 months. If you are unable to do this you can stay in the new house under construction in a temporary accommodation. It is better to live in the new home that you how constructed for more than a few months say a year or two before putting it for sale. This is the safest way to avoid tax issues. You can establish this as your own home from a long time by getting the official bills to the permanent address. This allows you to record your home as a permanent home as per government records.

You need to have a different kind of mortgage loans to construct your own home. You can consider taking a short-term loan for buying materials and to pay the labour bills. Once of the house is completed you can enter into long-term agreement with the lenders to pay it back over the time. During the construction you are going to get the market is loan in different phases. It is possible to get the approval of each phase only after completing the previous phase. The advantage of self-building home is you are going to construct your home as per your taste. This is not going to waste your type apartment and is going to reflect your likes and dislikes.