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5 Government-Backed Schemes That Encourage Property Investment in India

 

Property Investment in India

Planning for property investment in India can make you feel confused sometimes as there are many things attached to it and you're not the only one. Navigating the property market, balancing finances and legal paperwork, and picking the right location can be complex.

Fortunately, the Indian government has rolled out several initiatives to ease prospective property buyers' paths. These programs are intended to support the real estate industry and encourage homeownership. Let's explore them to understand your investment options better.

1. Pradhan Mantri Awas Yojana – Urban 2.0 (PMAY-U 2.0)

Building upon the original "Housing for All" mission, PMAY-U 2.0 aims to complete previously approved housing projects while expanding coverage to more urban middle- and lower-income groups.

The updated version focuses on structured and timely affordable housing development through improved financial planning and strict deadlines.

Major Benefits:

  • Ensures a consistent supply of affordable homes, meeting the needs of homebuyers and renters in urban and semi-urban locations.
  • Encourages builders to resume delayed or halted construction work, reducing uncertainty and improving investor trust.
  • Spurs new residential developments in well-connected suburban areas. 

2. Pradhan Mantri Awas Yojana – Gramin (PMAY-G)

PMAY-G targets rural communities, offering permanent housing solutions to families in makeshift or vulnerable structures. The initiative strengthens rural infrastructure while pursuing the broader Housing for All goal. 

Key Highlights:

  • Grants of up to ₹1.3 lakh for hilly terrains and ₹1.2 lakh for plains.
  • Promotes sustainable, eco-friendly building methods.
  • Backed jointly by central and state governments to enhance reach and impact.

3. SWAMIH Investment Fund

Struggling housing projects often deter buyers. The Special Window for Affordable and Mid-Income Housing (SWAMIH), introduced by the Ministry of Finance in 2019, offers a solution. It aims to complete around 100,000 delayed units nationwide.

According to Finance Minister Nirmala Sitharaman, half of these homes are already completed, with the rest expected by 2025. These homes fall under the affordable and mid-income categories.

Benefits at a Glance:

  • Provides the essential last-mile funding to projects stuck mid-way.
  • Builds investor confidence, particularly for under-construction properties.
This is especially useful if you're considering buying homes in high-demand investment hubs like Bangalore or Noida.

4. Credit Linked Subsidy Scheme (CLSS)

An essential part of the PMAY-Urban program, CLSS offers direct financial relief via interest subsidies on home loans.

Why It Matters:

  • Families in the Economically Weaker Section (EWS) and Lower Income Group (LIG) can get an interest subsidy of up to 6.5%.
  • Applies to home loan amounts up to ₹12 lakh.
Ideal for first-time buyers or those planning to purchase a second home, CLSS significantly lowers the overall cost burden.

5. State Housing Programs

Many Indian states implement their own affordable housing schemes based on regional needs. These localized schemes complement national programs and offer attractive investment options.

Notable examples include:

  • Delhi Development Authority (DDA): Housing opportunities through lottery-based schemes.
  • Maharashtra Housing and Area Development Authority (MHADA): Budget-friendly homes in Mumbai and other urban centers.
  • Other examples are the Tamil Nadu Housing Board, Gujarat Housing Board, etc.
These schemes are investor-friendly, offering subsidized rates in desirable city areas. 

REITs: An Emerging Property Investment Option

In addition to traditional real estate investment in India, many are turning to Real Estate Investment Trusts (REITs) for portfolio diversification. REITs allow investors to earn from commercial properties without owning the asset physically. Wondering which are the best reits in India to consider? The Top names in the list include:
  1. Embassy Office Parks REIT
  2. Mindspace Business Parks REIT
  3. Brookfield India Real Estate Trust

Are REITs worth it?

Regulated by SEBI [Securities and Exchange Board of India], REITs offer regular dividend income and are an appealing choice for investors looking for low-entry alternatives to real estate. The under-mentioned benefits are key perks of REIT :
  • Lower investment threshold than buying physical property.
  • Income generation through consistent dividends.
  • Easy liquidity as units are traded on stock exchanges.

Is Property in India a Smart Investment?

Real estate remains a go-to investment option in India because it generates passive income, provides tax savings, and stabilizes investment portfolios. However, to get started with any investment, it's essential you do your research carefully and assess potential risks.

Final Thoughts

When considering property investment in India, it's not just about choosing the proper city or price point, government schemes play a pivotal role in shaping the market. These initiatives make the real estate industry more transparent and accessible.

Whether you're planning to invest, buy, sell, or rent, letWizard, a RERA-certified platform, guides you every step of the way. We make it simpler and safer to invest in real estate in India. Get in touch with us today and start your journey of buying and selling property.


Location: India

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