If you own multiple homes in India, Budget 2025 brings great news. The government has removed notional rent tax on the second self-occupied property. This means you can own two homes without paying extra tax.
Did You Know, Nearly 35% of homeowners in metro cities left their second homes vacant due to tax concerns. This new rule is expected to increase second-home occupancy.
Previously, the tax department assumed you were earning rent from your second home, even if it was vacant. This led to unnecessary tax burdens. Now, you can own two self-occupied homes without paying tax on their deemed rental income.
What’s Changed in Budget 2025?
This new rule simplifies tax compliance for homeowners. Earlier, the second home was taxed based on notional rent, even if it wasn’t rented out. Now, that tax burden is gone.
Before vs. After Budget 2025
| Feature | Before Budget 2025 | After Budget 2025 |
|---|---|---|
| Second self-occupied home tax | Taxed based on notional rent | No tax on the second self-occupied home |
| Required proof | Had to justify why it wasn’t rented | No need for additional proof |
| Tax liability | Higher for homeowners with multiple properties | Lower tax burden |
This change makes homeownership more attractive for investors, working professionals, and families.
Who Benefits from This Tax Relief?
Many Indian homeowners will benefit from this policy change. Here’s who gains the most:
- Salaried professionals – Those working in different cities can now own homes in multiple locations without extra tax.
- Retired individuals – Senior citizens with a second home for vacations or family visits save on tax payments.
- Real estate investors – People buying second homes for long-term investment face fewer tax hurdles.
- Families with multiple homes – Homeowners can now own property in different cities without worrying about additional tax liability.
This move will boost demand in the real estate market, making second-home investments more lucrative.
How to Take Advantage of This Rule?
Homeowners should follow these steps to maximize tax savings:
- Declare both homes as self-occupied – Mention them correctly while filing your tax returns.
- Avoid unnecessary rental declarations – No need to show notional rent on the second property.
- Plan future property investments wisely – If you’re considering buying another home, this is the right time.
This tax relief can help homeowners save thousands of rupees every year.
What Does This Mean for the Real Estate Market?
- More property purchases – People will be encouraged to invest in real estate.
- Reduced tax burden – Homeowners save lakhs of rupees over time.
- Growth in real estate demand – Cities like Mumbai, Delhi, and Bangalore may see more second-home buyers.
Also Read: Save Lakhs in Taxes: Why You Should Form a Hindu Undivided Family HUF Today
This tax relief makes owning multiple homes a smart financial decision. If you’ve been delaying a second-home purchase, now might be the best time to invest.With this change, homeownership in India just became more rewarding. Make sure to leverage this benefit before the next tax season.
Disclaimer
The information provided in this article is for general informational purposes only and does not constitute legal, tax, financial, or other professional advice. While every effort is made to ensure the accuracy and reliability of the information, laws and regulations may change, and individual circumstances vary.
Readers are encouraged to consult with qualified professionals or official government resources for personalized guidance regarding their specific situations. The author and publisher disclaim any liability for decisions made or actions taken based on the information provided herein.
