How to use your retirement fund to fund your home purchase

While most employees have a retirement fund account, few are aware that they can withdraw from the fund for a variety of housing-related purposes.

1 bhk flat for rent in kharghar, there are various sources from which you can finance the purchase or construction of a home, from a loan from friends and family to a home loan. Employees who contribute to their retirement fund have an additional option to finance the purchase of a home.

How to use your retirement fund to fund your home purchase

It can be written off from the balance of the pension fund account under certain conditions and within certain limits. Withdrawals can be used for various purposes such as buying land or a house (ready to move in or under construction) or building a house. The scheme also allows you to withdraw your EPF balance to pay off your home loan.

PF withdrawal for the purchase of real estate

An employee who has deposited into a retirement account for at least five years can withdraw money to buy land and / or build or buy a home. The amount may be charged for building a house on land owned by you or your wife, or jointly by both.

The amount you can withdraw will depend on why you are withdrawing money. When purchasing a lot, the amount available to collect is capped at 24 months base salary and charitable grant (DA). However, the withdrawal amount in no case can exceed the value of the prize.

In case you want to take advantage of the option to opt out of buying or building a home, availability increases to 36 months of base wage and DA, with the maximum still capped at the cost of the home. It is important to note that real estate cannot be acquired jointly with anyone other than a spouse to be withdrawn from the pension fund.

If funds are withdrawn from the pension fund account, construction must begin within six months and be completed within 12 months after the last tranche of the withdrawal. In the event that you intend to purchase a house that is ready to move, the purchase agreement must also be concluded within six months. Withdrawals for purchase / construction can be done in one or more installments, depending on the circumstances.

PF withdrawal for a member of a real estate company

In addition to the withdrawal options available to you individually, you can also take advantage of the withdrawal option from your EPF account if you are a member of a cooperative company or registered real estate company. This retirement opportunity can be used to purchase land to build a condominium from the government or any approved government agency.

The same object is available for the purchase or construction of a residential building. To be eligible for this opportunity due to its membership in the company, the company must have at least ten members. The maximum withdrawal amount allowed under this program is limited to 90% of the accumulated balance in your EPF account, however, depending on the value of the purchased asset.

The opportunity to go out as a member of a cooperative society cannot be granted if the member has not contributed to the EPF program for at least three years and the total accumulation of the member with his spouse if the spouse is also a member, e.g. minimum Rs 20,000 from the date of the withdrawal request.

This remedy can only be used once in a lifetime. Under this program, you may receive partial payments on any loan taken for this purpose through your EPF account, provided you have sufficient balance in your account.

How to use your retirement fund to fund your home purchase

PF retreat for building a house

Those who have worked as members of the EPFO ​​for five years can withdraw some of their PPF money to build their home. In order to withdraw money, the house must be registered in the name of the participant or his spouse.

To determine the amount for those who want to receive money from PPF to build a house, the lesser of their basic salary and the allowance for 24 months or the actual cost of buying land and buildings, or the sum contributions from the employer and employee with interest.

PF withdrawal for home renovation

You also have the right to withdraw money from your savings account, make additions or improvements to an apartment building that already belongs to you or your wife, or both. This conclusion can only be used five years after the completion of the house.

The house you want to improve doesn’t have to be the same.r that you took advantage of the ease of inference. You can take advantage of this exemption to improve your home even if you haven’t taken advantage of the exit facility to buy or build that home.

The amount you can withdraw to improve or supplement an existing home is limited to 12 months of basic salary and DA, depending on the cost of that improvement.

You can also use the withdrawal option again only 10 years after the first withdrawal to add / improve an existing home, subject to the same eligibility criteria in relation to the amount. Any amount withdrawn from your EPF account that is not used for the above purposes must be returned to the EPF account.

Withdrawal of the PF to repay a home loan

The emergency fund regime allows you to take advantage of the withdrawal option to pay off the outstanding balance of a mortgage contracted by you or your spouse for one of the purposes indicated above. The amount cannot exceed 36 months of basic salary and DA.

This revocation can only be done to repay mortgages contracted by members and / or spouses with designated entities such as state and state governments, registered cooperatives, National Housing Council. , nationalized banks, state financial institutions, municipal corporations. or any other development agency for buying a home. This benefit is available after at least 10 years of EPF contributions.

 

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