Government Benefits for New House Construction in India (2025)
New House yojana
Building a new house in India can be a dream for many families, especially for low and middle-income groups. However, due to the rising cost of construction materials, labor, and land, it is difficult for people from weaker financial backgrounds to afford their own homes. To support such families, the Central Government of India along with State Governments has launched several housing schemes. These schemes provide financial assistance, subsidies, and loans to eligible applicants to help them build or buy a new house.
In this article, we will cover:
- Central Government schemes – PMAY, housing subsidy benefits.
- State Government schemes – Karnataka, Andhra Pradesh, Telangana, Tamil Nadu, and others.
- Eligibility criteria for these benefits.
- How much subsidy or financial support you can get.
- How to apply online/offline.
1. Central Government Support
The most important scheme is Pradhan Mantri Awas Yojana (PMAY – Urban & Gramin).
(A) PMAY – Urban (PMAY-U)
- Target: People living in towns and cities without a proper house.
- Benefit: Subsidy up to ₹2.67 lakh on home loans through Credit Linked Subsidy Scheme (CLSS).
- Eligibility:
- EWS (Economically Weaker Section) – income up to ₹3 lakh/year.
- LIG (Low Income Group) – income up to ₹6 lakh/year.
- MIG-I (Middle Income Group) – income up to ₹12 lakh/year.
- MIG-II (Middle Income Group-II) – income up to ₹18 lakh/year.
- Women ownership is mandatory in EWS/LIG categories.
(B) PMAY – Gramin (PMAY-G)
- Target: Rural poor families without pucca houses.
- Benefit:
- ₹1.20 lakh per house in plain areas.
- ₹1.30 lakh per house in hilly, difficult, or Integrated Action Plan (IAP) districts.
- Additional ₹12,000 assistance for toilet construction under Swachh Bharat Mission.
- Payments are transferred directly to beneficiaries’ bank accounts through Direct Benefit Transfer (DBT).
2. State Government Benefits
Along with PMAY, most states in India have their own housing subsidy schemes. These add extra support on top of the Central Government scheme.
Karnataka
- Basava Vasati Yojana / Rajiv Gandhi Housing Corporation Limited (RGRHCL)
- Benefit: ₹1.5 lakh to ₹2 lakh subsidy depending on category and income.
- SC/ST/BPL families get higher subsidy amounts.
Andhra Pradesh
- YSR Housing Scheme (Pedalandariki Illu)
- Benefit: Free house sites and ₹1.8 lakh to ₹2.5 lakh subsidy for construction.
- Women beneficiaries get ownership rights.
Telangana
- Double Bedroom Housing Scheme (2BHK Scheme)
- Benefit: Government provides free 2BHK houses to eligible BPL families.
- Each house valued around ₹5–6 lakh is provided free of cost.
Tamil Nadu
- Tamil Nadu Housing Board & Kalaignar Magalir Urimai Thogai Scheme (linked housing benefit)
- Benefit: ₹1.5 lakh to ₹2.25 lakh subsidy for rural and urban poor.
Other States (Examples)
- Madhya Pradesh CM Awas Yojana – subsidy of ₹1.5 lakh.
- Uttar Pradesh CM Awas Yojana (Rural) – subsidy of ₹1.2–1.5 lakh.
- Maharashtra Ramai Awas Yojana – subsidy up to ₹1.5 lakh for SC/ST families.
3. How Much Total Benefit You Can Get
When combining Central + State subsidies, you can get significant financial help.
| Location / Scheme | Central Govt (PMAY) | State Govt Subsidy | Total Benefit |
|---|---|---|---|
| Rural Areas (PMAY-G) | ₹1.2 – 1.3 lakh | ₹1.5 – 2 lakh (varies by state) | ₹2.7 – 3.3 lakh |
| Urban Areas (PMAY-U) | Up to ₹2.67 lakh (loan subsidy) | ₹1.5 – 2 lakh | ₹4 – 5 lakh |
| Telangana 2BHK | Nil (house is free) | Govt gives full house worth ₹5–6 lakh | ₹5–6 lakh |
| Andhra Pradesh YSR Housing | ₹1.2 – 2.67 lakh | ₹1.8 – 2.5 lakh | ₹3 – 5 lakh |
| Karnataka Basava Vasati | ₹1.2 – 2.67 lakh | ₹1.5 – 2 lakh | ₹3 – 4.5 lakh |
4. Eligibility Criteria (Common for Most Schemes)
- Applicant should not own a pucca house anywhere in India.
- Applicant must belong to EWS, LIG, MIG, or BPL category (as per income limits).
- Aadhaar Card, Ration Card, Income Certificate, and Caste Certificate (if applicable) required.
- Women ownership mandatory in some schemes.
- Bank account must be linked with Aadhaar for DBT.
5. How to Apply
PMAY Online Application
- Official portal: pmaymis.gov.in (for PMAY-U).
- Rural applicants: Apply via Gram Panchayat / CSC centres for PMAY-G.
State Schemes
- Karnataka: Apply via ashraya.karnataka.gov.in
- Andhra Pradesh: housing.ap.gov.in
- Telangana: Applications invited at meeseva centres / district collector offices.
- Tamil Nadu: Apply via tnhousing.tn.gov.in
6. Documents Required
- Aadhaar Card
- Ration Card
- Income Certificate
- Caste Certificate (if applicable)
- Residence Proof
- Bank Account details
- Passport size photos
If you are planning to build a new house in 2025, you can get support ranging from ₹2.5 lakh to ₹6 lakh depending on whether you apply under Central schemes like PMAY or State-specific schemes like YSR Housing (AP) or 2BHK Housing (Telangana).
- Rural poor families → ₹2.7–3.3 lakh subsidy.
- Urban families with home loans → ₹4–5 lakh subsidy.
- Special schemes (Telangana, AP) → Free or near-free housing worth ₹5–6 lakh.
By applying under the right scheme, a family can reduce the financial burden of house construction and fulfill their dream of owning a permanent home.