Goa Regulation of House Building Advance Act, 2021

1. Background and Objective

The Goa Regulation of House Building Advance Act, 2021 (the Act) was introduced by the State Government to formalise the procedure for granting housebuilding advances to government employees and certain categories of privatesector staff. The Act replaces the adhoc system that existed earlier and aims to provide a transparent, equitable and timely mechanism for housing finance.

Key objectives include:

• Facilitating home ownership for employees, especially those on modest salaries.
• Ensuring uniform eligibility criteria across departments.
• Providing a clear repayment schedule linked to the employees service tenure.
• Preventing misuse of advances through strict documentation and audit provisions.

2. Scope of the Act

The Act applies to:

• All permanent and regular employees of the Government of Goa.
• Employees of autonomous bodies and corporations wholly owned by the State.
• Employees of private establishments that receive a subsidy from the Goa government for housing assistance, as specified in the rules.

Contractual or temporary staff are expressly excluded unless specifically covered by departmental orders.

3. Eligibility Criteria

To qualify for an advance, an employee must satisfy the following conditions:

Employees serving in remote or tribal areas may be granted relaxation of the landownership condition, subject to approval from the Regional Housing Officer.

4. Application Procedure

1. Submission of Form: The employee fills out the standardized House Building Advance Application (FormHB01) available on the official portal.
2. Document Checklist:
   • Proof of identity (Aadhaar, PAN).
   • Service certificate indicating tenure.
   • Land title deed or sale agreement.
   • Bank account details (for credit of the advance).
   • Affidavit confirming no existing housing loan.
3. Verification: The departmental officer verifies the documents and forwards the application to the State Housing Authority (SHA).
4. Sanction: SHA evaluates the request against the eligibility matrix and, if satisfied, issues a sanction order within 30 days.
5. Disbursement: The advance amount (maximum 80% of the estimated construction cost or a ceiling of 12lakhs, whichever is lower) is credited directly to the applicants bank account.

5. Quantum of Advance & Interest

The Act caps the advance as follows:

• Up to 12lakhs for all eligible employees.
• For staff earning above 45,000 basic, the limit is reduced to 8lakhs.

Interest is charged at a nominal rate of 6% per annum, calculated on a reducing balance method. The interest component is deductible from the employees salary each month.

6. Repayment Schedule

Repayment commences from the first month after the advance is disbursed and follows a structured schedule:

• For employees with 5 years of remaining service, repayment is spread over **5 years**.
• For those with **>5 years** left, the period extends to **10 years**.

Early repayment is permitted without penalty, encouraging fiscal prudence.

7. Default & Recovery

Failure to comply with the repayment schedule triggers the following actions:

1. First Reminder: Issued after 30 days of missed payment.
2. Second Notice: Sent after 60 days, and a **penalty of 2%** of the overdue amount is levied.
3. Recovery Proceedings: If arrears persist for 90 days, the amount may be recovered through salary deduction up to 50% of the employees net salary, subject to a maximum of 5,000 per month.
4. Legal Action: Continued default may lead to filing of a suit for recovery under the provisions of the Indian Contract Act, 1872.

8. Transfer of Service

When an employee transfers to another department or to a different Staterun institution, the outstanding balance of the housebuilding advance is transferred automatically, provided the receiving department acknowledges the liability. The employee must notify the SHA within 15 days of transfer.

9. Role of the State Housing Authority (SHA)

The SHA is the nodal agency responsible for:

• Processing applications and sanction orders.
• Maintaining a central register of all advances granted.
• Conducting periodic audits to ensure compliance.
• Advising the Government on policy amendments based on utilization trends.

10. Appeals and Grievance Redressal

Employees aggrieved by a denial or adverse decision may:

• File a written appeal to the District Housing Officer within 30 days of receiving the decision.
• If unsatisfied, the matter can be escalated to the State Housing Tribunal within 60 days of the districts order.

The Tribunals decision is final and binding, subject to judicial review under the Administrative Courts Act, 1985.

11. Impact and Reception

Since its implementation, the Act has facilitated over 7,000 advances, enabling thousands of government families to construct or purchase homes. Surveys indicate a 45% increase in homeownership among eligible employees within the first two years. Critics, however, argue that the ceiling of 12lakhs may be insufficient in highcost localities such as Panaji and Margao, and call for periodic revision of the ceiling.

12. Frequently Asked Questions (FAQs)

Can I apply for an advance if I already own a house?

No. The advance is intended for building a new house or purchasing a vacant plot. Existing ownership disqualifies an applicant.

What documentation is required for a plot that is yet to be purchased?

You must submit a draft sale agreement, along with a bankguaranteed escrow that shows the availability of funds for the purchase.

Is the advance taxable?

The advance itself is not considered taxable income. However, interest paid is deductible under Section24(b) of the Income Tax Act, subject to limits.

Can a spouse also be a coapplicant?

Yes, a spouse can be a coapplicant, and the combined basic salary of both partners will be taken into account for ceiling limits.

What happens if I resign before the advance is fully repaid?

The outstanding balance becomes payable immediately. The employer may recover the amount from your final settlement, or pursue legal recovery if necessary.

13. Future Amendments

The Government has signalled intent to review the ceiling amount biennially, incorporate a provision for lowinterest loans for environmentally sustainable construction, and introduce a digital portal for realtime tracking of application status. Stakeholder consultations are scheduled for the next fiscal year.