Home / Money / Personal Finance /  How to use your PF (provident fund) for property purchase

The Provident Fund (PF) balance can be a good avenue for fund raiser for a salaried person looking to purchase property. As per the PF withdrawal rules for property purchase, one can withdraw from the PF up to 90 per cent of one's PF balance for buying a home or for home construction on a land. But, the land has to be owned by the PF account holder, or by his wife or by both. However, to become eligible for the PF withdrawal for property purchase, one must have contributed in its PF account for at least five years. This PF withdrawal facility is also available for all EPFO members working in the private sector. So, all PF and EPF account holders are eligible for provident fund finance for property purchase.

Speaking on the condition for PF withdrawal for property purchase Mumbai-based tax and investment expert Balwant Jain said, "PF withdrawal from the PF balance is allowed for property purchase if the salaried person has completed five years of continuous contribution in one's PF account. This facility is available for both plot buying or for the construction of home or for the home buy."

Jain said that PF withdrawal limit will depend on the purpose of property purchase. He said that for buying a plot, the PF withdrawal should be either 24 months basic salary of the employee plus Dearness Allowance (DA) or the actual price of the plot, whichever lower, will be allowed as PF withdrawal amount from one's PF balance.

On how much one can withdraw from one's PF or EPF balance for home buy or home construction SEBI registered tax and investment expert Jitendra Solanki said, "For purchase of construction of home, PF or EPF account holder can withdraw one's 36 months basic salary plus DA or the actual price of the land or amount required for construction, whichever is lower. In any case, PF withdrawal limit can't be more than 90 per cent of the PF/EPF balance." Solanki also made it clear that after PF finance for home buy or home construction, the property has to be in the name of the PF account holder or the property be purchased jointly with PF account holder and its spouse.

On PF withdrawal for home construction Balwant Jain said that the land has to be in the name of PF or EPF account holder or his wife or jointly owned by both. In no other case, PF withdrawal is allowed for home construction, he said. Jain also said that PF withdrawal for home loan repayment is also allowed.

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