EPFO Simplifies Home Purchase Rules: Members Can Withdraw 90% of PF Balance
In a significant move, the Employees’ Provident Fund Organisation (EPFO) has eased withdrawal rules, allowing members to withdraw up to 90% of their Provident Fund balance for purchasing or constructing their first home. This change is expected to boost the housing sector and provide financial relief to first-time homebuyers.
EpfoHome PurchaseProvident FundReal EstateFirsttime HomebuyersReal Estate PuneJul 16, 2025
The change comes through an amendment under Para 68-BD of the EPF Scheme, 1952, and is expected to boost the housing sector while providing financial relief to first-time homebuyers.
What Has Changed?
Under the earlier rules, members were eligible for housing-related withdrawals only if:
- Their EPF account was at least 5 years old.
- The withdrawal amount was limited to the lesser of either 36 months’ contribution or the cost of the property.
- Members involved in housing schemes were barred from withdrawing for home purchase.
Now, the new rule introduces the following key relaxations:
- The account should be only 3 years old to be eligible.
- Members can withdraw up to 90% of their EPF corpus.
- This facility will be available only once per member.
Big Relief for Middle-Class Homebuyers
The revised policy is expected to greatly benefit the middle-income and salaried class, especially those struggling to arrange funds for down payments. With housing prices on the rise, many first-time buyers face difficulties in securing large lump sums to avail home loans. EPFO’s updated rule provides them with a reliable financial cushion.
However, experts caution that members must consider the impact on their retirement savings before opting for large withdrawals. A balanced decision, they say, can help meet current needs without compromising future security.
Other Key Changes Introduced by EPFO
In addition to housing-related rules, EPFO has made several employee-friendly reforms to simplify fund access:
- Easier Withdrawal for Medical, Education, and Marriage: The process has been streamlined for faster access to funds during major life events.
- Emergency Withdrawals via UPI or ATM: Members can now instantly withdraw up to ₹1 lakh in emergencies.
- Auto-Settlement Limit Increased: The auto-approval limit has been raised from ₹1 lakh to ₹5 lakh.
- Simplified Claim Process: The claim settlement procedure, which previously involved 27 verification points, has now been reduced to 18, ensuring most claims are processed within 3 to 4 days.
Positive Outlook for Housing Sector
Experts believe that this progressive step will spur demand in the real estate sector, especially affordable housing. The liquidity generated by EPF withdrawals could help revive housing sales and stimulate related industries like construction, cement, and home furnishings.
Frequently Asked Questions
What is the new rule for EPFO withdrawals for home purchase?
The new rule allows EPFO members to withdraw up to 90% of their Provident Fund balance for purchasing or constructing their first home, provided their account is at least 3 years old.
Can members withdraw funds for home purchase more than once?
No, this facility is available only once per member.
What other reforms has EPFO introduced besides the housing rule?
EPFO has introduced easier withdrawals for medical, education, and marriage, emergency withdrawals via UPI or ATM, increased auto-settlement limit, and simplified claim processes.
How will these changes impact the housing sector?
These changes are expected to boost demand in the real estate sector, especially for affordable housing, and stimulate related industries like construction and home furnishings.
What should members consider before making large withdrawals?
Members should consider the impact on their retirement savings and make a balanced decision to meet current needs without compromising future security.
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