NRI, a Non-Resident Indian is someone who is resident outside India and for many reasons they want to buy property in India. Why not! India has one of the strongest real estate sectors among all the countries and it makes sense in investing in Indian properties. This was pretty evident at the time of recession when the Indian realty sector did not crash while the realty sectors of major economies did slow down drastically. The NRIs all the world over are aware of this fact and they want to own a property in India for nostalgia too as a property in India keeps them connected with their roots. Not only the NRIs, but there are also PIOs (Person of Indian Origin) and the OCI (Overseas Citizens of India) who are equally interested in buying property in India.
Buying property in India by the NRIs is fairly easy and the laws, rules, and regulations are fairly lenient which allows the NRIs to buy commercial or any residential properties in India. Although they can buy property without prior permission there are still some rules and regulations for the NRIs to buy properties in India. They are listed below.
– The NRIs are allowed to buy a maximum of two properties in India.
– NRIs and PIOs are not allowed to buy farmhouses, plantations or agricultural lands but they can certainly inherit them or can be gifted as well.
– They have to come down to India to buy or invest in a property or they can confer the rights to someone as a Power of Attorney.
– They are also eligible to procure home loans for buying residential plots, lands, house or apartments.
– The regulations for applying for a home loan is the same as every Indian although banks take into account their income and qualification as important criteria for the loan.
– The required documents for the procurement of a loan are copies of passport, Visa, PAN card, salary certificates, etc. There is, of course, a need for a local contact address and a power of attorney who can be your chartered accountant.
– Banks normally allow a loan of 80 to 85% of the property value as the loan amount but the payback periods are normally shorter of about 5 to 15 years as compared to 30 years for the resident Indians.
– No tax is applicable for holding properties in India by the NRIs but if rent is earned from these properties, tax is applicable.
– In case a property is sold by an NRI, a tax would be imposed on the capital gains and if the property is sold within three years of purchase, they would be liable for the short-term capital gain tax.
The above ones are basic rules for the NRIs to buy property in India. Now that you know the rules and regulations, property buying in India can be a lot easier. However, if you want to know more about the rules governing an NRI for buying a property in India,
Download the eBook “NRI’s Comprehensive Guide to Property Buying in India”.
DS-MAX Properties Pvt. Ltd. is an award-winning real estate development firm, based in Bangalore. With a dream to “Share the Joy of Living” across all sections of society, Dr. K. V. Satish set his foot on the realty industry with DS-MAX Properties Pvt. Ltd. Since its inception, DS-MAX Properties has been one of the most preferred and trusted realty developers in Bangalore.