There are many of the non-resident Indians who dream to own a property in India. Irrespective of investment or a place to call home when they visit India. However, buying property in India as an NRI seems challenging especially for those who are not much familiar with rules and regulations. As you might understand that NRI is an Indian citizen who lives in abroad for employment, business or for any other reasons. They live outside India for an uncertain period of time. NRI term can also be used for students studying in abroad. With this blog, we are going to discuss everything important about buying a property in India when you are an NRI.
What types of property can NRIs buy?
NRIs are allowed to buy both commercial and residential properties in India. However, NRI property investment in India can also include apartments, houses and commercial spaces. But one thing is important to note that NRIs are not allowed to buy agricultural land, plantation property or farmhouse. If an NRI wishes to have such type of property, then they can inherit it or receive it as a gift from Indian resident.
Documents required
In order to buy property in India, NRIs are required to have specific documents prepared. Here are some of the essential documents that NRI property purchase guidelines has advised:
- Passport: this document is required to prove that you are actually an NRI.
- PAN card: this document is important for tax purpose.
- PIO/OCI card: if you are a person of Indian origin (PIO) or an Overseas citizens of India then you must have this card.
- Address proof: any of the documents that shows your residential address in abroad.
- Photographs: some of the recently clicked passport sized photos.
These are some of the important documents that you need to have to obtain ownership of any property in India.
How to fund the purchase?
There are some of the Rules for NRI buying property in India as you have different options to fund your property purchase in India:
- Self-funding: you have the first option to use the money saved in your Non-Resident External (NRE) or Non-Resident Ordinary (NRO) account. These accounts will be helpful to remit funds from abroad to India.
- Home loans: there are different Indian banks and finances agencies who offer loan to NRIs. You are required to meet the eligibility criteria such as minimum salary requirements, work experience, age limits etc. Another point to note is that the interest rates, loan amounts and tenure will be different as per company or lender terms.
- Payment mode: all the payments that you make should be in Indian Rupees (INR) through NRE, NRO or Foreign Currency Non resident (FCNR) account. This helps to comply with the foreign exchange management act (FEMA) regulations.
- Power of attorney: as it is not possible for you to be present in India to complete the transactions, you have the option to give Power Of Attorney to a trusted person in India. POA will be able to sign all the documents and manage the deal on your behalf.
These are some of the Rules for NRI buying property in India make sure to follow them correctly.
Legal verification
It is important do the legal verification of the property as it can avoid future disputes. Here’s what you need to check:
- Title deed: make sure to check that the seller is the owner of the property and it is free of any encumbrances.
- Approvals: check about the approvals required from local authorities.
- Tax receipts: verify that all of the property taxes are up to date and paid.
- Encumbrance certificate: this certificate is required to show that the property is free from any kind of legal issues and monetary liabilities.
Registration of the property
Once you have signed the purchase agreement and made the final payment. The next step is to register the property with the sub registrar’s office. However, there are some of the registration steps required to follow:
- Stamp duty: This is actually a tax that is paid to government and it also differs from state to state.
- Registration fees: this is fee is important to be charges for property registration and this also varies on the basis of state.
The final registration documents will decide the ownership of the property.
Repatriation of funds
If you decide to sell the property and want to repatriate the money then you have the option to remit up to USD 1 million per financial year. But you have to meet certain conditions. You will need to have certificate from a Chartered accountant and proper documentation which will ensure smooth repatriation.
Seeking professional help
NRI property investment in India can be complex sometimes especially when you are not much familiar with Indian laws and regulations. It is recommended that you seek some professional help such as reputed real estate agent, legal advisor, or financial consultant which can make this process much smoother and easier for you.
It is a rewarding investment Buying property in India as an NRI but you have to create a perfect plan and adhere to legal requirements. This guide is presented to you to help you move with planned steps and make informed decision. Additionally, it helps you to understand the process thoroughly.
