Laws Prevailing NRI Real Estate Investment in India You Must Know About
India is considered as among the topmost tempting real estate investment destinations as increasing number of NRIs are investing in locations in India. As per a research by Square Yards, the overall Non-resident Indian investment in top key cities is expected to gain around USD 11.5 million in 2017. Special thanks to the latest real estate laws for making the purchasing of a property for a Non-resident Indian easier than ever before. Anyone carrying Indian passport is allowed to invest in Indian real estate except for the property which is not an agricultural land, a farmhouse or a plantation property. The NRIs are advised to understand the prevailing policies, laws and reforms well, while there is a favorable market scenario for a real estate purchase. There are some key rules to help the non-resident Indian with the process.
One of the key considerations is understanding of the financial landscape when a non-resident Indian is investing in Indian real estate. Are you an NRI and looking for investing in Indian property? Then you are just at the right place. Here you will get some of the worth mentioning tips to consider while stepping towards property purchasing.
Must know laws for NRI real estate investments
· Regulatory act: Do you possess an Indian passport? Then you do not need to seek for prior permission for making a property investment in India. The honourable Reserve Bank of India has enacted some simple but attractive laws to magnetize more foreign investments. There are rules under Foreign Exchange Management (FEMA) to govern real estate transactions.
· Types of various properties to invest in: There is no restricted number of properties for the non-resident Indians to invest in. A person of Indian origin (PIO), as well as an NRI, is allowed to purchase commercial and residential properties both as many as they want. However, this is to be remembered that there lies a restriction on foreign investment when the property is an agricultural land, a farmhouse or a plantation property. An NRI is only permitted to invest in such properties if it is gifted or inherited.
· Financial funding and transactions: Remember, every transaction related to property investments in India is required to be done through Indian banks in Indian currency. The person needs to have an NRI account in a nationalized Indian bank. If the paperwork is clean, an NRI would find no difficulty to avail bank loans for the purchase. Under several financial institutions in India, there are a number of NRI home loan options that are offered. In case you are getting your property funded, then make sure that you own minimum 20% of the property value to invest of your own. Remember you are allowed to take maximum 80% of the property value.
· Power of attorney: You are required to give power of attorney to a trusted associate or to your builder, in case you are purchasing a property under construction. You are advised to take the support from your lawyer to word the document aptly making your investment secure and leaving no chance of forgery, while the property is being developed.
· Tax benefits: Even If you are a non-resident Indian, you’re allowed to relish most of the tax benefits that an Indian citizen enjoys. It is considered as the short-term capital gain and the earnings through the taxable properties only if you sell the property within three years of purchase. But in case you sell the property after three years, you will have the choice of reducing the long-term capital gains by investing in another property.
CREDAI, The Confederation of Real Estate Developers Associations of India organizes exhibitions for non-resident Indians on a regular basis. It helps them to go through various investment options that come with spot loans from top banks. Easy investment options along with reduced down payment value are also offered. Therefore, it would be better if you crosscheck all the given offers from CREDAI before investing in real estate in India.
If you are an NRI and planning for investing in real estate in India then it is wise to go through the rules carefully to avoid unwanted mess before making a purchase.