NRI real estate investment is growing in India with the improvements in the Indian real estate market. The government has also introduced reforms in the Land Acquisition Act, the Real Estate Regulatory Bill, relaxation of FDI rules, etc., which have improved the overall property market dynamics for NRI investment in India. NRIs invest in India, as they earn a considerable amount of passive income in the form of rentals. Moreover, they also can settle in India if desired. The property market in India is showing a better growth trajectory, so it is the best time for NRI investment.
But before buying property in India, here are seven things that NRIs should consider.
Type of Properties an NRI can buy
Due to governmental regulations, NRIs cannot buy any agricultural land, farmhouse, or plantation property unless RBI and the concerned central or state government approve the request. Therefore, the best investment option for NRIs is residential/commercial property.
Financial planning is the most crucial step toward purchasing a property. You should have an impeccable financial framework that will help you track every aspect of your spending and help you save better for your property investment in the Indian real estate market. Mapping out your finances also gives you an overall idea of how much you can spend on real estate without infringing upon your emergency funds.
Loans and payment method
Another crucial aspect that NRIs should keep an eye on is the transaction medium. Since you will be buying property in India, all the transactions should be done in Indian currency through Indian banks. To make this happen seamlessly, you must have an NRE/ NRO account in an authorised Indian bank. The NRE account assists you in converting and utilising the income in India from abroad. As per the RBI guidelines, the NRI home buyer can claim around 80% of the total property funds (depending on the credit score and other factors) from the Indian banks as a loan. The person must arrange 20% of the property value from his income sources. The builder can help you get loans at lesser interest rates through tripartite agreements. So, you can also opt for that and reduce your financial burden.
The same taxation rules govern NRI investment in real estate in India and claim tax benefits under section 80 C of the Income Tax Act, 1961, just like any Indian citizen. The property bought by an NRI is exempted from taxation if it is declared for self-use, but it will be deemed a taxable asset if the property is rented. Similarly, if an NRI invests in more than two properties, only one property can be declared to be for self-use.
Best City to Buy Property in India
There are many lucrative residential properties for sale in India. The city and location of the property also play an important role in deciding its overall worth. Better connectivity, weather and infrastructure make a city strategic for real estate investment. NRI investment in real estate would be most fruitful in cities such as Ahmedabad, Mumbai, Gurugram and Pune, owing to these cities' overall social and corporate infrastructure. The rental income is flourishing in these cities due to ample job opportunities. So, you should consider the future developmental prospect of a city before investing in a property for a higher return on investment.
Power of Attorney (POA)
Appointing a power of attorney is crucial for NRIs because they do not reside in the country. So, a POA plays a significant role in manoeuvring through the transactions and all the documentation on behalf of the NRI. The POA will act in the best interests of the NRI and act as the authoritative figure for signing documents, inspecting the property and making decisions in consultation with the NRI. This eases the whole process of buying property in India and brings in accountability.
Choosing a reputed builder
Builders’ reputations showcase their commitment to customer satisfaction, an essential factor in building trust among prospective buyers. Adani Realty is the leading real-estate builder in India with an impressive track record of delivering some of the best-in-class luxury properties. Since NRI real estate investment in India involves a lot of capital investment, a reputed builder will do all the required due diligence to ensure seamless property registration in your name.
Real estate investment in India has been very profitable for NRIs since the market is recovering with a higher return on investment. To push foreign investment in India by encouraging NRI investments, the government has also brought about changes in the property market. The property builders also give NRI exclusive deals, a great incentive for NRI real estate investment in India. If you are an NRI looking to buy property in India, the above points will help you make precise decisions as per your needs and wants. Ensure that you have all the authentic legal documents, an NRE account for foreign transactions, a financial plan, and a trustworthy power of attorney to act on your behalf. All these steps help you maintain a seamless track of how you want to invest in Indian real estate.
Residential Projects in Gurugram-
Traditionally, real estate has always been a safe investment compared to other investments, and currently, the Indian real estate industry is at the pinnacle of success. This sector has become a hot favourite for investments for NRIs. Today, they have an option of investing not only in industries such as the manufacturing of medicinal drugs, EVs, IT, hotels, etc., but also in commercial and residential real estate industries.
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