NRI real estate investment is an important avenue to generate income for Non-Resident Indians. It gives them a good source of income and provides them with an incentive to settle in India if they choose to do so. Moreover, the implementation of the RERA and Benami Property Act has made the Indian real estate market more transparent, attracting more and more NRI investors to this sector. In addition, NRIs can avail different tax benefits, such as exemption from paying wealth tax, when the property bought is declared as self-occupied.
Nature of Property
First and foremost, as an NRI, you can invest in any residential or commercial property for sale in India. There is no restriction to owning a residential or commercial property subject to proper documentation. However, you cannot buy any agricultural land, farmhouse, or plantation property due to governmental regulations. So, the best NRI real estate investment option is residential property. It is important to note that if an Indian resident owns farmland or agricultural land and becomes an NRI in the future, their NRI status will not disentitle their agricultural land or farmland ownership.
Choosing a Residential Project
Many residential projects are available in the market. Some are completed and ready to move in projects, while others are under construction and pre-launch residential projects. NRI real estate investment in India can be lucrative if you invest in pre-launch projects, as they are usually available at a comparatively lower price. Moreover, when buying property in India, look into the agreeable discounts that the developers and promoters of the project give at the pre-launch stage. So, you must research the Indian real estate market as an NRI to see what all properties are available and suit your requirements.
Mode of Payment When Buying Property in India
NRI investment in real estate in India involves a lot of capital, and the transactions need to be done through Indian banks; thus, you would need an NRE/NRO account in an authorised Indian bank. The two types of accounts differ in the sense that an NRE account allows you to use your foreign earnings to maintain and perform overseas transactions in India. On the other hand, an NRO account involves managing your earnings made in India. You can opt for either of the two since it depends upon the type of utility that you require.
According to the RBI guidelines, as an NRI home buyer, you can claim around 80% of the total property funds (depending on credit score and other factors) from Indian banks as a loan. You must arrange the remaining 20% of the property value from your income sources. However, the loan amount cannot be directly credited to your bank account and would be kept in an escrow account of the seller. Furthermore, the loan repayment can be made using NRO or NRE accounts.
Appointing a Power of Attorney
NRI investment in real estate In India can be a complicated process. Appointing a power of attorney in India will take care of all your property-related work in India and reduce your burden to visit the property. However, there should be a specific performance that will limit the powers of the local POA. You can have a power of attorney registered in India and bestow the specific performance to any of your relatives in India. Otherwise, you can follow the process of notarisation through the embassy of the foreign country you currently reside. Alternatively, if you don’t have any relatives in India, then you can even appoint the developer of the residential project as your POA, who will execute the respective documentation. This eases the whole process of buying property in India for NRIs.
For general purposes and initiating the process of buying property in India, you will need these basic documents - your Indian passport, green card or PIO/OCI card and your PAN card. The PAN card is mandatory for property transactions. Moreover, suppose you are availing of a home loan. In that case, you will need to show your passport or OCI/PIO card, along with a work permit/employment contract to establish that you are a resident of the foreign country, last six months' payslips, income tax returns, last 1-year bank statement of NRE or NRO accounts, and the bureau report of the country of residence.
Legal Due Diligence
It is important to do thorough due diligence on the whole property. This includes the documentation of the property concerning the ownership and the approved building plan, environmental and height/aviation clearance, etc. To ensure that the transferor's title is correct, you can do a title certification search of the property for sale in India. Moreover, a no-dues-certificate must be taken regarding existing electricity bills, water charges or property taxes. Everything should be paid and cleared, and there would be no existing mortgage on the property that might land you into trouble.
Real Estate Investment in India has been very profitable for NRIs due to various underlying factors, such as rupee depreciation, appreciation on investment in future, and attractive schemes and deals offered to NRIs by builders. This complete guide to NRI investment in India will give you a comprehensive approach to property buying in India.
If you are an NRI looking to buy property in India, you can look at the wide range of properties by Adani Realty. Whether you are looking for residential or commercial properties, Adani Realty can provide you with the same across the best cities to buy property in India, i.e., Ahmedabad, Mumbai, Gurugram, and Pune. The luxury residential projects offered by Adani Realty, such as Western Heights, Monte South, Oyster Grande, etc., are ready to move in. Moreover, some projects are currently under construction, such as Platinum Towers and Samsara Vilasa. You can book your flat in the ongoing apartments as well.
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