Tips on Property Buying for NRI’s

Buying the property in India
Yes, a non-resident Indian can buy either a residential property or a commercial property in India. An NRI however cannot buy agricultural land, plantation land or a farm house in India. Further, there is no limit on the number of residential or commercial properties that an NRI can purchase in India.

 

Do NRI need RBI permission?
No. RBI permission is not required to buy residential or commercial property.

Funding the purchase
Payment for the purchase of property can be made either through the balance in the Foreign Currency Non-Resident FCNR account, Non Residential External (NRE) account or a Non Resident Ordinary (NRO) account  or by way of funds remitted to India from abroad through regular banking channels.

Repatriation
Repatriation of original investment in respect of properties purchased by foreign citizens of Indian origin on or after 26 May 1993 will be allowed to be remitted up to the consideration amount originally remitted from abroad provided the property is sold after a period of three years from the date of the final purchase deed or from the date of payment of final installment of consideration amount, which ever is later.

Selling Property
A NRI or a PIO can sell an immovable property to other NRI, PIO or a person residing in India without any hassles or permission from the Reserve Bank of India.

Renting Property
Yes. The NRIs / PIOs can freely rent out their immovable properties in India without seeking any permission from the Reserve Bank of India. Reserve Bank has granted general permission for letting out any immovable property in India. The rental income or proceeds of any investment of such income are eligible for repatriation and hence the rental income being a current account transaction is freely repatriable outside India.

Power of Attorney
It will be wise if you give the power of attorney to an Indian resident you trust if you only visit the country once in a year or so. If, in your absence, any paper work that requires your presence like registration of property, rental or leave and licence agreement etc. is required, it can be handled by the power-of-attorney holder.

Home Loan
NRIs can take a home loan from an Indian institution approved by the National Housing Bank (NHB) and loan repayment can be done either through inward remittances, debit to a NRE/FCNR/NRO account, via rental income earned in India or by borrowing from close relatives residing in India. The quantum of loans, margin money and the period of repayment is at par with the housing loans provided to residents in India.

Quick Search