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NRI Property Buying Checklist

Non-resident Indian

NRI Property Investment is the most discussed but least known topic. The reason being, it is considered to be too difficult. The rules and regulations ruling NRI Property Investment are different. There are two principal reasons for NRI Property Investment – 1) NRI’s would like to settle in India after retirement, and 2) they feel secure and safe to invest their hard-earned money in India compared to their home country.

What documents an NRI should check while buying a property in India?

The basic list of property documents that an NRI needed during property buying in India are:

  1. Title Deed (in the name of the seller)
  2. Sanctioned Building Plan
  3. Commencement Certificate
  4. Occupancy Certificate
  5. Tax Paid Receipts
  6. Encumbrance Certificate
  7. Khata/Mutation Documents

What documents NRIs must have to buy property in India?

Below is the list of documents an NRI needed during property buying in India:

  1. PIO/OCI Card

NRI requires an Indian passport to invest in property in India. He/she would need a PIO card if he/she is an individual, who is not a citizen of Pakistan, Nepal, Sri Lanka, Bangladesh, China, Afghanistan, Iran, and Bhutan but had owned the Indian passport.

He/she would require a PIO card if he/she is a foreign citizen whose father or grandfather was a citizen of India. In simple, if he/she holds the passport of a foreign country, he/she requires a PIO card.

  1. PAN Card

NRIs need a PAN card because they will be required to file income tax returns if they have rented out the property. Besides, if the property is sold later, the capital gains resulting from the sales would be subject to capital gains tax. Capital gains would be included in the total income while it is being taxed.

  1. Registered Power of Attorney

If you are an NRI and don’t visit India frequently, you would find it much easier to get the execution of the sale, registration, possession, and other processes done, if you give a special power of attorney to someone in the city in which you are buying a property.

  1. Proof of Address

If you an NRI you need to submit the address proof of your current residence attested by the Indian Embassy in your country of residence).

Property registration formalities for NRI

As per current property registration rules, the title deed requires to have the photograph, thumb impression, and signature of the buyer. In the absence of the buyer at the time of registration, a Registered Power of Attorney can be assigned to your relative to sign the document on your behalf. This needs to be completed before the registration date.

What are the documents required for registering a property for an NRI?

Documents required at the time of registration:

  1. PAN Card
  2. OCI/PIO Card
  3. Passport
  4. Passport Size Photograph
  5. Address Proof

What are the documents NRIs need while applying for a home loan?

If you are a salaried NRI and wants to apply for a home loan, you would need the following sets of documents:

  • Two passport size photographs
  • Address proof of the applicant and co-applicant (attested by the Indian Embassy in your country of residence)
  • Address proof (utility bills or driving license would count as address proof).
  • Past 6-months bank statement of your NRE/NRO account in India
  • Past 6-months bank statement of your account held in the country in which you work or your salary is credited
  • Salary slip of your employer
  • Loan sanction letter copies received in India and abroad
  • Self-declared residential status
  • Power of Attorney (to be executed in the format given by the bank and attested from Indian embassy)

Is TAN No required for the purchase of property from NRI?

TAN No. is not required if the property is purchased from a resident Indian. It is needed in case the property is purchased from a Non-resident Indian.

Can an NRI buy property in India without a PAN card?

PAN Card is not required for an NRI as they are non-residential Indians with Indian passports; particularly if they do not intend to invest money into any business in India. However, it is mandated by the government to own a PAN Card if:

  • An NRI is interested to invest in mutual funds in India.
  • The NRI wants to transfer the funds received from the property transactions in India to their NRE or NRO accounts.
  • They have a source of income in India that is taxable. For example; rented property

Does NRI need OCI to sell property in India?

Yes, they can but they have to pay the tax to the govt on the realize profit or gains. The Indian Govt. has provided general permission for NRI/PIO/OCI to buy a property and they do not have to pay any taxes even while buying a property in India. However, taxes have to be paid if they are selling the same property.

What is the tax rate for NRI in India?

An NRI who sells a residential property and earns capital gains are subject to pay tax, it’s the same as resident Indians. But for NRIs Long-term capital gains are subject to a TDS of 20% whereas the short-term capital gains are subject to a TDS of 30%.

Can an NRI buy any residential and commercial property in India?

Yes, an NRI can buy any commercial or residential property in India and there are no restrictions in buying the number of properties except any agricultural land, farmhouse, and plantation property. They can get the ownership of these properties only if they have been gifted or inherited from ancestors.

NRI doesn’t require any special permission to buy any residential or commercial property in India, except these two conditions:

  1. When an NRI buys any commercial or residential property in India, he/she can’t make the payment in any foreign currency. An NRI has to use the normal banking channels, or any non-resident account such as Non-resident Rupee Account (NRE) or Non-resident Ordinary Account (NRO) to make the payment that comes under Foreign Exchange Management Act (FEMA) and RBI regulations.
  2. NRIs have an option to give Power of Attorney (POA) to their friends or relatives to complete the buying process in India. The POA can be general or specific about the rights a representative of NRI can use.

The RBI’s regulations are fairly easy as well and you don’t have to take any prior permission from the authorities. The laws for any such property transaction fall under the Foreign Exchange Management Act (FEMA).

NRIs can make payment for the buying of immovable property (other than agricultural land/plantation property/farm house) out of funds received in India through normal banking channels. NRI who has bought residential/commercial property under general permission is not required to file any documents with the Reserve Bank.

An NRI can buy the property, either as a single owner or jointly with any other NRI. They must be a resident of India, otherwise, he or she is not allowed to invest in a property in India, irrespective of the second holder’s contribution.

Also, NRI may transfer any immovable property in India to a person resident in India.

What are the major complaints of an NRI during property buying?

There are some complaints from NRI regarding the behavior of the builder and other professionals. Overcharging is very common. Even the professionals doubled their fees in the case of an NRI client. Through these cheap tactics, we create a negative image of our country. In a few cases, NRI clients have left the idea of property buying after identifying the price difference.

Short Abbreviation:

  • PIO-  Person Of India Origin
  • OCI- Overseas Citizen Of India
  • POA- Power of Attorney
  • FEMA- Foreign Exchange Management Act
  • NRE- Non-resident Rupee Account
  • NRO- Non-resident Ordinary Account
  • PAN- Permanent Account Number
  • RBI- Reserve Bank of India

#NRI #investment #india #propertybuying #tips #realestate

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Buying property Real Estate Real Estate News Smart Residential Living

NRIs reshaping the Indian Luxury Real Estate Market

NRIThere is an interesting trend that has been noticed in Indian real estate market. In a market riddled by lack of demand from buyers, developers are seen launching luxury residential projects.

Resultantly, there has been an unexpected emergence of interest in the luxury residential segment which has come from non-resident Indian clienteles and buyers with deep pockets.

A lot of Realtors have joined the trend in Pune and Mumbai as well. Following the implementation of the real estate Act, the market in all parts of the country was stirred up for better or for worse.

While the transparency and authenticity in real estate investments became apparent, the risk of seeing the project ever reach completion with respect to compliance has a lot of residential home investors backing out. To make-up for the miserable loss, developers are looking to make the most of this micro-market.

The demographic for luxury projects is limited. However, this is the segment that has kept non-corporate realtors out of the red in recent times. A remarkable fact about the NRI customer base is that even a risk-prone project does not disappoint them. As long as a luxury project is made debt-free, NRIs do not hesitate from paying extra to purchase the same.

Most of these luxury houses have a specific net worth that runs into hundreds of crores because each home comes with a price-tag of Rs 6-8 crore. In spite of the dearth, real estate big shot have done a booming business in Mumbai and Gurgaon.

This shows that in spite of the storms that were thrown its way, real estate industry is capable of sustaining through micro-marketing. The niche of investors may be thin, but it is not absent. According to real estate analytics, a list of real-estate developers have managed to snag end-user consumers enthusiastic about luxury housing projects.

Mumbai saw Lodha Group and Radius Developers making a profitable business. The Lodha Groups have launched about four new luxurious, high-end projects at Walkeshwar, Lower Parel, and are now concentrating on Pune. Radius Developers has two upcoming projects where each luxury home may get them approximately Rs 13 crore.

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Buying property Real Estate Real Estate News

Most preferred Cities for NRI Investment

NRINon-Resident Indian are often in a dilemma when it comes to investing in properties. They have a budget but have little idea about the supply in various cities of India. At times property buyers’ end up buying properties that they were not searching for in the first place. Thus, it is necessary to know the demand-supply graph in the locations of your choice so you can make the right decision.

Mumbai: It is one of the real estate markets where the supply of flats is quite high. The price is on the higher side but the availability of flats is not an issue in this city. Home buyers mostly search for flats followed by houses, plots, villas, and penthouses in Mumbai.
The city has witnessed vertical growth which is the only solution for Mumbai which is not only highly populous but has seen significant demand for residential housing. Here it remains a challenge for experts to increase the supply so high-rise construction is the trend in Mumbai.

Bengaluru: Bengaluru real estate market has witnessed a growth in urban population owing to demand from the IT/ITeS sector. Flats are the most supplied property type in the city. IT professionals mainly prefer apartments in Bengaluru where rates are on the higher side and availability of land remains problematic.

Pune: In this city, under-construction properties witnessed equal preference as ready-to-move-in properties. This means that sales are not focused on only one segment.

Delhi: The demand for the housing sector in Delhi has undergone alterations over the years due to change in the availability of properties. As the property prices are a bit on the higher side, homebuyers prefer flats over independent houses.
For those who cannot afford apartment complexes or independent house can opt to purchase builder floor apartments which are available across the city.

Chennai: Investing in Chennai real estate market is considered a safe investment because of the fact that there is unending demand for homes driven by the notable industrial mix including technology, healthcare, automobile, and manufacturing sectors. Areas in the southern part of the city are touted to be fast growing.

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