NRI Property Buying Checklist

Feb 13,2020 / By Prahalad Singh / No Comment

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:

Title Deed (in the name of the seller)
Sanctioned Building Plan
Commencement Certificate
Occupancy Certificate
Tax Paid Receipts
Encumbrance Certificate
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:

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.

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.

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.

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:

PAN Card
OCI/PIO Card
Passport
Passport Size Photograph
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:

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.
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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Should I Buy An Under-Construction Flat or Ready-T0-Move-In Bangalore?

Jul 31,2019 / By Prahalad Singh / No Comment

Why one should buy an under-construction flat over ready-to-move-in Bangalore?

Buying property is an important decision for all. It’s an emotional decision which can be taken very cautiously. You are not going to switch your home in the next few years after buying, rather you will not sell it off except you get a better deal or need a bigger home.

The resale housing market, especially the new, ready-to-move-in section, gives home-buyers a chance to avoid the risks of buying under-construction properties that are likely to extreme delays.

Ready-to-move-in properties reduce the chances of getting cheated, apart from offering other benefits.
Ready-To-Move-In flats are more expensive than an under-construction flat in the same locality. You should have a strong financial position for a ready-to-move-in flat, as you would have to pay the full cost of the property before the builder handovers you the keys. Your home loan should be sanctioned, and EMIs on the full loan amount will start instantly. On the other hand, an under-construction flat has an easier payment method, as you would have to make staggered payments spread over the years.

This is, perhaps, the only positive for an under-construction flat, however. “The price gap between RTM and under-construction apartments has narrowed considerably because of the supply overhang

If you are planning to buy a property, you would get lots of options. But there is an advantage in choosing a ready-to-move-in property. Below we are listing a few of its advantages and disadvantages:

Advantages of Ready to Move in Property:

Immediate Authority on Your Flat Purchase: In case of ready-to-move-in property, you can instantly move into your new house. You will immediately get the possession of your home, what you have paid for whereas for an under-construction property you have to wait for 3-5 years for the flat to be delivered.
Low-Risk Involvement: In a ready-to-move-in property there are no risks of delay possession. While in the case of under-construction property, project delays are much more common and there are many cases where a builder has duped buyers. So, you need to be cautious while choosing a builder for an under-construction property.
Instant Relief from Paying Rent: Once you relocate into your new home, you won’t have to pay any rent. All you have to pay is EMI for your home loan. While in an under-construction property, you will have to carry both EMI and Rent for a number of years.
You will get what you will see: An under-construction property is sold on papers. Sometimes, there can be some discrepancies in the final outcome and what you were promised. On the other hand, in the case of ready-to-move-in property, you will first see and inspect the product and then only you will decide to buy it or not.
Immediate Tax Benefits: In a ready-to-move-in property you can challenge tax exemption on your home loan on both principal and interest repayment instantly while tax benefits on home loan for an under-construction property can be claimed only after you get the flat possession.
Only EMI With No Down Payment: The most helpful thing about ready-to-move-in property is that you will have to pay EMIs on the home loan, and would include no other payments. In case of an under-construction property, EMI normally begins after completion of construction work. Despite this, if there is any delay in the construction, then the EMI will start once the home loan gets dispensed.
Check The Infrastructure And Other Facilities: When you are buying a ready-to-move-in property, you can check the infrastructure and other facilities around the flat before buying the property.
No increased cost: This is another advantage of buying a ready-to-move-in property as you are not supposed to pay the increased cost of the property after paying the booking amount. But in the case of under-construction properties, you have to bear the increased cost of the property.
Buy within Your Budget: In a ready-to-move-in property, you can select a property within your budget. If you have a lower budget, you can buy a home that fits into your budget. Whereas, when you buy an under-construction property if the project got delayed for three or more years the builder asked for increasing the cost of construction which you have to bear and it increases your overall budget.
No GST: Taxes play a crucial role in buying a property. Currently, a buyer does not pay any GST while buying a ready-to-move-in property. An under-construction flat, on the other hand, attract 12% GST. So, if you buy an under-construction flat worth Rs 60 lakh, you will have to pay Rs 720,000 as GST.
Rental income: If the flat you’ve bought as an investment and not for personal use or, if you are planning to move in later, you can rent it out and make some rental income. You can use the rental income to pay your EMIs or keep it as a rental income.
Ease of selling: It is difficult to sell an under-construction property, especially if its possession is delayed or it’s involved in litigation. In many cases, developers do not allow the transfer of apartments until the project is complete.

Disadvantages of buying a ready-to-move-in property:

High Property Cost: One of the major drawbacks of buying a ready-to-move-in property is the higher cost as compared to an under-construction property. The cost difference could be anywhere between 20-30%.
Construction Quality: It is very easy for an under-construction property to analyze the work progress and thus being aware of the quality of construction in terms of the material used, the strength of the foundations etc. But you can not conduct any such inspection in a completed flat.
Age of The Property: Buying a ready-to-move-in property might not always ensure you a brand new home like an under-construction property. The flat which you have bought might be up for sale for a long time. Therefore, if it has not been maintained properly, it might look old.
Exclusion from RERA: An old ready-to-move-in flats with Occupancy Certificate as on 1st May’ 2016 have not been included under RERA. Thus, its promoters are not accountable to make its information available on a public platform.
The under-construction projects are no less in terms of quality and cost if you do all your due diligence on the project such as price, location, developer, and other related aspects. The under-construction projects offer a higher return than a ready-to-move-in-property.

Advantages of buying an under-construction property:

Cost-effective: The cost of a property for the buyer is one of the most important things. An under-construction property is likely to cost less than ready-to-move-in properties. Buyer will get many options of under-construction properties. It is also true that possession gets delay but cost worth. With RERA in place, developers must deliver on time and if they don’t they are responsible for compensation to buyers. Post RERA, there is an added advantage of booking a unit in an under-construction for the buyers.
Good Appreciation on Investment: Since you are buying your property at a lower cost, the appreciation is expected to be higher. As the construction work in progress, the cost of your property also increases. For good returns on their investment, one should check the location, upcoming infrastructure and employment hubs situated nearby.
Payment Flexibility: While buying a ready-to-move-in property, a buyer has to pay the entire amount one chance. There are stamp duty, registration charges and other miscellaneous expenses as well. But at the initial stage for an under-construction property, you are paying 10-15% as a booking amount for under-construction properties. You pay EMIs to the bank in case the property is financed or else you pay as per the construction plan.
Discount and offers: It is very difficult to get a discount on a ready-to-move-in property. It is a complete house and you need to pay the cost as per the market and even more depending on the amenities. However, if you are buying in an under-construction project, there are several discounts and freebies offer such as gold coin, modular kitchen, air conditioner, gold coin, free car parking among others. You can also negotiate on the final price.

Disadvantages of buying under-construction property:

Under-construction properties are usually in the under-developed parts of the city and therefore, the capability for price appreciation due to future development is always good. However, this is not true in each and every case. Earlier, buyers have stuck in lots of litigation cases after buying under-construction properties. Before buying an under-construction property, one must have to look at the location and coming plans around that area. Apart from that, in an under-construction project, a buyer also has flexibility in payments, with options like construction-linked plans, subvention schemes, flexible payment plans, etc. Below is the list of disadvantages for an under-construction property:
Delay Possession: This is one of the most common issues related to under-construction projects. In most cases, the project got delayed due to various reasons and in this situation, the buyers face the consequences. Generally, the builders projected a maximum of 3 years timeline to complete the project. But in maximum cases, the project got delayed for more than 3-5 years.
The increase in property costs: This is another common problem faced by the people who book an under-construction property. If the project got delayed for even 2-3 years, the builder asks for the increased cost for the property. It is a kind of burden on you as you were expecting a certain amount to be paid once you got the possession of the property, but because of the delay in the construction, you have to bear the increased cost of the property.
Compromise with quality: When the builder shows you the sample flat, it is usually built with all possible facilities and with the best quality products. With time, you make an expectation of getting the same quality of work done within your home, but when you get the real home you find that it is much different from the promised one as the builders don’t use good material in construction. This type of situation arises very rarely and with unprofessional developers. After the implementation of RERA, a builder cannot change the building approval plan once sanctioned and display the same on their website.
False projection & promises: This is one of the most common and biggest issues with under-construction properties. The builders make numbers of promised to the customers related to infrastructure and amenities within the society, but in most cases, you don’t receive what you have been promised. But after implementation of RERA, the builder has to offer what he has promised during the agreement. A builder cannot change the building approval plan once sanctioned and display the same on their website.

What does CommonFloor data say?

As per CommonFloor research and analysis, we have selected four top real estate destination of India and found that Under-construction property rates are cheaper than ready-to-move-in. Why? Our builder is busy constructing the apartment and the locality around this apartment also develops with time. A few years later your apartment is ready and you take possession of it in a posh locality. Under-construction flats give you bargaining power. You can negotiate with the builder for a cheap flat. Here is the list of top 4 localities and its rate as per BSP:

Locality	City	Avg Sale Price (RTM)	Avg Sale Price (UC)
Sarjapur	Bangalore	4,615	4,494
Whitefield	Bangalore	6,556	6,345
Hi-Tech City	Hyderabad	6,015	5,873
Rajarhat	Kolkata	4,923	4,476
Sector 104	Gurgaon	5,671	4,397

Price analysis between Ready-to-move-in Vs Under-construction:

From the above data, we found that the rate of an under-construction property is much cheaper than a ready-to-move-in property.

While buying a ready-to-move-in property, a buyer has to pay the entire amount one chance. There are stamp duty, registration charges and other miscellaneous expenses as well. But at the initial stage for an under-construction property, you are paying 10-15% as a booking amount for under-construction properties. You pay EMIs to the bank in case the property is financed or else you pay as per the construction plan. There is flexibility in terms of payment and you do not need to arrange a huge amount to buy an under-construction property.

The interest burden on loan:

In an under-construction property, a bank dispenses the loan amount partly to the builder. However, you may be required to pay the EMI on the approved loan amount and not the disbursed loan amount.

EMI for under-construction property permits you to make payments through EMIs, in a partially dispensed loan for an under-construction project. The loan amount is partially dispensed and EMI is fixed as per the approved amount. The period of the loan continues moving up with an extra amount being dispensed. The EMI will continue constantly during the tenure of the loan. Save on interest and secure faster payment of the loan. As your EMI starts instantly after the 1st disbursement, your principal repayment also starts together, by that reducing your interest burden and tenure.

Month	Stage	Amount Disbursed	Pre-EMI
1st Jan	On agreement	Rs 10 L (20%)	Rs 8,750
1st July	On completion of foundation and ground floor	Rs 10 L (20%)	Rs 17,500
1st October	On completion of 1st and 2nd floor	Rs 10 L (20%)	Rs 26250
31st December	On completion of 3rd floor and possession	Rs 10 L (20%)	Rs.39935

As explained above, you would pay (8750 x 6) + (17500 x 3) + (26250 x 3) = Rs 2,36,250 as pre-EMI (interest) towards the dispensed loan amount. Your EMI of Rs 39,935 for the leftover 20 years starts from 01-Feb (i.e., a month after final disbursal).

Here are the tax benefits that you can avail when you take a home loan for an under-construction property:

1) As under-construction properties are relatively cheaper, the capitals required for them would be relatively low. Therefore, the EMI payable on the loan amount would also be lesser.

2) As the EMI on the loan is pretty fair, you can increase your monthly instalments to decrease the loan period. This will encourage you to save more on your total interest payment.

3) The person who is taking the home loan can refuse the deduction of the interest amount paid during the pre-construction phase.

4) One can get tax benefits for the stamp duty and registration fee on the property.

5) The interest amount paid earlier to the year of completion is collected and 1/5th of this amount is released as a deduction each year for 5 years from the year of completion. Simply, the interest paid on the home loan during the pre-construction phase can be taken for deduction in these 5 equal instalments.

Recommendation & Suggestion:

You must buy under-construction flats only from builders who have approved from state RERA with a good reputation and established projects. After the implementation of RERA, a builder is responsible to deliver the project on the mentioned time and if they don’t, they are liable to pay compensation to the buyers.

Since you are buying an under-construction property at a lower rate, the appreciation is expected to be higher. As construction progresses, the price of your property also increases.

If you’re planning for under-construction property, estimate your financial position, documents required to purchase and about the developers. It is essential to know your neighbourhood and the available infrastructure around the area such as nearby markets, common public areas and parks, connectivity issues, among others.

If the developer is appreciated, then banks will definitely request you to get yourself a loan. Buying a home can be a risky business, but buying after a good research and thinking about the long term return will be profitable.

Buying property Real Estate Smart Residential Living

What kind of unique issues you might face while buying a property ?

Jul 12,2018 / By Priyanka / No Comment

There is a pattern that is followed while carrying out property transactions. However, every property is unique in some way. Likewise, every transaction has unique features. This uniqueness of the transaction also gives birth to certain complications sometimes that might temporarily shake your property-buying plans. So, let us discuss what kind of unique issues you might face while buying a property and how you could act consequently to let any difficulties not disrupt your plans that are made up with so much emotional effort and eagerness.

Time is of the essence: Time always plays an important role in property deals. That is why all experts it a good time and due diligence before you finalize a deal. Typically, if a seller is in a great hurry, you might look at it as a red flag. But, there are cases where the conditions do not permit the seller to spend too much time in carrying out the transaction. For instance, If the seller, say, he/she is an NRI, they would justifiably be in a great hurry to finish the task and leave to their present country of residence.

If the urgency shown by the seller is valid and not just an eyewash, and if you do wish to purchase this property, you must be ready with some financial arrangement that would speed up the deal. This is one reason why various buyers get a pre-approved loan. Being in touch with a chartered accountant or a lawyer could also speed up the process in this case.

Money does matter: In a traditional process, the buyer initially pays 10 percent of the property sale as an earnest deposit after which a sale agreement is created. Before the property is registered, the buyer must pay the complete amount. On the other hand, some sellers might ask you to pay a token amount as soon as a verbal agreement is reached.

This amount could be a couple of lakhs or less. It differs from person to person. According to experts, it is a bit risky to pay any amount of money till the sale agreement is created, sometimes you might lose the property if certain personal impulses of the seller are not met.

If such a situation a situation comes that you are at the receiving end, you may consider meeting the sellers demand. Under no circumstances, however, should you pay the money in the case. Do note that the government has banned the use of over Rs 20,000 cash in property transactions. Holding cash of over Rs 2 lakh is also barred.

Also be careful of the fact that quite a lot of big and small expenses would appear out of nowhere while your purchase is in progress. So for this purpose, you need to keep some money with you. In case you are buying a property for Rs 30 lakh, rest assured you would end up spending Rs 35 lakh at least (we are factoring in here only registration changes, stamp duty, loan –processing fee, etc., and not renovations).

This is the sort of calculation involved in the process, make your purchase plans according to your savings.

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Commonfloor hosts an online home festival

Mar 26,2018 / By Priyanka / No Comment

Are you still thinking to buy your dream home but do not know where to starts from or you just want to skip the lengthy process of house hunting. Good News for all the prospective home buyers!! As Commonfloor brings you virtual shopping festival which is happening till 6th April.

Top builders such as Brigade Group, Purvankara, G-CORP, CASAGRAND, Sobha, L&T Realty, CYBERCITY, PHOENIX to name a few are showcasing their properties as part of this festival. More than 50 projects across cities like Bengaluru, Mumbai, NCR, Pune, Hyderabad, and Chennai are available virtually.

Virtual 3D experience will help you browse through the virtual expo. You can visit these virtual stalls, browse through projects brochures and chat to the builder regarding the projects at the same time

COHF partnered with HDFC for home loans to help the potential buyer to complete the whole buying process in the same place.

To transform online shoppers into buyers, COHF is offering gold coins for first 15 home buyers, also builders are throwing offers like flat Rs.200 per square foot discounts, no pre-EMI till possession and free modular kitchen upon booking.

So what you are waiting for? Your dream home in just one click away.

For more details visit www.cohf.in and let your family and friends know about it too!

Buying property Real Estate Smart Residential Living

Vajram Tiara: Life isn’t meant to be lived in a cubicle

Jan 23,2018 / By Priyanka / No Comment

Vajram Tiara is one of a kind residential habitat/enclave offering luxurious apartments to the discerning customer, at the best price possible among projects in the vicinity.

The project offers 237 spacious 3, 3.5 and 4 BHK condominiums in the contemporary architectural style with 75% open space. It marries tranquility, luxury, and style, making it uniquely aesthetic to behold.

Spread across 4.5 acres with G+14 floors, this project is a suitable project for both young families as well as the elderly. IT professionals can look to it for its proximity to IT and commerce hubs like Embassy Manyata Tech Park, Yeshwantpur and Whitefield and the international airport is just 30 mins drive away.

Adding to its credentials, booking a home at Vajram Tiara will introduce you to a whole new world with exciting amenities such as:

CLUBHOUSE

Banquet Hall

Squash Court and Badminton Court

Half Olympic size Swimming Pool with deck

Cafe area with Pantry

3000 sft Indoor Gymnasium and Aerobics

Open air Barbecue

Library with attached terrace

Indoor games room

Business Centre

LEISURE & LIFESTYLE

Old folks Area

Aromatic garden Enquire Now

Butterfly Garden

Water feature

Spa

AV room

Acupressure Walkway

Outdoor Gym

Cards area

SPORTS & HEALTH

Jogging Track and Skating Arena

Half Basketball court

Lawn Tennis and Badminton court

Beach VolleyBall

Cricket practice Net

Meditation / Yoga Garden

Table Tennis

Cascade Wall

KIDS & SECURITY

Children’s Play area

Creche

Shaded Hobby Area

Study Room

Wifi Connectivity

CCTV Coverage

Video Intercom Facility

Fibre Connectivity

The project also boasts amenities for senior citizens like old folks area, aromatic garden, butterfly garden, acupressure walkway and many more. Vajram Tiara is a RERA approved project with RERA No – PR/KN/170729/000144 and will be handed over by early next year.

A member of the IGBC, Vajram Group’s design philosophy, and specifications are as prescribed by the IGBC and they are a big proponent of Green Building standards. The company aims to come up with integrated residential living spaces, adhering to human values and setting a benchmark for quality, design, and comfort. Vajram Group promises only the best for its clients with zero deviation policy.

Mr. Pavan Vajram, is the Chairman and CEO of Vajram Group and holds an MBA degree in International Business. He has a good track record in building and managing potential organizations in technology and real estate sectors. Prior to heading the Vajram Group, Mr. Pavan co-founded and managed several technology companies with a global footprint.

So this New Year, let Vajram Tiara promise to give you an impressive foundation to your identity of a lifestyle of affluence and perfection.

With zero percent interest and No EMI Till Possession, Vajram Tiara promises you the most lucrative rates among comparable projects in Yelahanka, so go ahead and book your dream home now!

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