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A Guide On NRI Property Investment In India

 As an NRI, do you wish to buy real estate in India? If “Yes”, listed below are a few rules and regulations that you need to adhere to…

 Samir Takhlani (name changed) is an NRI. Settled in New Jersey, he has come across several news articles which have captured the rising real estate prices in India. Having surplus funds, he is considering a real estate investment in India, by purchasing a residential property in his hometown in India. Since he does not have much knowledge on this subject, he decides to take help from the World Wide Web, to know the basics – who can buy, how to pay for the property and whether he can borrow from a bank in India. Indicated below is the information that he was able to gather:

 

Eligibility

If you are a person residing outside India but hold an Indian passport or are a Person of Indian Origin (PIO), then you are permitted by the RBI to buy real estate in India. The permission is applicable only for residential and commercial properties and excludes agricultural land/plantation property/farm house. Also, you can own any number of properties in the country.

Financing the purchase

The funding of the purchase of the particular land is governed by provisions of FEMA and guidelines identified by RBI. The financing can only happen through inward remittances received from overseas via a normal banking channel or through funds maintained in a non-resident account (NRE/FCNR/NRO). No consideration is allowed to be paid outside India.

Availing home loans in India

Planning to invest in real estate? You can avail of home loans in India, subject to the terms and conditions laid down in the Foreign Exchange Management (Deposit) Regulations, 2000, as amended from time to time. However, banks cannot grant you new loans or renew existing loans in excess of INR 1 crore against NRE and FCNR deposits, either to the depositors or to third parties.

Servicing the loan

You can service and repay the loan through inward remittances through normal banking channel or through direct debit from your NRE / FCNR / NRO account or out of rental income received from such property. It can also be paid by your close relatives (as defined by the law) through their accounts in India.

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