Are you an NRI or PIO considering property investment in India?
Now may be the ideal time to enter the market, or to add to your current portfolio of property investments in India. Between the many new developments offering attractive returns, the depreciation of the rupee and the relative ease of purchasing property from abroad, NRI investment in real estate can see overseas buyers fetch more for their money in native India.
There are a number of things to consider when it comes to selecting what to buy and where to buy, but firstly, it’s important to know what you can and cannot do as an NRI investor…
What NRI investors CAN do
- Investors are eligible to hold an unlimited number of both commercial or residential property investments in India.
- NRIs can borrow money from Indian institutions to fund the property investments. Certain factors such as education will play an important role in deciding your loan eligibility, and it’s important to remember that a maximum of 80% can be financed, with the 20% remaining being funded by the investor.
- Investors can open an NRI-specific bank account to handle property-related monetary transactions in India (including joint accounts held with resident Indians).
- An NRI is liable to receive the same tax benefits associated with investment in property as all resident Indians.
- When it comes to the documentation involved with NRI investment in real estate, NRIs can hand over Power of Attorney to execute contracts for purchase, sale or lease.
What NRI investors CANNOT do
- NRI investors cannot purchase agricultural land, including farmhouses. This property can only be owned by an NRI in the event that it is inherited.
- An NRI cannot send home the earnings on more than two income properties.
- Although property can be purchased from overseas, all transactions must take place in rupees, and loan repayments cannot be made in foreign currencies.
- Investors cannot make property investments on new builds without a clear land title, and proof that the development holds all necessary permits and meets all necessary criteria for construction.
While there are some factors to take into consideration, it is relatively easy to find and purchase residential real estate in India as a foreign national.
Are you considering a foray into the property market as an NRI? Follow the Unesta team @UnestaRealty to keep up to date with all the latest Indian property developments, market news and opinion.