It is 2018, the start of a new year, and investing in Indian real estate for Non-Resident Indians (NRIs) is poised for accelerated growth. Over the past few decades, the NRI population has been growing rapidly, and is now estimated to have crossed 12 million people. More and more NRIs are getting drawn towards investing in Indian real estate because of a variety of factors. Higher currency valuations, improved standard of living, better social infrastructure are only some of the reasons. NRIs, once they have achieved significant savings, wish to invest back in India.
They find India’s real estate landscape to be safest and highly profitable due to a variety of reasons. Indians who are living abroad, such as NRIs, Persons of Indian Origin (PIOs), and Overseas Citizens of India (OCIs) love to own one or more real estate properties back home. This is a healthy trend that seems to be gaining momentum, and set to reach newer heights in 2018. We believe that this is the right time to invest in the market as prices have bottomed out.
You may gain substantially from property price appreciation. Some of the other factors that may also influence your purchase decision include wide range of options, pro-NRI taxes and regulations, reviving market, low property prices, and a weakening rupee. If you too are an NRI, and looking to invest in Indian real estate, there are certain legal factors that you must keep in mind before investing. You may be aware that Foreign Exchange Management Act (FEMA), 1999, states that a Non-Resident Indian (NRI) is any person residing outside India but is either a Person of Indian Origin (PIO) or a citizen of India.
There are certain documents that all NRIs must have ready before investing in real estate in India. As per KYC norms, an NRI should submit a copy of his passport along with all relevant pages showing his name, address, date of birth and photo. A copy of his PAN card should also be submitted. Moreover, he should also mention his overseas address, which can either be a permanent or a correspondence address. An NRI need not take permission from the Reserve Bank of India to open, hold and maintain various kinds of accounts with an Authorised Dealer. Authorised Dealers have the permission to deal in foreign exchange.
You also do not need approval from the RBI to maintain an NRO account for transacting in Indian Rupee. All real estate investments must be carried out using either an NRO or NRE account. Foreign currency notes and travellers’ cheques are not approved. You can acquire any immoveable property in India by way of purchase and/or gift from an Indian resident or from a person residing outside India but is either a PIO or an India citizen residing outside India. However, farmhouse plantation properties and agricultural land are out of reach of NRIs.
It is good practice if an NRI books the services of a Chartered Accountant and also a lawyer to stay away from any legal glitches. The title documents include the title certificate and no dues certificate from a lawyer, land and revenue records, and earlier title deeds. NRIs can also opt for home loans from an Authorised Dealer.