Complete Guide NRI Buying Property in India

Investing in the real estate sector has always been beneficial for the NRI population. With the growing economy of India and price correction in the real estate sector, it has been a great opportunity for prospective buyers. According to the RB guidelines, if you are an NRI or have an OCI card, then you are eligible to buy residential or commercial properties in India. The NRIs purchase the properties for investment purposes and to settle back here after their retirement. You can also open NRI accounts in India to maintain the finances or the income generated from these investments, such as rental yield.

If you are an NRI and looking for options to invest in India, real estate is the best investment destination for you. In this guide, we have discussed all the important things that you should consider before buying a property in India. There are many things that you should keep in mind so that there will be no conflicts in the future regarding the property.

Factors That Facilitate NRI Investments in India

There are six factors that facilitate investment opportunities for NRIs in Indian real estate. They are evaluated here in this section below:

RERA

The full form of RERA is the Real Estate Regulation and Development Act. This act was introduced in 2016, and it has been encouraging NRIs to invest more and more in India since then. RERA has offered clarity in rules and regulations, as well as providing a stable pricing environment.

• Timely Completion: RERA makes sure that the developers complete their projects on time. The developers need to update the authorities about the project in a timely and, which helps in reducing the stress levels for the NRIs.
• Transparency: Developers have to tell each and every detail about the project to the buyers to maintain transparency among them.
• Mismanagement of funds has been eliminated: To avoid the mismanagement of the money, RERA has introduced that the funds from the buyers have to be deposited in an escrow account.
• Clarity in the carpet area: The dealers used to show the super built-up area in their pitches to the buyers, which used to create confusion because the buyers used to get a smaller property than they were told about. So, RERA introduced that every dealer has to mention the carpet area to give clarity about the size of the property.
• Presence of a robust regulator: If the NRIs have to complain about any fraud or delay by the developers, they can do so to the present regulator.
• Repercussions for delays: If there are any delays faced by the NRIs, then the builders will be responsible for paying the Interest until the delivery of the project.

Favourable Currency Exchange Rate

There are noticeable currency exchange rates in rupees and other currencies. The rupee depreciated by 14% in 2018 and became Rs 74 against a dollar. Not only the dollar, but it has also depreciated against the dirham and pound. This enables the NRIs to spend more and buy any property in India because it is cheaper for them. The leading property analysts have said that there is an increase of 15% in the inquiries about the real estate market.

Emotional Connection to Hometowns

NRIs have a special connection with their hometowns, and they are looking for opportunities to invest there. They are not only limited to the metro cities, but they are also moving forward to many towns and villages. Some of the famous places for investments are Kochi, Ahmedabad, Coimbatore, Trivandrum, Chandigarh, and Pune. NRIs are also investing in small cities like Nashik, Vadodara, Noida, Ghaziabad, etc.

Another reason for the investment is that they expect a good amount of rental yield from the property. The rental yield in non-metros is comparatively higher than in metros. NRIs also think of setting back to India, in their homes, so that while growing up their children can learn the indian culture and traditions., Some of them miss their family and friends, so they return to their hometown after a certain amount of time abroad.

Retirement Plans

There was a survey done, and nearly 70% of the people who participated said that they would want to settle in India after retirement. Senior living is a manifested factor by the developers to cater to this audience. The same survey says that 90% of the NRIs are interested in investing in the senior housing sector.

Uncertainty in Residency Regulations

The rules and regulations for the visa have become very strict in countries like the UK, the US, and Australia. It has become very hard for skilled workers and tech geeks to settle in foreign countries. So, they keep having a backup plan to settle back in India in case the visa regulations keep being stringent in foreign countries.

Courting NRIs

Many builders are constructing projects mostly for the NRIs. The material used is of very high quality. The fixtures and tiles are also of top-notch quality, and they are made with all the modern amenities and features, such as large swimming pools, elevators, clubhouses, etc. The builders also provide the 3-D views of their projects to the NRIs to give them a correct idea of the property.

NRI Guide to Buy Property in India

If you are an NRI or an OCI Card holder, then here are some of the guidelines that you should keep in mind before buying any property in India:

• As an NRI, you cannot purchase any plantation, farmhouses, or agricultural land in India.
• They can buy commercial and residential property in India. The NRIs and OCI do not have to submit any communication letter to the central bank about the purchase of the property.
• For both NRI and OCI, they can purchase a property in India independently or jointly. In buying the property jointly, they can purchase it with a resident Indian or with another NRI/OCI.
• If you already have a property in India and then you become an NRI after that, then you can continue to be the owner of that property.
• You do not require any special type of permission to buy a property in India. You are eligible to sell or gift it to any of the Indian residents.
• If you are buying a property in INR, then it is acceptable, but the funds should be maintained in an NRE savings account under the Foreign Exchange Management Act (FEMA) and the RBI's guidelines.
• If you have some income through the immovable property, then you can repatriate the funds after deducting Tax Deducted at Source (TDS), depending on the capital gain (short or long term).
• If you are not able to carry out the transactions on your own, then you can appoint a Indian Power of Attorney (PoA). The PoA will sign the property-related transactions on behalf of the NRI.
• The NRI/OCI can rent out their purchased property in India. They can repatriate the funds received as the rent on the properties, after paying the applicable taxes in India.
• You should do a compulsory background check before buying any type of property in India. You can ask the questions to teh existing customers and get all the property details on your own.

How Visament Helps in Managing Finances

If you are also planning to buy a property in India, then you will need to open an NRI account if you don't already have one for managing your finances. Visit Visament for the best banking solutions. We have the expertise in providing the best services related to bank accounts, visas, passports, and much more. The entire process is hassle-free, and you can view the update on our website. Whether to open an NRE account or to open an NRO account, we cater to all directions and provide a tailored solution designed for you. You can also get online assistance from our website, which is available 24/7.