Are you an NRI buying property in India? Find Useful tips on property investments in India in this article.
As an NRI, you may be living abroad but may plan to return to India in your golden years. To this end, you may decide to buy a property in India. The good news is that you can buy residential and commercial properties in India and also qualify for home loans. This article explains all about NRI property investments, including how NRIs can buy property in India.
As mentioned earlier, you can buy a property in India by taking out a home loan from an Indian bank. The bank sanctions the loan in Indian currency, and you must repay it in INR as well. The lender credits the loan amount directly into the account of the seller or property developer and not into your bank account. You can easily repay the loan EMIs through either an NRO or an NRE account or even through FNCR deposits.
The Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2018 allow Non-Resident Indians (NRIs) to invest in Indian real estate. Buying property in India as an NRI is permitted for both residential and commercial purposes, with certain restrictions:
NRIs can purchase apartments, flats, and houses for personal use or rental income. There is no limit on the number of residential properties an NRI can own.
NRIs can invest in offices, shops, or commercial complexes for business or leasing purposes.
Non-Resident Indians (NRIs) are not permitted to purchase the following types of property in India:
When NRIs are buying property in India, the purchase must be funded through:
Proceeds from the sale of property can be repatriated abroad, following RBI guidelines:
NRIs must comply with RBI regulations and tax provisions under the Income Tax Act when buying property in India as an NRI.
Investing in Indian real estate provides several advantages for NRIs, making it a preferred choice for long-term wealth management:
Real estate in India has historically demonstrated long-term capital appreciation, offering the potential for significant wealth growth. For those buying property in India as an NRI, this can serve as a reliable avenue for capital investment.
NRIs can earn a consistent income stream by leasing residential or commercial properties, enhancing their overall financial portfolio.
Acquiring property in India enables NRIs to diversify their investment portfolio beyond financial instruments, thereby mitigating risk and enhancing returns.
Ownership of property in India facilitates a continued personal and familial connection to the country, providing accommodation during visits and strengthening long-term familial bonds.
In accordance with RBI guidelines, NRIs may repatriate the proceeds from the sale of property, up to USD 1 million per financial year, ensuring the efficient movement of funds internationally.
NRIs are eligible for home loans from Indian banks, often at competitive interest rates, which can assist in financing property acquisitions. This makes it easier for those considering can NRI buy property in India to proceed with confidence.
When buying property in India as an NRI, it is essential to meet certain regulatory, financial, and documentation requirements. Understanding these key requirements ensures a smooth and compliant property acquisition process.
When buying property in India as an NRI, you are required to submit several mandatory documents, which typically include:
In addition, property-specific documents must also be provided, such as:
These documents ensure compliance with RBI regulations and facilitate a smooth property transaction for NRIs.
To give someone Power of Attorney means to provide them with authority on your behalf to carry out the property deal in India while you are based abroad. You must ensure you get the Power of Authority (PoA) document notarised so that there are no hassles in the property purchasing process. PoA is especially necessary if you are funding your property purchase through a Home Loan since most lenders insist on it. You must assign the PoA a Resident Indian citizen.
If you are an NRI, you will ideally need to maintain NRE and NRO accounts in India(2). The NRE account (Non-Resident External) enables you to transfer foreign income in India. The interest income you earn on it is tax-free. The NRO Account (Non-Resident Ordinary) is one through which you can manage your Indian income sources. You may transfer foreign currencies in this account too to finance your property purchase plans in India.
Purchasing property in India as an NRI requires careful planning and proper documentation. An NRI savings account is essential for funding and smooth transactions.
When NRI buying property in India, you must pay applicable property taxes, along with stamp duty and registration fees. An NRI savings account can simplify payments and manage financial transactions efficiently.
Loan Component |
Maximum Deduction per Year |
Principal Repayment |
INR 150,000 |
Interest Payment |
INR 200,000 |
Interest Payment |
INR 200,000 |
Investing in property in India can be a strong long-term strategy. It provides not only a place to live but also a valuable asset for securing your financial future. If purchasing through a loan, ensure that you meet your lender’s eligibility criteria and follow the prescribed process carefully.
For those considering can NRI buy property in India, investing in real estate offers an opportunity to grow long-term wealth, earn rental income, and maintain a connection to the country. An NRI savings account with DBS Treasures supports seamless transactions and ensures compliance with regulations.
By following proper documentation and taxation guidelines and utilising available tax benefits, property buyers can make informed and secure investments that protect their financial future.