Guidelines For NRI Real Estate Investment In India


Investing in real estate in India has always been a very lucrative deal for non-resident Indians. But with the Indian government easing the norms, investments from NRIs are set to go up. While it is great to be lured by high returns, it is always best to follow a simple checklist before taking the plunge and investing in real estate in India.
Here are some important points to remember for NRIs looking to invest in India:

Pre-booking checklist:
The Foreign Exchange Management Act (FEMA) says that any Indian citizen residing outside the country can own any property in India apart from agricultural/plantation property or a farm house.

Similarly, The Reserve Bank of India permits all non-residents with Indian passports to make real estate investment in India. There is no limitation on the number of properties (commercial and residential) that they can own.

When it comes to funding, NRIs have the option to self-fund or opt for a home loan.

However, there are some set guidelines by the RBI for taking home loans by NRIs:
1. Banks and financial institutions are permitted to finance 80% of the total price as the rest is the NRIs responsibility.
2. Funds can be remitted to India through banks or through the balance in the NRE, NRO, FCNR accounts.
3. NRIs are also permitted to take loans for home renovations and refurbishments.

In case of an under-construction property, NRIs/PIOs/OCIs have to give a power of attorney to the builders or a trusted alliance. Additionally, NRIs can claim a deduction of Rs.1 Lakh under section 80C on the Income Tax Act, 1961.

There is a basic set of documents an NRI required when looking to invest in property in India. This includes the mandatory passport and pan card. If NRIs hold a passport of another country, they will need a PIO (Person of Indian Origin). The power of attorney, would also be necessary in case they can’t travel to India very often and for the important points of sale, taking possession etc.

Real estate investment is a big step, even for the NRIs. While the government has made the process easier, it is always best to keep in mind the above points before signing on the dotted line.


Please enter your comment!
Please enter your name here