1. Can a non-resident Indian invest in the Indian property market?
Yes. Any foreign national of Indian origin who is either a resident in India or abroad has the general permission to invest in the Indian property market and buy an immovable property in India. The Foreign Direct Investment (FDI) participation in Indian real estate sector was initiated in 2005-06.
2. What mode of payment is allowed for a non-resident Indian to purchase a residential property in India as per the general permission?
A non-resident Indian can pay for a residential property purchase through two different methods:
- They can use the normal banking channels to bring foreign exchange inside the country to make the purchase.
- They can make use of the funds from the FCNR/NRE Accounts that they have with any domestic bank.
3. How can a non-resident Indian finance a flat in India?
Any non-resident who is planning to finance a flat can do so through his non-resident account. In addition, he can also arrange for the funds by arranging fresh remittances through the normal banking channels. If the flat he is planning to buy is under construction, then he has the option of arranging for easy installments from the builder.
Plus, a non-resident is also eligible for home loans to purchase a flat in India. Several financial Institutions provide loan facilities to a Non-Resident Indian to purchase homes in India. Some of the institutions are Housing Development Finance Corporation, Citi Bank, and ANZ Grindlays Bank. If you are a non-resident Indian citizen with an Indian passport in your name, then you have the right to
get finance for a flat which you want to purchase for your own occupation or to house your family. If you are settled abroad and wish to finance a property through loans, then Indian banks can provide it, subject to the condition you make one of your family member who is residing in India a co-borrower and provide him with power of attorney.
4. What is the option for a non-resident Indian settled abroad to buy a property in India?
A non-resident settled abroad can purchase a property in India either through his relatives who is acting as his agent to make a purchase on his behalf or providing them with the power of Attorney to make the purchase on his behalf. Care should be taken to give the power of attorney drafted on a stamp paper and signed by the competent authority of the country where he is residing. Drafting a Power of Attorney on an Indian stamp paper is not legal for a non-resident who is staying abroad.
5. Does a non-resident have to fulfil some legal formalities in order to become eligible to buy a property in India?
Yes. A non-resident has to submit an IPI 7 form at the central office of RBI in Mumbai within 90 days from the signing of the purchase contract.
6. If you are not using the residential property in India for your personal use, can you let it out for rent?
Yes. It is perfectly legal for a non-resident to let out his property for rent.
7. Does a non-resident Indian require any special permission to buy a residential property in India from the RBI?
No such prior permission is required for a non-resident Indian to by a residential building or a flat. However, purchase of agricultural land, plantation or a farmhouse fall under a different law and requires permission from different authorities (both the state government as well as RBI).
8. Can a non-resident transfer any immovable property to any resident Indian?
Yes. He can normally transfer the ownership of the property to a resident Indian. He does not have to take any special permission in this case.
9. Can a Non-resident transfer his property in India to another non-resident settled outside the country?
Yes, he can as any normal business transaction except for the agricultural land, plantation or a farmhouse, for which he needs special permission.
10. Can a PIO (person of India origin) buy or transfer an immovable property in India?
A PIO does not need any special permission to acquire any commercial or residential property in India except for any agricultural land, plantation or farmhouse. The following property transactions do not require any special permissions:
a) A PIO does not need any permission to buy or sell any immovable property in India provided that it is not an agricultural land, plantation or a farmhouse. He can make the purchase by the inward remittances through the normal banking channels or funds from any non-resident account that fulfills the FEMA regulations.
b) A PIO can accept as a gift any immovable property in India excluding agricultural land, farm house or plantation property from an Indian resident, a non-resident or a PIO residing outside India.
c) A PIO can get ownership of any immovable property in India through his inheritance rights from a non-resident who has acquired such property by following all the legal provisions of the foreign exchange law in force at the time of purchase by him or through the provisions of the Regulations of FEMA or from a Resident in India.
d) A PIO who is resident outside India can transfer any immovable property in India to a resident in India except any agricultural land, farmhouse, or plantation property.
e) A PIO can transfer agricultural land, farm house or plantation property in India, by way of gift or sale to a resident citizen of India without any special permission.
f) A PIO can by way of gift transfer residential or commercial property in India to a resident in India or to a person resident outside India who is a citizen of India or to a PIO. He does not require any special permission for such a transfer.
11. What are the processes through which the purchase considerations for acquiring an immovable property is met in India by an NRI or PIO?
The purchase consideration of an immovable property in India can be met through the following
- Inward remittances in foreign exchange through normal banking channels
- Out of funds from non-resident accounts maintained with banks in India.
12. Is it legal for a non-resident to buy a property in India through an agent or through the Power of Attorney?
Yes. An NRI can purchase an immobile property in India through his agent or through the Power of Attorney excluding the agricultural lands, plantations, or farmhouses. He can purchase a property in India either through his relatives who is acting as his agent to make a purchase on his behalf or providing them with the power of Attorney to make the purchase on his behalf. Care should be taken to give the power of attorney that is drafted on a stamp paper and signed by the competent authority of the country where he is residing. Drafting a Power of Attorney on an Indian stamp paper is not legal for a non-resident who is staying abroad.
13. What are the rules regarding the remittance of any sale proceeds of an immovable property by an NRI, PIO or resident outside India to an offshore account?
Any remittances outside India from the sale proceeds of any immovable property other than agricultural and farm house or plantation in India, including credit to RFC, NRE or FCNR account, requires prior permission of the Reserve Bank. However, the prior permission is not required provided the following conditions are met:
a) The immovable property purchased by the seller following all the provisions of the foreign exchange law in force at the time of purchase or the provisions of regulations under FEMA
b) The amount to be remitted does not exceed —
i. The amount paid to acquire the immovable property by the non-resident in foreign exchange or
ii. The foreign currency equivalent, as on the date of payment, of the amount paid where such payment was made from the funds held in Non-Resident External account for the acquisition of the property.
iii. In the case of residential property sale, the remittance of sale proceeds is limited to two such properties.
The Reserve Bank has withdrawn the earlier order of lock-in- period for remittance of the sale proceeds of immovable property purchased in India by NRIs/ PIOs. Now an NRI/PIO can remit the sale proceed of any immovable property in India without any conditionality attached to the period for which the property was held. However, the sale proceeds to be remitted should not exceed the foreign exchange brought in to acquire the property.
14. What are the rules regarding refund of purchase considerations of any immovable property on account of non-allotment of the flat or plot or cancellation of the contract by an NRI or PIO?
For the refund of purchase considerations of any immovable property on account of non-allotment of the flat or plot or cancellation of the contract by an NRI or PIO, RBI has some clear guidelines. Any authorised dealer can allow an NRI or PIO to credit refund of application and earnest money or purchase consideration in case of non-allotment of flats and plot or cancellation of bookings or/
deals for purchase of Residential commercial property, together with interest to NRE/ FCNR account. However, it is essential that for the refund the original payment should have been paid through the inward remittances of the regular banking channels or funds from any non-resident account that fulfills the FEMA regulations.
15. Can an NRI or PIO lease out their immovable property in India?
Yes. He can without seeking any prior permission. And as the rental income is a current account transaction he can easily remit it abroad.
16. Why should you choose SVH?
A well-respected name in the real estate sector, SVH has a rich experience in constructing expertly designed buildings for top residential projects and several MNCs in the Delhi and NCR. Our strong presence in the realty business spanning three decades combined with our cutting-edge approach in using smart technologies and latest construction methods have made us one of the leading and most trusted brands in the real estate sector.
Our company is known for building properties with superior design aesthetics and top-grade materials, while we hold a special reputation for our commitment to timely deliveries. All our transactions are totally transparent and above board. It is our endeavor to provide high-quality real estate products that fulfill the desires and expectations of our clients.
SVH’s acclaimed portfolio of more than 40 illustrious projects covering nearly 8 million sq. ft. bears testimony to our excellence. These include Max Hospital, Noida, Delhi’s Safdarjung Hospital, Office building for the Property Tax Department, several large commercial and housing projects across
Delhi and NCR.