NRI buying property in India - A Beginners Guide

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As mentioned in some of our earlier blog posts, NRIs are now turning their long held aspirations of owning real estate in India, into reality by buying property in India. India’s growth story continues to fascinate the world and NRIs are looking to capitalize by buying property in India and it is a no brainer as India has continued to give an average of 20% return on investment per annum even as most of the world economies are in recession.

More importantly NRI buying a property in India has become more prevalent as many avenues are being created as well as schemes being fashioned for NRI/PIO/OCIs to bring in maximum investment from abroad.
Below is a quick overview on developments that have led to an increasing interest and inflow of investments from the NRI community worldwide.

All persons residing outside India holding Indian passports and also people of Indian origin have been granted permission by the Reserve Bank of India (RBI) to invest in both residential and commercial properties in India.

The government including RBI and Foreign Exchange Management Act (FEMA) has liberalized the rules and regulations for the NRI buying property in India. Liberalization along with the added advantage of repatriation of the capital invested and even the rental proceeds under the circumstances prescribed by RBI have also encouraged NRI to buy property in India. Capital gains accruing from any sale of property can be remitted out of India after paying capital gains tax. This has encouraged NRI to buy property in India as it has been a big concern within the NRI community on repatriation of funds abroad.

With most world economies facing a slowdown, NRI buying a property in India has had a return on an average of 20% pa and in some pockets like Gurgaon a return of 50-60%pa. India is a safe destination - a brisk economy and a huge population fuelling it.

To an NRI buying a property in India, a base in the homeland also brings with it a sense of security. The number of NRIs who are investing in property for sentimental reasons and for better investment returns is multiplying.

As opposed to earlier times when an NRI had to struggle with Municipal rules, income tax and wealth tax issues, succession legislations for all religions, the Hindu joint family Act, land ceilings and others, these are times that have NRIs being welcomed with a red carpet. The flexibility in rules has elicited an extraordinary response from the NRI community.

The NRI buying a property in India can now raise financing from financial institutions to purchase a residential apartment / flat. The Housing Development and Finance Corporation (HDFC), ICICI, Axis Bank and other financial institutions in India are facilitating the NRI investment in property speedily and efficiently. The repayment of the home loan can be made through a normal banking channel by way of inward remittance. For those who earn an income in India through rent, dividends, pension, etc the loan can be repaid by way of direct debit into the accounts of Non-Residents External [NRE] or Non-Resident Ordinary [NRO] accounts.

Professionals have been suitably empowered to deal with the matter of remittances. NRIs are free to repatriate in foreign currency their current earnings in India such as rent, dividend, pension, interest and the like based on appropriate certification.

Online NRI banking in India and these accounts for NRIs have made life much easier for transactions involved in NRI investment in India.


What has also made NRIs flock to India has been the initiative by builders and real estate dealers to ensure transparency about the projects on offer and fairness in dealings. NRIs consider their investments to be safe and rewarding when they park their money in real estate India.

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