India - The preferred real estate investment destination for NRIs
India remains one of the world’s fastest-growing economies. There’s never been a better time to invest in real estate in India. Let us help you throughout the pre-and-post-purchase process.
Under RBI guidelines, Non-Resident Indians (NRIs) can purchase particular properties, though other forms may require special permissions. Thus every NRI interested in buying property in India must be aware of the provisions related to the purchase or ownership of immovable property in India under the Foreign Exchange Management Act (FEMA). Persons of Indian Origin (PIOs) and NRIs are treated the same while investing in real estate.
The Reserve Bank of India (RBI) has given general permission to NRIs for any residential or commercial property in India. In this regard, they do not need to seek special permission from RBI or send any intimation. NRIs can purchase any number of commercial or residential properties in India. The income tax laws also favor NRIs. In any case, the NRI cannot come to India; they have the authority to give anyone power of attorney who will execute the deal likewise.
However, the RBI does not allow NRIs to purchase agricultural land or plantation property in India. Under existing regulations, NRIs can’t purchase farmhouses in India. To purchase farmhouses, the NRI has to take special permission, which is considered on a case-to-case basis. An NRI can buy property jointly with another NRI. However, if any person is not authorized to invest in Indian property, they cannot become a joint holder irrespective of the contribution towards the purchase.
If a person who owns a property in India becomes an NRI, he can continue holding the property in his name in India. Interestingly, an NRI is allowed to invest in agricultural land, farmhouse, and plantation property if he purchased them before becoming an NRI. He can also let out the property without considering when it was acquired. It is possible to remit the rent received from such properties after appropriate Indian taxes are paid on such rent. NRIs can also gift or sell any immovable property to any person residing in India.
The NRI can even gift or transfer any property to any NRI, provided it’s not a farmhouse, plantation, or agricultural property.