Buying Property in India – Despite the COVID-19 time, India’s real estate sector is witnessing healthy growth, and it is expected that this momentum will continue in the upcoming years too. In 2022, the residential segment of India’s real estate sector is set to achieve around 5% capital growth. According to NITI Aayog, the Indian real estate sector might reach around $1 trillion by 2030.
If you are an NRI (Non-Resident Indian) and planning to buy a property in India, you should move ahead. This time is excellent for investing in India’s real estate sector. In the first half of 2021, the country registered $2.4 billion of investment, massive growth of 52% year over year. As an NRI, before investing in India, you should keep some things in mind because of some rules and regulations that might be complex.
Crucial Considerations When Buying Property in India
NRI can buy a property in India, and it doesn’t require any special permission to invest in an immovable property. They can purchase many immovable properties, and there is no restriction on them. But yes, properties can’t be purchased through foreign exchange.
There is a restriction on NRIs on buying certain types of properties. They are not eligible to buy agricultural land, farmhouses, and plantation property. You can hold these types of properties only in the case of heritage. Even then, if you want to purchase an agricultural, farmhouse, or plantation property as an NRI, you need to get special permission from the Reserve Bank of India and the Indian Government.
In the process of buying a property in India, the NRIs are required to obtain and submit many documents. Below we have mentioned the list of essential documents that you need for registration.
1. Passport or OCI card
2. PAN Card (Permanent Account Number
3. Current Address Proof
4. Power of attorney
Some of the Indian states ask for specific documents. It would be good to get in touch with a legal property advisor.
Power of Attorney
In case you are not available in India to execute the property transaction, you need to give power of attorney to someone who completes the transaction process on your behalf. But here, a general power of attorney is not enough. NRI must have a registered and notarized power of attorney.
The NRI can buy a property in India through inward remittances and funds in a non-resident account. The transaction must be through banking channels that use Indian currency. One of the advantages NRIs have, if they need a home loan, they can get it from an Indian bank.
The NRIs must have to pay the required taxes like other citizens of India. It includes stamp duty, registration charge, post-purchase annual property tax, and GST (for an under-construction property). They have to pay taxes for the rental income too. If the NRI sells a property, they have to pay the capital gain tax, depending on the period of holding the property.
Buy Property Under Parent’s Name
Many NRIs purchase the property in their parents’ name to get rid of the travel expenses and legal costs. As an NRI, if you are planning to do this, it’s important to keep in mind that you will not have any right to the property after buying. If your parents have another heir, the property might lead to disputes. Your parents will have to pay the tax if any income comes from the property. If you want to invest in real estate in Gurugram, Property Epicenter can help you find the best commercial and residential properties