Real Estate Investment Tips in India for NRIs
While investing in property in India might seem daunting at first for NRIs, with a little research you will find that the laws and regulations in India are quite lenient and NRIs can invest in property in India easily and without restriction. The following are some real estate investment tips for NRIs:
- They can come to India and buy property directly or can give the power of attorney to someone to do the transactions in their absence.
- NRIs cannot invest in more than two properties in the country.
- They cannot buy agricultural land, farmhouses, or plantations. The only way they can own these properties is if they are inherited or gifted.
- NRIs are eligible for home loans with the rules applicable similar to those for resident Indians, the only exception being that the home loan amount is based on the income and educational qualifications of the applicant.
- No tax is applied on properties in India, but if the property is being rented out, then the rent income will be taxed.
- If an NRI sells a property, capital gains tax will be imposed. In order to avoid paying short-term capital gains tax, the property should be held for at least three years.
- Required documents include passport copies, valid visa, PAN card, etc. NRIs need to provide a power of attorney and a local contact address.
- NRIs can avail of the same interest rates on loans as resident Indians; however, banks do allow shorter payback period as compared to that for resident Indians and do allow 80-85% of the loan amount against the property value.
- It is advisable for NRIs to have a reliable person in the country to ensure that the property is not encroached upon by unscrupulous builders or other individuals.