We at Bharathomes have a dedicated team for Non Resident Indian (NRI ) Customers . Investment in Real estate is governed by specific Laws .
FAQ on NRI Investment in Real Estate in India:
Can NRIs obtain loans for buying a house/flat for residential purpose from financial institutions providing housing finance?
Reserve Bank has granted general permission to certain financial institutions providing housing finance to grant housing loans to non-resident Indians for acquisition of houses/flats for self-occupation subject to certain conditions.
Can authorized dealer grant loans to NRIs for acquisition of a flat/house for residential purposes?
Authorized dealers have been granted permission to grant loans to on-resident Indian nationals for acquisition of house/flat for self-occupation on their return to India subject to certain conditions. However, repayment of the loan should be made within a period not exceeding 15 years out of inward remittance.
What are the schemes available to NRIs for direct investments in India with repatriation benefits?
In the new issues of shares/convertible debentures of Indian companies, there are direct investment schemes such as 24% scheme/40% scheme/100% scheme. Domestic Mutual Funds floated by public/private sector institutions/companies and bonds issued by public sector undertakings is also a good option.
Do NRI's require permission of Reserve Bank to acquire immovable property in India?
No. NRI's do not require any permission to acquire any immovable property in India other than agricultural / plantation property or a farm house. Following is a comprehensive list of the type of transactions possible.
|Buy Property From||Yes||Yes||Yes||NRI|
|Sell Property To||Yes||Yes||Yes||NRI|
|Receive Gift From||Yes||Yes||Yes||NRI|
|Give Gift To||Yes||Yes||Yes||NRI|
|Purchase Property From||No||No||No||PIO|
|Sell Property To||No||No||Yes||PIO|
|Receive Gift From||No||No||No||PIO|
|Give Gift To||No||No||Yes||PIO|
|Buy Property From||Yes||Yes||Yes||PIO|
|Sell Property To||No||No||No||PIO|
|Receive Gift From||Yes||Yes||Yes||PIO|
|Give Gift To||Yes||Yes||Yes||PIO|
|Purchase Property From||No||No||No|
|Sell Property To||No||No||Yes|
|Receive Gift From||No||No||No|
|Give Gift To||No||No||Yes|
Can NRI's/PIO's rent out the properties (residential/commercial) if not required for immediate use? Yes. NRI/PIOs can freely rent out their immovable property, whether purchase through application of forex or otherwise, without seeking any permission from the RBI. The rental income being a current account transaction is repatriable outside India, only if proper tax is paid or provided for. Does RBI have any guidelines for loans to NRI's/PIO's? Yes. There are guidelines issued by the by the Reserve Bank of India for grant of Housing Loans to NRIs. The guidelines are:
The loan amount shall not exceed 85% of the cost of the dwelling unit.
Own contribution, which is the cost of dwelling unit financed less the loan amount, can be met from direct remittances from abroad only through normal banking channels, your Non-Resident (External) [NR (E)] Account and /or Non-Resident (Ordinary) [NR (O)] account and /or Non-Resident Special Rupee account [NRSR] in India.
Repayment of the loan, comprising of the principal and interest including all the charges are to be remitted from abroad only through normal banking channels, your Non-Resident (External) [NR (E)] Account and /or Non-Resident (Ordinary) [NR (O)] account and /or Non-Resident Special Rupee account [NRSR] in India.
Can authorised dealer grant loans to NRIs for acquisition of a flat/house for residential purposes? Authorised dealers have been granted permission to grant loans to NRI's for acquisition of house/flat for self-occupation on their return to India subject to certain conditions Repayment of the loan should be made within a period not exceeding 15 years out of inward remittance through banking channels or out of funds held in the investors' NRE/FCNR/NRO accounts. Can authorized dealer grant housing loan to NRI's where he is a principal borrower with his resident close relative as a co-applicant / guarantor or where the land is owned jointly by such NRI borrower with his resident close relative? Yes. Such housing loans availed in rupees can also be repaid by the close relatives in India of the borrower. What are the documents I have to submit along with the application? The following documents are normally to be submitted along with the application:
Photocopy of the labour contract and English translation duly countersigned by your employer
Latest salary certificate (in English) specifying the following
Name (as it appears in the passport)
Date of joining
Perquisites and salary
Photocopy of labour card/identity card
Photocopy of valid resident visa stamped on the passport
Photocopy of monthly statement of local bank account for the last 4 months
Property related documents
Can an NRI take loan against the security of immovable property in India? Are there any restrictions on the use of loan amount? An NRI can borrow against the security of immovable property from Authorised Dealer subject to following conditions:
The loan should be used for meeting the personal requirements or for borrower's own business purposes
Loan should not be used for prohibited activities, namely
Business of chit fund
Agriculture or plantation activities or in real estate business, or construction of farm houses
Trading in Transferable Development Rights (TDRs)
The loan amount cannot be remitted outside India
Repayment of loan shall be made from out of remittances from abroad or by debit to NRE/FCNR/NRO account or out of the sale proceeds of shares or securities or immovable property against which such loan was granted.