Earlier, the restrictions imposed on real estate investment scared away many potential buyers. In order to strengthen the real estate sector, RBI eased its norms for NRI investment in India real estate.
Foreign investment benefits the country’s economy and our government is working to bring more foreign investment to our country.
Even after taking a hit in the economy, the real estate sector still shows tremendous capital growth.
Real Estate after Covid-19
The lockdown amid Covid-19 shattered the economy of our country. It was a nightmare for the financial structure of our country.
As soon as the lockdown was lifted, some sectors showed significant growth. Real estate was one of them. Surprisingly, the majority of the investors were NRI.
The main reason for NRI buying property in India was the reality check thrown on them by foreign countries. Since the real estate sector is giving huge returns, India became a perfect retirement spot and a profitable investment.
To overcome the distress caused by Covid-19, the Indian government started various initiatives such as stamp duty reduction, 50% reduction in premiums, extension in loan moratorium. These steps gave rise to the NRI investment in India.
Why NRI Buy Property In India?
NRI investment in India real estate has always been a matter of debate. You will find people on the Indian real estate forum discussing their skepticism regarding the returns on real estate.
Despite all the uncertainty and downfall in the economy, the real estate sector has attracted foreign investment in our country.
Few things make India a profitable real estate center:
Reforms and policies
Under the leadership of India’s Prime Minister, the Indian real estate sector has become safe, transparent, and profitable. The current government focuses on foreign investment and relations. NRI investment in real estate is another way of expanding foreign exchange within the country.
Our government has strengthened various acts that attract foreign investment in real estate. RERA Act, Benami Property Act, Foreign Direct Investment, etc have paved a smooth path for foreign investors.
Better returns on investment
India is a progressive nation, On top of that, it is one of the highest populated countries in the world. Every piece of land is being allotted to commercial, residential, or government projects.
The property rates are increasing exponentially in our country. In the last few years, we have seen a tremendous hike in rental returns. NRI investment in real estate gives high returns to the owners.
Easy loan approval
Our government is constantly trying to bring foreign investment to our country. After the reduction of stamp duty and tax rates, the government has also initiated home loans for NRIs.
Like any other Indian citizen, NRIs can avail the benefit of loans and tax rebates.
Guidelines For NRI Real Estate Buyers
New policies in the real estate sector have made the NRI investment in India real estate a piece of cake. However, there are certain requirements and guidelines for NRI’s to buy property and that must fulfill:
People are very skeptical about NRI investment in India. Myths are flying everywhere, stating a huge list of documents required for NRI to buy property in India.
Suppose you are well informed and choose your information source wisely. In that case, you must be aware that the list of documents required is as basic as applying for a driving license.
Here is a list of required document for buying property in India as NRI:
● Address proof
● Permanent Account Number (PAN)
● Recent photograph
It is highly unlikely to face any difficulty in arranging these documents.
Foreign Exchange Management Act made foreign investment in India transparent. It worked to benefit Indian citizens and ruled out conceivable infiltrators from buying a residence in the country.
It excluded agricultural land or plantations. According to the FEMA, any Indian origin or NRI person can buy any immovable property in India. However, citizens of our neighboring countries like Pakistan, Bangladesh, Nepal, Bhutan, Afghanistan, China, or Sri Lanka are not authorized to buy any property in India.
Mode of transaction
To keep the transaction secure and convenient for realtors, the Indian real estate board restricted the use of foreign currency or traveller’s cheques. Funds that are traversing through normal banking channels are safer and faster.
The only ways accepted in India for real estate are the funds received through normal banking channels or any non-resident account that fulfills the RBI guidelines.
In case, the buyer wants to transfer the property within the country, there are no permissions required. Similarly, while renting out a property within the country, no additional permissions are required.
Inheritance and gift
Inheritance of property through generations or acquiring property as a gift from relatives is the most common way of transferring property in India. Any estate that is legally owned and fulfilled by the regulatory guidelines of the Indian real estate board is easy to transfer.
There is no permission required for acquiring property as a gift from an Indian resident. The same goes for the property owned by NRI. The Indian government imposes no regulations for property inheritance.
Power of Attorney (POA)
With all the frauds and forgery, How can NRI buy property in India? To complete all the required paperwork, the NRI buyer can appoint a POA. It can be a friend, relative, etc, who can be the representative for the NRI.
Many steps require the physical presence for buying property in India as NRI. Instead of travelling to India, it is wise to appoint a trustworthy POA.
Our government has changed the face of foreign investment in our country. The increase in the percentage of NRI investment in real estate is proof of the economic potential of our country. The next few years are going to return the best profit on real estate. The right investment at the right time can bring fortune to your life.