For NRIs, property purchase in India is not as easy as it is for the local countrymen and this is because of several clauses. But, the main concern is financial assistance. The NRIs i.e. the Non-resident Indians either have ample money to make property investment in India, else they look for financial assistance to buy property in India. So, this blog post let the NRI property investors know the funding options for buying the asset back home.
1. Sources for Real Estate Investment in India
Firstly, the NRI is not eligible to buy an immovable asset in India by availing home loan in INR i.e. the Indian currency. However, an Indian employer can sanction the home loan for the NRI investor. The entire financial funding is mandatory to be deposited via proper bank channel. The NRIs property buyer cannot finalize a property deal in India by offering payment via traveler’s cheque or foreign currency.
2. How NRIs can avail Home Loan
The NRI investment in India is restricted only to residential and commercial properties. Thus, the banks also provide loan for only these two property buying transactions. Although, the NRI can invest in a plot to construct a home but he/she is not eligible to purchase agricultural land.
The NRIs can make an online and offline application to avail home loan by submitting necessary documents. However, the set of required documents varies for every individual as it depends on whether the NRI buyer is a self-employed or a salaried professional.
The NRI property investor has to fulfill the required duration of stay in India to get loan sanctioned. The banks can also ask for a co-applicant or a co-guarantor to approve the loan.
The documents like permanent address proof, present address proof and others should be available with updated details to get financial assistance to purchase property in India.
3. Repayment of Home Loan
Remittance from outside India is a way to repay the home loan amount, however, this should be paid through a proper bank transaction. Else, a home loan can be repaid by debiting NRE, or NRO, or FCNR account. Those, yielding rental income from property in India can use the same to repay the loan amount.
Similarly, the funds transferred in NRO account by the close relatives can be used to repay the loan amount.
In case of purchasing property for self-occupancy, the NRI can opt for a loan against the FCNR or NRE account deposits, to maximum of Rs. 1 crore for repaying the loan.
4. Remittance Outside India
The NRI buyer is allowed to repatriate some of the funds in case the brought property is sold. However, fund remittance can only be carried out for two properties maximum. In a normal scenario, the NRI buyer can remit USD 1 million in a year outside India from his/her NRE, NRO, or FCNR accounts. This includes the amount remitted for sale of a house.