NRIs have always been interested in investing in Indian Real estate. It can be to purchase a house for their parents residing in India or for themselves for vacations in India. In any case, they have seen the potential of the Real estate market.
As an outlet for investment, the real estate industry in India has always seen significant interest from the Indians living in a foreign country. With developers actively trying to attract non-resident Indians (NRIs), in the residential and commercial parts, they can select from a range of choices.
With the low-interest rates on Housing loans & set back of COVID-19, it is the right time to invest with Indian Realty. In addition to practicing the relevant due diligence, NRIs often need to adhere to relevant laws and regulations when acquiring, selling or leasing real estate in India. Before making an investment, understand some of the essential points you need to bear in mind if you are an NRI looking to invest.
Essentials for Purchasing a Property:
The NRI may either come to the country and buy or sell a property or grant a relative the power of attorney (POA) to make a transaction without travelling to India. In India, NRIs can also take advantage of home loans. The Foreign Exchange Management Act (FEMA) regulates the guidelines for any such property deal.
It is advisable to use a non-resident external (NRE) account to fund the purchase of the property since this would allow the NRI to recover the money invested in the asset when reselling the property.
Restriction on Type of Property:
In accordance with our law, An NRI can purchase both Residential and Commercial property. There are no limits on the number of properties they may possess or the size of the property, but an NRI cannot purchase any Agriculture land, farm house, and plantation property. They can claim such property in the event that they have just acquired it from their parents or in the event that it is gifted to them.
For an NRI, revenue from a property located in India is taxable. The measurement of such income shall be carried out in the same way as that of the citizen. This property could be leased out or empty. An NRI is entitled to assert a regular 30 percent deduction, subtract property taxes, and take advantage of an interest deduction if a home loan occurs. The NRI is likewise permitted a deduction for head reimbursement under Section 80C. Stamp duty and registration charges paid on the acquisition of a property can likewise be claimed under Section 80C.
If NRIs buy a property worth 50 lakh or more, at the cost of 1 percent, they will have to pay a TDS withholding. In the case of NRI rental property, they will even have to disclose this income in the country they live and pay taxes if they are not a resident of a country with which India has a Double Tax Avoidance Agreement (DTAA).
NRIs in India can make use of loans from home. The documentation, however, varies by country in which the NRI lives. According to RBI, a financial institution will finance up to 80 percent of the value of the property. You need the rest of the funds to come from your own wealth. An NRI must only use a non-residential external (NRE) account to fund the investment. They can also use the NRE, NRO, or Foreign Currency Non-Resident (FCNR) account post-dated cheques or Electronic Clearance Service (ECS) to transact the money.
It is also necessary to remember that all transactions just have to be carried out in Indian rupees.
Knowledge About Builder:
Investors in NRI should stay away from ventures by unknown designers. Many investors have faced difficulties in bringing their funds into projects that have lacked required clearances and have fallen short of even the basic quality requirements. If an NRI intends to visit and review projects in India, it should only opt for trustworthy developers such as the SBP Group.
In all cases, NRIs must strictly check factors, such as the developer’s track record and brand recognition, the social and personal facilities available at the site, the project amenities and the schedules for possession, in the case of under-construction projects.
Real Estate Regulatory Authority (RERA) Registration:
They can also search whether or not the project is registered with RERA 2016. Each housing project has a RERA registry number in today’s time and one can verify the number online. There is a RERA number for even an under-construction project. It normally begins with the initials of a state (name) and anyone will know the construction status of a project on the RERA website with this figure.
Consult a Lawyer:
As an NRI, it is best to consult and employ a lawyer for legal advice when dealing with real estate. No matter how carefully you are investigating, there can still be certain loopholes that you may not find. Be it the title validation to the registry of the property; a property lawyer will assist the NRIs with all the legal formalities involved with a sale of the property.
Make sure that, when making most of the transactions through online payments or cheques, you log any promise made by the builder. As you can use it proof in case any issue arises in the future.
All these are very important points to consider before you make any investment in Indian Realty if you are an NRI. As an investor, you have all the right to know about the detail of the project you are investing in as it is your money which is at risk while investing.
Only after receiving the desired answers, you should invest. We at the SBP Group are always ready to help you. With the trust of thousands of families from all over Punjab, we earned the title of No. 1 Housing Company in Punjab. You can get the best residential property with great amenities with us.