Who are the persons who can purchase immovable property in India ?
- Under the present regulations only a person who is citizen of India (an NRI) or a person who is of Indian origin (a PIO) can purchase only a residential or a commercial property in India.
Who is a Person of Indian Origin (PIO)
- For the purpose of acquisition and transfer of immovable property in India, a PIO means an individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan), who (i) at any time, held Indian passport, or (ii) who or either of whose father or grandfather was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955).
Is an NRI or PIO who has purchased any residential/commercial property under the General permission required to file any documents with the Reserve Bank of India?
- No, an NRI or PIO who has purchased any residential/commercial property under the General permission is not required to file any documents with the Reserve Bank of India.
Is there any restriction on the number of residential or commercial properties that NRI/PIO can purchase under the general permission available?
- No, there is no restriction on the number of residential or commercial properties that NRI/PIO can purchase under the general permission available.
Can a name of foreign national or non-Indian origin be added as a share holder to a residential or commercial property purchased by NRI or PIO?
Can a foreign national or non Indian origin resident outside India acquire any immovable property in India by way of purchase?
- No, under Section 2 (zed) of the Foreign Exchange Management Act, 1999 ‘transfer’ includes among others, ‘purchase’. Therefore, a foreign national of non-Indian origin resident outside India can not acquire any immovable property in India by way of purchase.
Can a foreign national of non-Indian origin acquire residential property on a lease in India?
- Yes. A Foreign National of anon-Indian origin including a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan may acquire only residential accommodation on lease, not exceeding five years for which he or she does not require prior permission of Reserve Bank of India.
Are Non Resident Indians (NRIs) & Foreign Citizen of Indian origin (PIOs) allowed to acquire or dispose immovable property in India?
- Yes, The Reserve Bank of India has clearly granted permission to all Non Resident Indian’s (NRIs) & Foreign Citizens of Indian origin (PIOs) to acquire & dispose immovable property in India, be it Residential or Commercial Property. However the RBI has a restriction on the purchase of Agricultural Land/Plantation Property or Farmhouses in India.
How can an NRI / PIO make payment for purchase of residential / commercial property in India?
- Payment can be made by NRI / PIO out of: Funds remitted to India through normal banking channels or Funds held in NRE / FCNR (B) / NRO account maintained in India by him/her. No payment can be made either by traveller’s cheque or by foreign currency notes or by other mode except those specifically mentioned above.
Can NRI's/PIO's rent out the residential/commercial properties in India?
- Yes. Reserve Bank has granted general permission for letting out any immovable property in India. The rental income received can be credited to NRO / NRE account or remitted abroad. This income is eligible for repatriation based on certain conditions levied by the Reserve Bank.
What is the repayment option and tenure of loans from Authorised dealers and Financial Institutions?
- The purpose of loan margin money and the quantum of loan will be at par with those applicable to housing loans to residents. Repayment of loan should be made within a period not exceeding 15 years out of inward remittances or out of funds held in the investor’s NRE/FCNR/NRO Accounts.
Can an NRI give a Power of Attorney to a person in India for completion of loan formalities on their behalf?
- Yes, NRIs can definitely appoint a Power of Attorney to complete all loan formalities towards the purchase of a property in India, considering the fact that an NRI wouldn’t be in India for long periods. The stringent formalities followed by Indian banks, only means that the appointment of a Power of Attorney would be ideal.
How much loan can an NRI or PIO get?
- An NRI or PIO can get a Home Loan of up to 85% of the Total Consideration Value of the property.
Can foreign citizens of Indian origin acquire or dispose of residential property by way of gifting it?
- Yes. The Reserve Bank of India has granted general permission to foreign citizens of Indian origin to acquire or dispose of properties up to two houses by way of gift from or to a relative who may be an Indian citizen or a person of Indian origin whether resident in India or not, provided gift tax has been paid.
What if an immovable property was held for less than ten years ?
- If an immovable property acquired out of rupee funds is sold after being held for less than ten years, remittance can be made, if the sale proceeds were held for the balance period in NRO account (Savings / Term Deposit) or in any other eligible investment, provided such investment is traced to the sale proceeds of the immovable property.