Wondering whether or not NRIs can buy properties in India? To simply answer your question, Yes! The NRI real estate investment is a lucrative option. However, there are legal provisions that NRIs should be aware of before owning or purchasing immovable property in the country within the FEMA.
An investor does not need any specific permit from the Reserve Bank of India. Besides, no other intimation or communication is required to send to the RBI. With the existing general permissions, an NRI can buy any number of commercial and residential properties. Moreover, the income tax laws permit an NRI to own as many properties as possible.
In any situation, a person with the Power of Attorney can execute the necessary documentation to acquire the property if the NRI cannot travel to India. It is crucial to realize that NRIs cannot own any plantation property or agricultural land in India. If any NRI is interested in purchasing the farm or plantation, specific RBI approval is needed. This is taken into account by the Reserve Bank of India on a case-by-case basis.
What is the mode of payment?
When buying the property in India, NRIs must carry the transaction in Indian rupees and via local banks. The NRIs wishing to invest in property in India should have an NRI account in any Indian bank.
The NRI property investors must route the transactions through the Indian banks and ensure they use the NRE/NRO accounts for the complete inward money remittances. The NRI must verify all the documents before approaching any banks for the funds. Next, get a certificate from the seller, which states that no lien is attached to the respective property. In case the property is held jointly or inherited by a seller. Ensure the title deed is clear. The NRIs also need to ensure that no other dues or bills with any authority are to be cleared.
What if You Become an NRI Later?
It’s possible that you currently own property in India and go on to become an NRI. In this situation, you can still hold the property in India under your name. The farm, plantation, or agricultural land you owned before becoming an NRI may still be owned by the NRI. Purchasing something would generally be prohibited after becoming an NRI. In addition, regardless of when the property was purchased, renting it out is allowed. Rent payments from any such property can be made right away. The prerequisite is that any such rent should have been taxed adequately under Indian law.
The NRIs can also gift or sell immovable property to any Indian resident. Apart from any plantation property, farmhouse, or agricultural property, one can transfer or gift any property to any NRI.