As an NRI, if you are looking to make a profitable investment, there are many reasons to never delay a property investment. Government policies around real estate have enabled greater transparency in the sector, encouraging more investments and simplifying the process for NRIs to invest in Indian real estate. In addition to ensuring high appreciation, Indian real estate also offers NRIs a permanent place to stay if they decide to return to India and the sentimental value of owning property in their home country. While the entire procedure for an NRI to buy property in India has simplified to a large extent, there are a few things to keep in mind. Here are a few investment rules for NRIs in Indian real estate.
Find out about the types of property you can invest in
The Foreign Exchange Management Act of India (FEMA) grants an NRI investing in Indian real estate almost the same property rights as a residential citizen of India. However, there are certain kinds of property that an NRI is restricted from investing in. NRIs are not allowed to invest in agricultural land, plantations, and farmhouses since they are neither residential nor commercial property. However, you can submit an application to the RBI if you want an exception to be made in your case.
Research on the best locations for an NRI investment
Certain areas are quickly gaining prominence among real estate investors because of the rapid development they are undergoing. Areas like Sholinganallur have become increasingly important because of many IT companies opening up their offices here. Because of this, the property values of these localities are appreciating very quickly, making them very attractive real estate investment destinations. Before you zero in on a property to invest in, make sure you explore the top investment hotspots for an NRI investing in Indian real estate.
Choose a reputed builder
When you are an NRI, it becomes all the more important that you choose a credible builder. Since you can’t be physically present to follow up on the construction status or check the quality of construction, a reliable builder with a good track record is very important. A reputed builder will also have all the clearances and certifications in place, which will help speed up the process of buying your first home.
Lancor is one of the leading real estate developers in Chennai with over 33 years of expertise in construction and property development. Our reputation has been built on the cornerstones of transparency and professionalism.
Appoint a Power of Attorney
Being an NRI, you will not be able to be physically present for a lot of the formalities in the home buying process. This is why NRIs are allowed to appoint a Power of Attorney to represent them and act in their best interests. Your Power of Attorney will be able to sign documents on your behalf, inspect your property and even sanction payments. This is why the person you appoint as your Power of Attorney should be trustworthy and reliable. Power of Attorney documents need to be signed by both parties in the presence of a lawyer. This document is very important because without it, your Power of Attorney cannot legally take decisions on your behalf.
Apply for a home loan
NRIs looking for funding options to help finance their purchase can use normal banking channels in India to secure a housing loan. However, all transactions need to be paid back in Indian rupees, so NRIs need to ensure that they have an NRE/NRO account. Like residential Indian citizens, one of the good tips to apply for a home loan is to ensure that they have a good CIBIL score. Some of the documents required for an NRI to apply for a home loan include:
- PAN card
- Original and copies of visa
- Original and copies of passport
- Residential address proof
For a complete list on all the documents required, read our blog on Important Documents For NRIs Investing in Indian Real Estate.
Find out the tax implications of investing in Indian realty
NRIs are granted the same tax benefits that residential Indian citizens enjoy when purchasing a property. If the property is the only one you own in India, it is considered as a property for self-use. In this case, the interest payable on a home loan for it can be claimed under income tax deductions. You can claim a maximum of Rs. 1.5 lakhs as deductions. When a property is rented out, the interest payable can again be claimed as a deduction; however, there is no upper limit for how much you can claim.
A property investment in Indian real estate can prove to be a very profitable decision for an NRI. If you are looking to venture into Indian real estate, make sure you explore properties by Lancor. Our superior construction and reliability make us the best option for NRI real estate investors.