India’s long standing parliamentary democracy and liberal economic policies make it a safer destination than many emerging markets. NRI must consider several factors while assessing the risk in the realty market.
While NRIs may want to investments in Indian real estate to benefit from correcting prices and a depreciating rupee, there is much research and careful planning involved.
Nowadays, many Indian developers conduct road shows in abroad. NRIs should not be entirely convinced by impressive presentations and glossy brochures. They should send someone to visit the property’s site and check the ground realities. Decisions taken via a phone call or a presentation over the email may turn out to be hazardous. This is the sole reason that before you allow to get stricken by the flash you need a mandatory check. The buyer needs to check the surrounding area of the property, the connectivity as well as the location.
Often the pricing abroad is higher than the domestic price, so the buyer needs to first check the rate of which the project is being sold in India. Noted it would certainly be better to search for finished projects than ones that need a lot of work, as well as not paying all the money upfront, instead opting for a construction-linked payment plan or such.
Apart from knowing how to purchase a property, NRIs must know various properties available to purchase. Some of the best real estate to invest on comes under builders who hold a good reputation in the market, making it an easier decision for NRIs to get the most profitable long term investment.
The RBI has given a general permission to banks and housing finance companies registered with the National Housing Bank to give loans to NRIs for buying residential property in India. Sanctioned in Indian currency, the loan is repaid using the same currency. However, the loan amount, according to the regulations, cannot be credited directly to the bank account of an NRI and has to be disbursed to either the seller’s or the developer’s account. The loan can be repaid using funds in a NRIs NRO/NRE account or FCNR deposits.
NRIs can give PoA to their friends or relatives to complete the property purchase process in India. The PoA can be general or specific about the rights your representative can exercise.
Apart from the registration cost and stamp duty, a service tax is also levied on the transaction. It depends upon the property you are buying. If you are buying a property that is being constructed by a builder, you will have to pay a service tax of 12.36% on 25% of the total price for apartments up to 2,000 square feet and 30% for bigger apartments.For a built-up property or a single residential unit, stamp duty is to be paid on the purchase of the property. The stamp duty payable varies from state to state and is different for properties in rural areas.