Policy changes to attract NRIs to Indian realty in 2017
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Indian realty
29 August 2017 - 9:27, by , in NRI, No comments

The Indian realty has always been quite attractive for non-resident Indians (NRIs) who are keen to have some roots in their home country. The reasons for NRI investments could be varied right from upgrading their family home, offering a better lifestyle to their parents, to having a signature property on their back home.

The major policy initiatives such as the passage of the Real Estate (Regulation and Development) Act 2016 and the amendment to the Benami Transactions Act, has impacted the real estate sector in a big way. Transparency and culture of trust are necessary for every deal. Demonetisation has resulted in a situation of limited or no cash in the market to be parked in real estate assets. GST may not be instrumental in bringing down the prices of residential real estate over the short term. However, it will benefit all the stakeholders of the residential real estate sector, as the perception of the sector will improve on the back of a simplified tax structure.

The real estate sector stands to benefit from the fact that GST would provide more clarity on tax-credits for real estate transactions and allowance of input credit will reduce the price of properties and will change the way the real estate sector operates in India. It aims to enhance transparency, bring greater accountability in the realty sector and set disclosure norms to protect the interest of all stakeholders. Speedy execution of property disputes will also be ensured in due course. For NRIs, the investment sentiment is greatly boosted by the reforms that have resulted in greater transparency and the amended rules and regulations have greatly simplified the purchasing processes. The real estate sector is expected to get cleaned with the elimination of black money clubbed with multiple regulatory changes such as the goods and service tax act, real estate (regulation and development) and amendment of the

For NRIs, the investment sentiment is greatly boosted by the reforms that have resulted in greater transparency and the amended rules and regulations have greatly simplified the purchasing processes. The real estate sector is expected to get cleaned with the elimination of black money clubbed with multiple regulatory changes such as the goods and service tax act, real estate (regulation and development) and amendment of the Benami transactions (prohibition) act. subsequently, project approvals will be quicker, resulting in substantial reduction in the total cost of construction, thereby, the per unit cost. The Act will have positive consequences for the sector in terms of transparency, accountability, and avenues for grievance redressal, which will mean lower litigation cost for buyers. It will also ensure that only serious players will remain in the sector leading to greater transparency in the sector.

The Foreign Exchange Management Act (FEMA) along with Reserve Bank of India (RBI) has become lenient in the policies for NRIs who are looking to invest in India. Factors like FDI in real estate sector; relaxation of laws by the RBI regarding property buying by NRI has accelerated investments. Also, the availability of affordable properties in the Indian realty segment is a major reason to attract a large number of urban NRI population. the residential market in 2017 is hence expected to shift from a pure price play mechanism towards a market that is driven by a commitment to delivery, quality, and right pricing strategies.

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