Property Investment in India: A Step-by-Step Guide for NRIs

Real estate investment has become an attractive option for Non-Resident Indians (NRIs) looking to expand their investment portfolio. Whether you are exploring property investment opportunities or intend to purchase real estate to diversify your investment portfolio, you can choose from a wide range of options.

Real estate investment in India is no longer a dream, as companies like The Address Co, are making it possible for NRIs to own Indian property, buy land, and shop for the best property with ease. In recent years, owning Indian properties has become a popular investment choice amongst NRI’s because of the lucrative returns. So, whether you are looking for residential plots, apartments, or commercial property, The Address Co, can be your one-stop platform.

Why should NRIs invest in Indian Real Estate? 

Capitalizing on the growing Indian real estate market, NRIs have been increasingly investing in India. So, if you are based abroad and are exploring property investment options or an end-use property, you should seriously consider investing in Indian real estate for the following reasons…

Appreciation in Property Value-- is wise to purchase real estate properties in major cities like Mumbai, Pune, Bangalore, and Delhi. These cities have witnessed an appreciation in overall property values due to rapidly growing infrastructure and connectivity.

Rental Income -  Property investment in urban areas also ensures high rental yields, producing profitable rental income. 

Long-term security and portfolio diversification - Owning a property provides long-term financial security and ensures portfolio diversification. 

Emotional Ties - Further, NRIs looking to foster emotional ties back home should consider owning property in India so they can return home anytime. 

Economic growth - India is on a path of economic growth, and NRIs can contribute and be a part of it. 

Eligibility Criteria for NRIs to Invest in India 

While India has emerged as a lucrative real estate market for NRIs because of the substantial return on investment and favorable exchange rates, NRIs must navigate legal regulations and documentation requirements and ensure that properties they are considering are RERA compliant. Here are some factors to consider while investing in real estate in India. 

Get Documentation in Order 

Proper documentation is vital to ensuring a hassle-free experience. An NRI must produce a valid passport, PAN card, or OCI/PIO card wherever necessary. Always verify the property's title before purchase, and hire a reputable lawyer to vet all documents and ensure they are in order.

Research Legal Regulations 

Foreign Exchange Management Act (FEMA) rules apply to property transactions by NRIs in India. According to these rules, an NRI can invest in residential and commercial properties. However, they cannot purchase a farmhouse, agricultural land, or plantation property, unless inherited. Hence, NRIs need to understand these regulations to avoid legal complications. 

Repatriation of Funds 

The Reserve Bank of India (RBI) allows NRIs to repatriate the proceeds from property sales, provided adequate documentation is provided and RBI guidelines are adhered to. Understanding these procedures is critical to ensuring a smooth transfer of funds to the NRI's country of residence. 

Location and Developer Reputation 

Ensure the real estate project's location offers great connectivity and infrastructure. Also, choose a reputable developer whose projects are RERA compliant to avoid falling prey to fraud. 

Market Trends and Potential Appreciation 

To ensure a good return on investment, research market trends and potential appreciation. 

Use NRE, NRO, or FCNR accounts for funding  

Financial planning is critical while investing in real estate projects in India. NRIs should start by allocating a budget. Open (Non-Resident External) NRE accounts or (Non-Resident Ordinary) NRO accounts, as these ensure seamless property transactions. Also, explore home loans tailored to your requirements as an NRI, which can help fund your property purchases. You can also consider opening a Foreign Currency Non-Resident) account, a fixed deposit account designed explicitly for Non-Resident Indians (NRIs). It allows you to save money in foreign currency, earning interest on deposits without the risk of exchange rate fluctuations. 

Understand Tax Implications for NRIs  

Taxes on properties include stamp duty and registration fees, which vary by state. Additionally, NRIs must pay capital gains tax on the sale of the property. Consult a tax advisor who can help you understand the tax implications to avoid future complications. Please speak to your tax advisor about the long-term capital gain tax and short-term capital gain tax when applicable. If you want a one-stop solution and are looking for experts who can help you invest in India, consider approaching Address, 5th floor, DLF Horizon Two, Phase 5, Gurgaon, Haryana 122002. 

Email: Sandeep@theaddressco.in or contact: +91 98115 97434.