Things NRIs Should Know When Investing in Indian Real Estate

Posted by Varun Mishra on March 11th, 2021

In India, real estate investment has always been a lucrative proposition for NRIs. The recent government moves to introduce RERA in real estate has brought more accountability and transparency in the sector. This has further fuelled the interest of NRI investors.

What makes the Indian property market so lucrative for NRIs is the fact that an NRI investment can achieve a higher return on investment with lower capital investment. To make sure that you do not face any obstacles or legal hurdles in your journey towards investment in Indian real estate, here are some important regulations, laws, and pointers that you must remember.

• Tax benefits and foreign exchange rules

NRIs investing in property should follow the FEMA or Foreign Exchange Management Act of India regulations. Non-resident Indians who possess an Indian passport do not need RBI approval to buy real estate in India. Additionally, the Indian taxation norms and laws have to be adhered to while investing in Indian real estate. Therefore, it is extremely crucial to know and familiarize yourself with the NRI tax structure and the tax benefits eligible for as per the Indian Income Tax Act. This knowledge and understanding will help you reduce the tax burden and prevent double taxation.

• Quality real estate market

Investment in a real estate property that may have a higher potential for appreciation is crucial to ensure better returns. For instance, the southern part of India has observed a huge growth in IT and e-commerce-related companies, with Bangalore, Chennai, and Hyderabad locations offering very lucrative returns to NRI investors. A licensed real estate agent can provide the best investment advice on the current markets in India. A real estate consultant in Mumbai can also provide efficient services for property management that will ensure the safety and security of your investments. 

• Eligibility

NRIs can invest in either commercial or residential real estate properties. NRIs are not allowed to buy any kind of farmland, plantation land, agricultural land, or farmhouse land in India. But, they are eligible to get such properties as gifts or inherit the properties from generations. In a few scarce cases, a court may allow you to invest money in some restricted real estate properties. But the chances are highly bleak and the judgment is provided only in a few cases.

• Power of Attorney

The Power of Attorney or POA is a document or letter that authorizes a particular person to make decisions and execute them in the name of the main owner of the said real estate property, for example, the NRI. If a Non-resident Indian cannot come to the country often to be present in various real estate transitions, then they should delegate the POA to a competent person or firm which can act on the transactions on their behalf. The POA document is signed and registered to prevent any kind of disputes or fraud thereon. The person holding the PQA can sign the documents, visit the project, and make decisions according to the best interest of the NRI investor, in case they are not present physically.

• Choosing a good builder

For NRIs, it is important to select a reputed builder with a clean track record to ensure their investment bears fruition within the stipulated period. In most cases, NRIs are not physically present in the country to check the progress of the project, and any delays or hindrances can make things complicated for them. A good builder with credibility and reputation can ensure that the project gets delivered within the specified timeframe to bolster the chances of a better return on investment for the NRIs. 

Licensed real estate agents in Goregaon East can provide you with expert advice and guidance on the reputed real estate developers as well as their marque projects. They can equally ensure the safety and security of your investments on your behalf.

Real estate investment provides some of the most lucrative return on investments for NRIs however, it is important that you know and understands the regulations on the Indian real estate market to get the most out of your investments. 

If you want to find the best real estate agents, then you must visit OPENMINDS today.