Rules/Procedures For NRI Property Purchases In India

NRI Property Purchases In India: NRIs may buy real estate in India in accordance with the Foreign Exchange Management Authority’s laws and regulations. Except for properties used for farming, such as plantations, farmhouses, and agricultural property, they can purchase both domestic and business properties.

NRIs can fund their homes through their chosen non-banking financial institution or bank, and they are also eligible for house loans. However, there are specific guidelines and processes for NRI property purchases in India.

Continue reading to learn some helpful guidelines for NRI property purchases in India.


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How many homes can an NRI purchase in India?

Investments in domestic, business, and industrial real estate are permitted from NRIs and PIOs in any quantity. The volume or quantity of properties that may be bought are not subject to any limitations by the RBI. When purchasing in major cities and job centers, NRIs and PIOs typically invest in domestic properties like studios and apartments, while when purchasing in small towns and cities, they typically invest in plots of land and individual homes.

The NRIs/PIOs also engage in business properties in emerging and growing areas to produce steady income for their future and to benefit from price appreciation and profits at a later stage of their lives. NRIs and PIOs are typically thought to engage in secure business real estate, such as stores, mall spaces, and art galleries. They occasionally also engage in commercial buildings and REITs in India.



NRI Property Purchases In India: Purchase of Agricultural Property

Under Foreign Exchange Management Act, 1999 (FEMA) and the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, an NRI is not allowed to buy any agricultural land/plantation property/farmhouse in India through the automatic route.

The RBI may grant an NRI special approval to buy farmland, farming property, or a home after taking into account a number of variables, which constitutes one exception to this regulation. Additionally, NRIs can just receive farmland from an Indian citizen.


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Rules and Regulations for Real Estate Acquisition by Non-Resident Indians (RERA)

The RERA (Real Estate Regulatory Authority) act, put into effect by the Indian government in 2016 to promote openness and responsibility in house purchases, provides protection for NRI/PIO purchasers. NRI investment in India has been significantly boosted by the legislation, which was introduced to uphold and safeguard the interests of buyers (including NRI/PIO) and to settle disputes between builders and buyers.

In order to keep accountability with RERA in effect, every contractor is now required to update the homebuyer on the status of the building, follow the deadlines, and adhere to all other rules set forth by the RERA act. The legislation has been essential in providing the NRI community with the regulatory clarity and stable pricing climate that they have always struggled to obtain.

The RERA act has been successfully implemented in more than 22 Indian states and 6 union territories, including Gujarat, Madhya Pradesh, Chandigarh, Uttar Pradesh, Delhi, Maharashtra, Andhra Pradesh, Odisha, Bihar, Rajasthan, Jharkhand, Uttarakhand, Tamil Nadu, Karnataka, Punjab, Chhattisgarh, Haryana, Assam, Telangana, Himachal Pradesh, Goa, Tripura, Puducherry, Kerala, Manipur, Mizoram, Daman and Diu, Lakshadweep, Andaman and Nicobar Islands, Dadra and Nagar Haveli.

For all the properties that are RERA-registered, these states and union territories offer security to their purchasers, including NRI/PIO buyers. Thus an NRI/PIO investor wanting property in India must look out for the RERA licensing of the property, to become qualified for getting penalties from the builders and developers in case of delay or default of the project deadlines.



NRI Property Purchases In India: NRI Housing Loans in India

There are several choices available to NRIs and PIOs when buying a home in India. They have two options for funding: either they can use their own money from their NRE/NRO funds (Non-Resident External) or obtain credit from an Indian bank.

According to the FEMA act, an NRI may use regular banking channels to transfer funds for this transaction or may use the remaining amount in one of their non-resident rupee (NRE), non-resident ordinary rupee (NRO), or foreign currency non-resident (FCNR) accounts.

For the purpose of buying a property in India, he or she may also file for a bank credit from one of the many notified institutions in India. While the typical repayment time for home loans taken out by NRIs is between 15 and 20 years, some financial organizations also give loans with a longer repayment term of 30 years. The Equated Monthly Instalment (EMI) cheques for an NRI house loan must, however, be given from the NRI’s NRE or NRO account and not from another source. including his/her savings account in India.


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Home Loan Eligibility Requirements for NRIs in India

People of Indian blood, descent, or extraction who have made their homes outside of India are referred to as NRIs and PIOs and are qualified for house loans. By definition, NRIs are Indian citizens who reside in India for less than 182 days during the course of the preceding financial year or citizens who have gone/stayed outside India for the purpose of employment, for carrying on business or vocation, or for any other purpose indicating his intention to stay outside India for an uncertain period. Instead, a PIO is a foreign national (other than from Bangladesh or Pakistan) who has ever carried an Indian passport, had Indian parents or ancestors, or has an Indian-born spouse.

The guidelines NRIs must abide by when selling their property situated in India can be found in the sections that follow.


Rules for Selling a Property in India as an NRI or PIO

There are no limitations on selling a property to a resident Indian. But if an NRI or PIO wants to sell the property to a non-resident Indian or a person of Indian origin, they may need RBI permission. (POI). No PIO or NRI may transfer a home to a foreign buyer.




Documents Required for NRIs to Sell Property in India

Below is the list of documents which are require for selling a property in India:

  • Title of the property (in the seller’s name)
  • No objection certificate, reflecting litigations, debt and lien-free status of the property
  • Occupation certificate (OC), issued by the municipal corporation
  • Plan approval or sanction certificate
  • Cooperative share certificate (valid for properties in a society building)
  • Permanent Account Number (PAN) of the seller
  • Non-Resident Ordinary (NRO) bank account. Which is a savings or current account that NRIs maintain to manage the income earned in India.

If the property’s NRI/PIO purchaser is unable to travel to India. They must appoint an agent through a power of attorney. This representative could be a part of the family, close acquaintances, an assistant, a lawyer, or another specialist. Discover how an NRI can implement a power of attorney here.


Key Lessons on NRI Property Sales or Purchases in India

Learn a few things about purchasing or selling real estate as an NRI in India.

  • In India, NRIs are not permitted to buy farm land. They must obtain a Reserve Bank of India authorization if there is a justification for such a buy.
  • NRIs are permitted to obtain an unlimited number of house loans to purchase real estate in India. For each house, there must be a separate mortgage, though.
  • An NRI property vendor needs to give their trusted individual a Power of Attorney if they want them to handle the deal in India.
  • When purchasing a home, NRIs must pay all applicable taxes and stamp obligation fees.
  • In India, NRIs are permitted to sell out their real estate. However, according to IT regulations, the leasing revenue will be taxable.
  • When an NRI sells a property, including family property, they are also liable for capital gains tax.





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Disclaimer: The views of this expressed above are for informational purposes only based on the industry reports & related news stories. does not guarantee the accuracy of this article, completeness, or reliability of the information & shall not be held responsible for any action taken based on the published information.
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