Real estate for the eager NRI

When it comes to investments and returns NRI’s across the board are ever eager for such opportunities. Making the government even more eager to please and attract such investors from abroad. Real estate is constantly drawing the NRI attention and with a stabilized market looking good, these investors are most ready to buy.

The Reserve Bank of India has permitted those NRI’s with Indian passports and people of Indian Origin, to freely put their money in real estate (residential & commercial) and has increased the number of such investors on account of a depreciating rupee value and the offer of better returns. For reasons sentimental and for a sense of security, a homeland investment makes quite the number of NRI’s happy.

On an interesting note, the RBI along with Foreign Exchange Management Act (FEMA) has made rules and regulations lenient for NRIs, by not only simplifying investments policies, but also providing repatriation of capital involved. While an investment promotional council by the government is further creating a more investment-friendly environment appropriate for NRIs.

How NRI’s can invest in Real Estate?

According to the regulations of FEMA and RBI, an NRI is permitted to make specific investment in real estate and is allowed to do the following investment in property:

1] Any immovable property can be purchased by NRI in India other than any agricultural land, farm house and plantation property.

2] Get any immovable property as mentioned above by gift from an Indian resident, Indian citizen residing outside India or person of Indian Origin.

3] Obtain any property by inheritance.

4] Transfer immovable property to any resident of India by sale.

5] Transfer any agricultural land, farm house or plantation land to any resident of India by gift.

6] Transfer residential or commercial property by means of gift to any person either residing in India or abroad or person of Indian origin.

Sources of Finance
Financial institutions consider the NRI Diaspora, one of the most sought after clientele and aim at offering, such a potential group with valued added terms and services. Keeping in mind that NRIs tend to be prompt at the time of repayment. Not to mention, that inward remittance and return on investments via, rent/dividends are a big bulk of business offered by NRIs.

The RBI has also predetermined norms in home loan for NRIs buying any property:

1] A maximum of 80% amount is financed by the financial institution. Rest should be paid by an NRI.

2] The remittance of the amount for down payment can be done from the place of residence by normal banking channels, i.e., NRO/NRE account in India.

3] Furthermore, an NRI has to repay his principal amount as well as interest part from that similar channel only.

 

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