For the NRI who has decided to come back to India, purchasing property would most likely be on the agenda. In order to live in it or invest in it as a rental property, purchasing property in India comes with its own rules, regulations, and possibilities. This manual is what will guide you through the process and choices of finding and purchasing property in India as an NRI when you get back.
Determine Your Budget and Investment Plan
Prior to entering the property sector, you need to determine your budget and confirm that you possess a realistic financial plan.
Analyzing Your Finances: Determine how much you can afford and whether you’ll require funding. Calculate your savings, repatriated funds, and outstanding debt.
Home Loans for NRIs: Many Indian banks offer home loans specifically for NRIs. The eligibility criteria may include factors like your overseas income, credit score, and the location of the property you’re purchasing.
Confirm Exchange Rates: Since you’ll be paying through foreign exchange, exchange rates at the time of purchase would significantly vary the amount to be paid in Indian Rupees. Purchasing when exchange rates are favorable to you will help you save plenty of money.
Research the Real Estate Market
Indian real estate is relatively varied in nature depending on the city, location, and category of property. Conduct thorough research to have a notion about market trends, price of property, and growth spots.
Location is Important: Decide where you would like to buy the property. Mumbai, Bengaluru, and Hyderabad are some of the cities that have good real estate markets with a mix of residential, commercial, and investment properties. Research the infrastructure, facilities, and future development planned for the area you have selected.
You may like to read: Best Indian Cities for NRIs to Buy Property in 2025
Property Types: Select the type of property you want to own—apartment, independent house, or plot. All these have their officialities and charges.
Real Estate Agents: Getting a good real estate agent who is familiar with his market will not only take you to the most suitable property, but also familiarize him with your style of doing business .
Familiarity with the Legal Framework
Property acquisition in India involves knowledge of legalities pertaining to the same, especially for resettling NRIs.
Clear Title and Ownership: Ensure the property has a clear title, i.e., no encumbrances or disputes. Verify the ownership history and ensure there are no liens or outstanding debts.
RERA Compliance: As per the Real Estate (Regulation and Development) Act, 2016 (RERA), every developer is mandated to get their project registered with the state RERA authority. The act makes project completion on time as well as protects buyers from malpractices. Check if the property is RERA-registered for enhanced security.
Property Documents: Hold in possession all documents required, i.e., the sale agreement, title document, encumbrance report, and proof of payment of property tax. In case of resale property, obtain an original sale deed for its authenticity.
Taxation and Financial Issues
Buying property in India as an NRI means a plethora of taxation and finance issues.
TDS while Buying Property: If the cost of the property is over ₹50 lakh, the buyer has to withhold 1% of the amount received from the seller as TDS and pay it to the Income Tax Department.
Property Tax and Maintenance Charges: Don’t miss recurring expenses like property tax, maintenance charges, and electricity bills. These also need to be factored into your budget.
Wealth Tax and Inheritance: While wealth tax is no longer there in India, inheritance planning and estate planning is strongly required in the future. Take the assistance of a tax consultant if you wish to bequeath the property to your relatives or family to prevent non-compliance with Indian taxation legislation.
Repatriation of Sale Proceeds
If you plan on selling the property in the future and reselling it, repatriation of sale proceeds is something to be considered even before you end up buying it.
Repatriation Limit: Sale proceeds of two residential properties may be repatriated from India. An NRI may repatriate up to USD 1 million in a financial year, including all properties, with some conditions.
NRO Account for Transactions: For the transaction, you may have an NRO (Non-Resident Ordinary) account to manage the proceeds of rent or sale. In the event of transactions related to substantial amounts, seek the assistance of a financial advisor for advice on repatriation facilities.
Conclusion
Buying property in India after returning to India as an NRI is a large financial decision that requires systematic thinking and legal, financial, and tax implications. By conducting proper research, budgeting openly, and taking professional help, you can venture into the Indian real estate market with confidence. For professional insights on real estate investment and finances, feel free to contact Prime Wealth, the go-to partner for NRIs for handling real estate investment and overall personal finance.
FAQs
- Can NRIs buy property in India?
Ans – Yes, NRIs are allowed to purchase residential and commercial properties in India. However, they are not permitted to buy agricultural land, plantation property, or farmhouses. - What type of properties can NRIs buy in India?
Ans – NRIs can buy any residential or commercial property, but they cannot purchase agricultural land, plantations, or farmhouses. - Is RERA compliance important when buying property in India?
Ans – Yes, purchasing RERA-compliant properties ensures transparency and protects you from fraudulent practices. RERA registration guarantees timely completion of projects. - Can NRIs get home loans in India?
Ans – Yes, NRIs can apply for home loans from Indian banks, subject to eligibility criteria like income, credit history, and the location of the property. - How much TDS should I deduct when buying property in India?
Ans – If the property value exceeds ₹50 lakh, 1% of the sale price must be deducted as TDS by the buyer and deposited with the Income Tax Department. - Can NRIs repatriate the proceeds after selling property in India?
Ans – Yes, NRIs can repatriate up to USD 1 million per financial year, provided they comply with repatriation regulations and tax requirements. - What documents are required for buying property in India?
Ans – The essential documents include the sale agreement, title deed, encumbrance certificate, property tax receipts, and if applicable, RERA registration details. - What is the tax liability for NRIs when purchasing property in India?
Ans – NRIs are subject to TDS on high-value property purchases and may also incur property tax, maintenance fees, and other ongoing costs. - Is it better to buy under-construction or ready-to-move properties as an NRI?
Ans – Ready-to-move properties have fewer risks, as they are immediately available, while under-construction properties may come with delays and other uncertainties. - How can Prime Wealth assist NRIs in buying property in India?
Ans – Prime Wealth offers expert guidance in navigating the property market, ensuring legal compliance, managing taxes, and assisting with financing options for NRIs.
Disclaimer: The information provided here is for educational and informational purposes only and should not be construed as financial, legal, or tax advice. Consult with a qualified professional before making any investment decisions. We do not accept any liability for errors or omissions in this information nor any direct, indirect, or consequential losses arising from its use.
