The corona virus pandemic has not been so good on us. However, the flip side is that in India a section of people have turned their attention towards the real estate market. Why not? The pandemic and its aftermath has forced several industries and business organisations to wind up and down their shutters. Against the backdrop of this, several potential clients in India and overseas, especially the Non Residential Indians (NRIs) have turned their attention to purchasing and owning a property in India. NRI guide to buying property in India has off late become one of the most talked about subjects. Real estate experts echo the sentiments that ‘now is the time to purchase a property in India’.
Individual or agency offering NRI property management services can help in making the purchase
One of the best ways that an NRI can purchase a property in India is to take the help of an agency who is providing NRI property management services. The agency is sure to guide the individual who is interested in purchasing a property in India.
However, if you are an NRI buying property in India, read on as the piece of information is sure to help you.
Role of the Reserve Bank of India (RBI)
As a Non Residential Indian (NRI), you can purchase and own assets in India sans special and additional permission from the Reserve Bank of India (RBI). This is in accordance with the Foreign Exchange Management Act also known as FEMA. The NRI guide to buying property in India clearly states that the RBI need not be involved in any stage of the purchase deal or the transaction if the NRI is purchasing commercial or residential properties in India. The NRI buying property process is simplified so much so that the NRI who is actually purchasing the property in India, is not required to be physically present in the country to execute the property deal. The NRI making the purchase can transfer the Power of Attorney (POA), who will execute the deal on behalf of the NRI.
Furthermore, it is to be noted that in accordance with the NRI guide to buying property in India, an NRI is restricted from purchasing and owning land or property that falls in the category or sub-category of agricultural land, farmhouse and plantations. However, if an NRI wishes to own a property or asset that falls in the above mentioned categories, an individual or an agency that offers NRI property management services can lend a helping hand. Under the circumstances, the RBI will be involved and a special request expressing the desire to purchase the property or asset will be made. This will be followed with the RBI taking note of all the circumstances.
Documents required for NRI to buy property in India
When you do a search about NRI guide to buying property in India, you will come across the list of documents that are necessary to purchase a property in India. It is to be noted that according to the law, it is but not mandatory for an NRI to have an Aadhaar Card to make the property purchase. Yes. You read it right. An NRI buying property can do so without an Aadhar Card. However, other documents like PAN card, Indian passport or Overseas Citizen of India Card (OCI) and Power of Attorney Certificate (POA) are required.
NRI buying property in India is eligible to apply for a loan to make the purchase
Did you know that an NRI can apply for a loan and purchase a property in India? A home loan is the gateway for funds for an NRI buying property. If the person making the property purchase decides to take advantage of a home loan, the RBI prescribed criteria must be fulfilled. Furthermore, banks and financial institutions that are registered with the National Housing Board, are permitted to sanction a home loan to an NRI buying property in India. According to the guidelines, the respective bank or the financial institution that is sanctioning the loan, is not allowed to credit the loan sanctioned amount into the bank account of the NRI who is making the purchase. Instead, Non-Residential External account (NRE), Non-Residential Ordinary (NRO) account or Foreign Currency Non-Residential (FCNR) accounts must be used to execute the transaction. Furthermore, in accordance to the law, the loan transaction must necessarily be carried out in Indian currency per se. However, as far as NRI property investment in India is concerned there is no limit or restriction on the number of properties that an NRI can purchase and own in India. This rule applies to both commercial and residential properties.