Non-Resident Indians (NRIs), under RBI guidelines, can purchase certain kinds of properties, though other forms may require special permissions. Thus every NRI, interested in buying property in India, must be aware of the provisions related to purchase or ownership of immovable property in India under Foreign Exchange Management Act (FEMA). Persons of Indian Origin (PIOs) and NRIs are always treated the same when it comes to investing in real estate.
The Reserve Bank of India (RBI) has given general permission to NRIs for any residential or commercial property in India. They do not need to seek any special permission from RBI or send any intimation in this regard. NRIs can purchase any number of commercial or residential properties in India. The income tax laws also favour NRIs. In case the NRI is not able to come to India, he/she has the power to give anyone power of attorney who will execute the deal likewise.
However, the RBI does not allow NRIs to purchase agricultural land or plantation property in India. Under existing regulations, NRIs can’t also purchase farmhouses in India. To purchase farmhouses, the NRI has to take special permission, which will be considered on a case-to-case basis. It is possible for an NRI to purchase property jointly with another NRI. However, any person not authorised to invest in property in India or a resident Indian, cannot become a joint holder irrespective of his/her contribution towards the purchase.
If a person who owns a property in India becomes an NRI, he can continue holding the property in his name in India. Interestingly, an NRI will be allowed to hold agricultural land, farmhouse and plantation property if he purchased them before becoming an NRI. He can also let out the property without considering the fact when it was acquired. It is possible to remit the rent received from such properties after appropriate Indian taxes have been paid on such rent. NRIs can also gift or sell any immovable property to a person residing in India.
The NRI can even gift or transfer any property to any NRI, provided it’s not a farmhouse, plantation property or agricultural property.
Non Resident Indians (NRIs) can avail home loans for the purchase of flats, bungalows and villas in India. They need copies of valid passport, statements of non-resident external (NRE) or non-resident ordinary (NRO) accounts, salary certificate, last six months bank account statement/passbook, work experience certificate and a valid job contract or work permit. A person must be employed for at least two years. Businessmen and self-employed individuals need to show proof of income.
If an NRI is availing a home loan, he/she needs to attest the salary certificate from the embassy in case the salary is not credited to a bank. The person must also provide a local address proof and provide power of attorney (PoA) to someone in India. Details of permanent address in India are also necessary. A completed home loan application form is a must and the English translation of the contract must be duly attested by consulate, employer, embassy or the Indian bank’s foreign branch, in case the contract is in some other language.
Other documents that the NRI would need to purchase property in India are agreement for sale/sale deed, copy of approvals for proposed construction, purchase or extension/approved building plans and a no objection certificate (NOC). For purchase or construction of house, the documents he would require are non-encumbrance certificate on the property (for 13 years), original title deed, land tax receipt and possession certificate. In case, the NRI wants to authorise a third party to avail loan instalments, complete mortgage formalities and execute documents, a notarised power of attorney is a must.
The documents required can be divided under headings such as Personal Details Documents, Financial Details Documents for Salaried Individuals, Financial Details Documents for Self Employed Individuals and NRI Personal Guarantor documents. Different banks have different formats for the same. Here we have mentioned them in bullet points of your ease.
NRI Personal Guarantor Documents
- NRI Guarantor’s passport and visa copies
- Income documents of guarantor
- Current overseas address verification proof, such as, driving license, bank statement, utility bill, latest insurance premium receipt showcasing overseas address
- Rapid increase in start-ups
- Medical Tourism
Financial Details Documents for Self Employed Individuals
- Copy of incorporation of business
- Copy of income proof
- Middle East: Last 2 years audited/C.A certified P&L accounts
- US & Canada: Last 2 years CPA compiled/reviewed/audited P&L accounts
- Others: Last 2 years C.A. or equivalent certified/audited P&L accounts
- Copy of business profile and office address proof
- Copy of last six months’ bank statements in company’s name & individual’s name
- MOA & AOA of the company for private limited companies
- Partnership deed for partnership firm
Financial Details Documents for Salaried Individuals
- Copy of salary certificate mentioning the current salary earned, designation and date of joining or copy of current appointment letter
- Copy of previous appointment letters
- Last four months’ salary slips in case of variable salary, or last three months’ salary slip in case of fixed salary
- Six months bank statement clearly indicating credited salaries
Certain other details may also be asked for such as copy of PAN Card for the first applicant OR Form 60, Cheque/Draft in INR for fees with date in dd/mm/yyyy format, valid visa copies for all applicants and one passport size latest photograph of each applicant (includes co-applicant) with signature across.
No matter where in the world you might reside, Pavani Group is here to help you find your dream home in India, any time and every time. We understand the requirements of our NRI clients and provide real estate solutions which fit their needs. We are here to provide our NRI customers an easy and fulfilling home buying experience which will last a lifetime.
We have a focused dedicated sales team which offers real estate solutions to our prestigious NRI clients.
The team reaches out to NRIs in various regions by way of digital materials, brochures, video tours, Virtual reality walkthroughs and fulfils sales through our dedicated project sales team.