What NRIs Need to Know About Buying a Home in India

September 18, 2023

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Are you a Non-Resident Indian (NRI) or a Person of Indian Origin (PIO) who dreams of owning a home in India? If so, you might be wondering how to go about buying a property in your motherland. What are the rules and regulations for NRIs buying property in India? What are the types of properties you can buy? What are the documents and procedures involved? How can you finance your purchase and save money on international payments?

In this blog post, we will answer all these questions and more, to help you make an informed decision about buying a home in India. Whether you want to invest in real estate, buy a vacation home, or return to India someday, this guide will provide you with all the information you need.
Types of Properties NRIs Can Buy in India
As an NRI or PIO, you have the freedom to buy most types of immovable properties in India, such as residential and commercial properties. You do not need any special permission from the Reserve Bank of India (RBI) or the government to purchase these properties, as long as you follow the Foreign Exchange Management Act (FEMA) rules1.

The only exception is that you cannot buy agricultural land, farmhouses, or plantation properties in India. These types of properties are reserved for Indian citizens only. You can only own such properties if you inherit them from your relatives or if you get approval from the RBI and the government on a case-by-case basis1.

If you already own a property in India before becoming an NRI, you can continue holding it even if it is agricultural land, farmhouse, or plantation property. You can also rent out your property to earn income from it, as long as you pay the applicable taxes in India.
Documents Required for NRIs to Buy Property in India

The documents required for NRIs to buy property in India are similar to those required for residents. Here is a list of the common documents you will need:

  • Passport: You will need your passport as proof of identity and nationality. If you hold a non-Indian passport, you will also need proof that you are an NRI or PIO, such as an Overseas Citizen of India (OCI) card or a Person of Indian Origin (PIO) card.
  • PAN Card: You will need your Permanent Account Number (PAN) card as proof of your tax status and identity in India. If you do not have a PAN card, you can apply for one online through the Income Tax Department website.
  • Address Proof: You will need a document that shows your current address, such as a utility bill, bank statement, or rent agreement.
  • Property Documents: You will need the documents related to the property you want to buy, such as the title deed, sale agreement, no objection certificate (NOC), encumbrance certificate, etc. These documents will vary depending on the type and location of the property.
  • Bank Statements: You will need your bank statements for the last six months to show your financial capacity and source of funds for buying the property.
  • Photographs: You will need two passport-sized photographs of yourself and your co-applicants (if any).
Procedure for NRIs to Buy Property in India
The procedure for NRIs to buy property in India is similar to that for residents. Here are the basic steps you will have to follow:
  • Engage a local solicitor and notary: It is advisable to hire a local solicitor and notary who can help you with the legal aspects of buying a property in India. They can conduct due diligence checks on the property, draft and verify the sale agreement and deed, register the property in your name, and handle any disputes or issues that may arise.
  • Find a realtor in the location you want to buy: A realtor can help you find a suitable property that meets your requirements and budget. They can also negotiate with the seller on your behalf and facilitate the transaction process.
  • Arrange power of attorney if you are not in India for the purchase: If you are not physically present in India for buying the property, you will need to appoint a representative who can act on your behalf. This can be done by giving them a power of attorney (POA), which is a legal document that authorizes them to sign documents and make decisions for you. You can give a POA to anyone you trust, such as a relative, friend, or solicitor. The POA must be attested by an Indian consulate or embassy in your country of residence.
  • Find a property and agree on a sale price: Once you find a property that suits your needs, you can make an offer to the seller and negotiate the sale price. You should also inspect the property thoroughly and verify its legal status and ownership history.
  • Sign the sale agreement and pay the booking amount: After agreeing on the sale price, you will have to sign a sale agreement with the seller, which is a contract that outlines the terms and conditions of the sale. You will also have to pay a booking amount, which is usually 10% to 20% of the sale price, as a token of your commitment. The sale agreement must be stamped and registered with the sub-registrar’s office within the jurisdiction of the property.
  • Apply for a home loan if needed: If you need to finance your property purchase, you can apply for a home loan from an Indian bank or a financial institution. You will have to submit your income proof, credit history, property documents, and other details to get approval. You can also avail of tax benefits on your home loan interest and principal repayments under the Income Tax Act.
  • Sign the sale deed and pay the remaining amount: Once your home loan is approved, you will have to sign the sale deed with the seller, which is the final document that transfers the ownership of the property to you. You will also have to pay the remaining amount of the sale price, along with the stamp duty and registration charges, which are usually 5% to 10% of the property value.
  • Register the property in your name: The last step is to register the property in your name with the sub-registrar’s office within the jurisdiction of the property. You will have to present the original sale deed, along with your identity proof, address proof, photographs, and POA (if applicable). The registration process will take a few days and you will receive a copy of the registered sale deed as proof of ownership.
Buying a home in India can be a rewarding experience for NRIs who want to reconnect with their roots or invest in a growing economy. However, it can also be a complex and daunting process that requires careful planning and research.

We hope this blog post has given you some useful information and tips on how to buy property in India as an NRI. If you have any questions or comments, please feel free to share them below. And if you are unsure of where to buy the property, check out our homematch making feature to find your dream home based on your preferences and lifestyle.

Happy home buying!
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