Why NRIs Should Invest in Indian Real Estate

September 10, 2023

Table of Contents

India is a land of opportunities for NRIs who want to invest in real estate. The country offers a booming economy, a rich culture, and a favourable environment for property buyers. In this blog post, we will explore the benefits of investing in Indian real estate, the factors that make it an attractive destination, and the best practices for NRIs to follow.
Benefits of Investing in Indian Real Estate

Investing in real estate can be a rewarding decision, especially for NRIs who want to establish roots or diversify their portfolio in India. Some of the benefits of investing in Indian real estate are:

  • High returns : Indian real estate market has witnessed significant appreciation in property values across major cities, making it a lucrative option for NRIs. India ranks among the top 10 most profitable real estate markets in the world.
  • Emotional connection : Many NRIs have an emotional attachment to their homeland and want to own a property there. Investing in Indian real estate can help them fulfil their dream of having a home in India and also provide them with a sense of security and belonging.
  • Tax benefits : NRIs can enjoy various tax benefits on their income from Indian real estate, such as deduction of interest on home loan, exemption from capital gains tax on sale of property, and deduction of rental income from taxable income. NRIs can also avail the benefits of double taxation avoidance agreement (DTAA) between India and their country of residence.
  • Easy financing : NRIs can easily avail home loans from Indian banks and financial institutions to buy property in India. The Reserve Bank of India (RBI) allows NRIs to borrow up to 80% of the value of the property, subject to certain conditions. The interest rates on home loans are also competitive and affordable for NRIs.
Factors Driving the Growth of Indian Real Estate Market

The Indian real estate market has been growing steadily and has overcome the temporary slowdown due to the pandemic. The market is driven by several factors, such as:

  • Urbanisation : India is witnessing rapid urbanisation, with more people migrating from rural areas to urban centres for better opportunities and lifestyle. This has increased the demand for housing and infrastructure in urban areas, creating a huge potential for real estate development.
  • Infrastructure development : The government has been investing heavily in improving the infrastructure of the country, such as roads, railways, airports, ports, power, water, sanitation, etc. This has enhanced the connectivity and accessibility of various regions, making them more attractive for real estate investment.
  • Government policies : The government has introduced several policies and reforms to boost the real estate sector, such as the Goods and Services Tax (GST) rate cut, the Real Estate (Regulation and Development) Act (RERA), the Pradhan Mantri Awas Yojana (PMAY), the Affordable Rental Housing Complexes (ARHC) scheme, and other tax incentives for affordable and mid-range housing. These policies have increased the transparency, accountability, affordability, and quality of the real estate sector, benefiting both buyers and developers.
  • Demographics : India has a large and young population, with a median age of 28 years. This means that there is a huge demand for housing from the first-time buyers and millennials who aspire to own a home. Moreover, India has a large diaspora of NRIs who have high disposable income and savings, making them potential investors in Indian real estate.
Best Practices for NRIs to Invest in Indian Real Estate

NRIs who want to invest in Indian real estate should follow some best practices to ensure a smooth and hassle-free process. Some of these best practices are:

  • Do your research : Before investing in any property, NRIs should do thorough research on the location, developer, project, amenities, price, legal status, market trends, etc. They should also compare different options and evaluate their suitability based on their budget, preferences, and goals.
  • Hire a professional : NRIs should hire a professional real estate agent or consultant who can guide them through the entire process of buying property in India. A professional can help them find the best deals, negotiate with the developers, arrange site visits, handle documentation, facilitate home loans, etc.
  • Use technology : NRIs can leverage technology to make their home buying journey easier and faster. They can use online platforms like SmartNeev that offer end-to-end services for real estate buyers. SmartNeev provides access to thousands of properties across India and abroad, along with data analytics and VR tools to help buyers make informed decisions. SmartNeev also offers ancillary services like mortgages, rentals, interiors, and property management.
  • Follow the rules : NRIs should follow the rules and regulations laid down by the RBI and the government for buying property in India. They should ensure that they have a valid passport, PAN card, OCI/PIO card (if applicable), and other documents required for buying property. They should also comply with the tax laws and foreign exchange regulations of both India and their country of residence.
Investing in Indian real estate can be a profitable option for NRIs who want to take advantage of the growing economy, favorable environment, and emotional connection of India. However, NRIs should also be aware of the challenges and risks involved in buying property in India and follow the best practices to ensure a successful investment. By using online platforms like SmartNeev, NRIs can make their home buying journey hassle-free and convenient.
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