7 tips for the first-time NRI investors in Indian market

January 2016

The past few years have seen a steep rise in the India Real Estate. The sudden surge of positivity has thrown the floodgates open for the investor. In the last decade or so the overseas investment in the Indian property market has increased considerably. Now that NRIs are looking at India as an investment destination, there are certain regulations they are subjected to which they have to consider before investing. Let's throw some light on the rule and regulations for NRIs to invest in the Indian Realty market.

1. Investing in Indian real estate - NRIs and OCBs can invest but it has to be in full adherences with Indian law. Reserve Bank of India has listed out the rules and regulation and there are also other regulations by Foreign Investment Promotion Board (FIPB). NRIs can make up to 100% investment, and the lock-in period for real estate investments is 3 years.

2. Housing finance for buying a house/flat for residential purpose from financial institutions - RBI permits some of the financial institutions to provide housing loans to the NRIs for the acquisition of houses/flats for self-occupation subject to certain conditions.

3.Permission of Reserve Bank to purchase immovable property in India for their residential use - RBI has granted a general permission to the NRIs to purchase immovable property in India for a bona fide residential purpose. Therefore, no special permission is required for the NRIs before investing.

4. Permission to sell the property - RBI allows the sale of property. However, if the property is sold to another NRI the funds towards the purchase consideration have to be remitted to India or paid out of balance in NRE/FCNR accounts.

5.  The power of Attorney - While purchasing real estate most developers demand a Power of Attorney in their favor. The investor has the privilege on of not granting the Power of Attorney (POA) to the developer. In that case, it is mandatory to mail all the documents to the foreign address of the investor which can cause delay in the procedure.

6. Limitations of home loan - NRI investors can get a home loan up to 85% of Total Consideration Value.

7. Lease/Rent of the property - Reserve Bank has granted general permission for letting out any immovable property in India. The rental income can be deposited in non-resident ordinary (NRO) or non-resident external (NRE)  account and are eligible for repatriation. Hiranandani Park Thane on Ghodbunder Road is an avenue of premium living. Studded with ultra-luxury amenities and specifications, these homes promise a lifestyle par excellence. Also, these home offer plenty of investment opportunity for the Indian as well as NRI investors.