The RBI now allows NRIs to buy agricultural property, plantation land, or a home. However, there are no restrictions on an NRI purchasing a home or business property.
In several Indian states, a registered form of a Power of Attorney (PoA) is required to conduct immovable property-related transactions.
Buying real estate property in India used to be a time-consuming process. It is now a smooth procedure thanks to particular law reforms throughout the years. A Non-Resident Indian (NRI) is a person who has lived outside of India for more than 182 days, according to the Foreign Exchange Management Act (FEMA). The Reserve Bank of India (RBI) oversees transactions such as buying real estate properties in India for NRIs. They are governed under the 1999 FEMA.
Following a comprehensive evaluation of the grounds, the RBI now allows NRIs to acquire agricultural property, plantation land, or a farmhouse case-by-case basis. However, there are no restrictions on an NRI purchasing a home or business property.
Purchase and Inheritance
* It is possible to acquire immovable property in India by a gift from a resident of India, another NRI, or an Overseas Citizen of India (OCI) who is a relative as defined by the Companies Act, 2013.
* An NRI can inherit immovable property in India from either a person residing outside India (who acquired it per the terms of the foreign exchange legislation) or someone living in India.
* A non-NRI or OCI resident outside India may buy one immovable property (other than agricultural land/farmhouse/plantation property) jointly with his/her NRI spouse, provided that the consideration for the transfer is made from:
a. money received in India via banking systems as an inbound transfer from somewhere outside India or
b. monies kept in any non-resident account managed in line with FEMA rules and RBI regulations.
* No payment for any transfer of immovable property will be made by traveller's cheques, foreign currency notes, or any other manner other than those expressly approved by this section, provided that:
a. marriage having been registered for at least two years before the acquisition of such property, and
b. that the non-resident spouse is not otherwise barred from making such a purchase.
* To purchase immovable property in India, the transaction must be completed in Indian currency using an NRI account at an authorised Indian bank. The NRI must hold a Non-Resident Ordinary Account (NRO), Non-Resident External Account (NRE), or Foreign Currency Non-Resident Account (FCNR) (FCNR).
* The RBI permits NRIs to get house loans to purchase property in India. NRIs can pay the EMIs in one of many ways:
a. By transferring funds from your overseas bank account using standard banking methods.
b. Through the use of post-dated checks or Electronic Clearance Service (ECS) from your NRE, NRO, or FCNR account, as well as rental revenue.
Durable Power of Attorney
In several Indian states, a registered form of a Power of Attorney (PoA) is required to conduct immovable property-related transactions. PoA is a legal instrument that allows an NRI to authorise another person to attend the registration/execution of paperwork about the purchase/sale of a property on their behalf.
It is advised that an adult Indian National be granted a Special or Specific Power of Attorney so that they may fulfil intended formalities on behalf of the NRI while not present.
Currently under development properties.
To be eligible for the transaction, a property under construction should preferably be part of a project registered with the Real Estate Regulatory Authority. Furthermore, ensuring that these projects are pre-approved for funding by national banks means that the necessary due diligence on the project and construction business has already been completed.
To summarise, for any transaction, an NRI should check and verify the title of a property with the assistance of a real estate attorney and title investigator. The acquisition/inheritance of a real estate property in India may be easy if the correct protocol is followed.