Top Things NRIs Must Know About Investing In Real Estate
- December 21, 2023
- Buying Guide, Expert Talks, Property, property for sale, Real Estate
- falt for sale in bangalore, Indian real estate market, Investing In Real Estate, NRI, real estate market, Space for sale in Bangalore
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An Indian national who has been away from India for more than 180 days in a year is considered to be an NRI as per the Indian government. The total NRI population is estimated to be 2.84 crore. Out of these, a little less than ten percent – 2.36 lakh are dollar millionaires. The average wealth held by a millionaire NRI is around $ 3.83 million.
Presently, India’s real estate market comprises residential, commercial, retail and hospitality sub categories. Real estate has always been a preferred investment destination for NRIs. Traditionally, sales propelled by NRIs have contributed around 8% to 10% of annual property sales in India. During the first eight months of FY 2018-19 itself, the total value of investments by NRIs had exceeded $ 10 billion.
NRIs should now consider investing in the Indian real estate market because it is one of the fastest-growing economies, especially with one of the best tax policies and a wide range of properties to choose from
There is considerable optimism among long-distance buyers following the passage of the Real Estate Regulation Act (RERA), which creates a robust grievance redressal system that protects the interests of buyers. Building companies will now be held responsible for delays, misleading advertisements, and substandard construction quality, among other things.
The RERA is a godsend for NRI investors who cannot monitor their investments in India. It is a major problem in the real estate industry when projects are delayed. This is often because funds collected from one project are diverted to another, or sometimes for unrelated purposes. The RERA requires builders to keep 70% of the funds collected in an escrow account for each project. When construction of the project progresses, funds are released from the escrow account, preventing monetary misuse
Few golden words:
“An NRI or person of Indian origin (PIO), as defined in FEMA, can acquire by way of purchase, any immovable property in India, other than agricultural land/plantation property/farm house. This is under a general permission that has been given by the government of India. However, no person being a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal or Bhutan, shall acquire or transfer immovable property in India, other than lease, not exceeding five years, without prior permission of the Reserve Bank,” explains Amarjit Bakshi, managing director, Central Park.
Checklist for NRIs before investing in real estate
Acknowledging the advent of the digital era, here it is renowned to make things easier, quicker, and remote, suiting the current times for the NRIs who are interested in buying properties. In addition to having painted a very promising picture for the industry, they have given a big push to all NRI buyers. As a real-estate advisor they have laid down a few points for every NRI to go through before they invest in real estate
- Types of properties to invest in
NRIs can purchase any number of properties, both residential and commercial. Only agricultural land, farmhouse, and plantation property are out of bounds unless it has been gifted or inherited by them.
- Home Loans are a deal right now!
If you intend to buy a house with a loan, this is a good time as the interest rates on home loans are at decadal lows right now, with some banks offering credit at 6.5%. NRIs can avail of a bank loan of up to 80% of the property value, though the paperwork can be quite tedious.
- Tax treatment of the gains
NRIs are liable to pay tax on the number of capital gains arising in India. Immovable property held for more than 24 months is treated as a long-term capital asset and gets the indexation benefit with taxation at 20%. Income-Tax Act too, allows certain tax deductions under Section 80C to 80TTA, and NRIs can use this to reduce their tax burden.
- Payment rules
NRIs can transfer the money to his or her NRO account in India and pay the seller from there or can also directly transfer the amount to the account of the seller in India.
- Making transactions easy
An NRI investing in India needs to have a checklist of things which should include property verification, a list of all documents, KYC, payment plan, tax implication legalities, and other local formalities, and someone trustworthy to help facilitate the entire process so that it is smooth and efficient.
- Types of properties to invest in
If an NRI opts for an under-construction property, they may have to give a power of attorney to a trusted associate, for completing the deal. Hiring a lawyer to prepare the document is also crucial, to ensure that there is no forgery and the investment is secure.
Many Agencies have helped expat buyers watch and learn about various affordable property options without having to travel overseas for making informed decisions. Talking along the same lines and mentioning how it is a great time for NRIs to invest in this market, and “With stock markets showing signs of fatigue, and deposit rates falling below 6-7%, NRI investors should focus on real estate. Few agencies have adopted technology as our medium of servicing. With vetted industry experts, we yield unbiased advice and solutions to our clients focusing that our assets are delivered at a reasonable rate”.
Through the portal, best team has been able to effectively deliver all of their services from real estate advisory, virtual consultations, virtual tours, retail advisory, to asset management services and address all client queries in time. They have organised over 2000 virtual consultations and have catered to their wide base of clients in over five cities amidst the pandemic outbreak.
As India blazes along to become the fifth largest economy in the world in 2023, NRIs can be expected to bump up their investments in residential real estate to get a piece of this action.