5 tips for NRIs investing in Indian real estate
Even though Indian real estate is facing turbulence lately, there is a rise in NRI investment in our country. According to recent research, USD 80 billion from the inward remittance into India last year, more than USD 13 billion was in the real estate property sector.
Factors such as uncertainty in other investment options and the falling Rupee have made sure that property investment in India is a lucrative and safe option for NRIs. Even though there are no specific restrictions, it is essential that before venturing into real estate investment, one understands some basic rules of Indian real estate.
1. Do a thorough research
A lot of areas become prominent due to urbanization and quick development all over the country. Since many IT organizations set up their businesses here, the IT hubs have become important and are sought-after. Localities like these are experiencing a value appreciation and gaining popularity. This makes them the apt property investment spot for NRIs. One needs to do thorough research and select the location that suits them the best. Keep in mind to check the locality and neighborhood before investing in real estate.
2. Availability of loans
Many banks in India are more than willing to offer funding options for NRIs through the housing loan section. This requires paying in India Rupees and for the NRIs to open an NRO/NRE account. For this, their CIBIL score needs to be up to the mark. NRIs need an Indian resident as a co-applicant to avail of home loans from banks in India. It is mandatory to issue a power attorney as well.
3. Know about the tax implications
To avoid taxes related to capital gains, NRIs need to purchase and hold on to a property for three years before selling it. For the interest amount on a home loan, NRIs can claim an income tax deduction. There are differences in tax for leased-out properties and self-occupied ones. All of these details should be studied carefully before making a property investment.
4. Use RERA
As the Real Estate Regulation and Development Act (RERA) is in place, real estate buyers are protected from all the offenses and misdeeds of builders. When NRIs invest in RERA-registered properties, they can rest assured that the real estate property will be as they had booked it.
5. Being aware of government policies
Due to the new government policies and regulations, the real estate sector in India is a victim of frequent changes. Rich dividends are paid to have a good understanding of the policies with zoning areas, leasehold, and freehold while investing in real estate properties in India.
India is a natural choice for NRIs as it is regarded to have a fast-growing economy and real estate market which has the capacity to withstand recession on the global level. Also, the laws and regulations in India are a lot more lenient than in other countries. Due to all this, NRIs think of India as the best place for property investment.
Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. PropertyPistol does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.
