Buyers Guide

Investing in real estate is an exciting proposition. However, homebuyers need to complete several steps in order to get the best of the deal. Home buying doesn't have to be overwhelming. Educate yourself on types of home, financing options, and overall costs to help you make a smart financial decision.

NRI Corner

NRI Corner

The Reserve Bank of India (RBI) permits NRIs and PIOs to acquire immovable property in India other than agricultural property, plantation or a farmhouse. They can use funds received in India through normal banking channels by way of inward remittance from outside the country to pay the purchase consideration.

Permission for purchase of residential property / commercial property
  • NRIs holding Indian passports – Permission not required.
  • NRIs holding foreign passports – RBI to be intimated(Form IPI –7) within 90 days of purchase of property or final payment of consideration.
  • Funds to be remitted through NRE/NRO accounts.
Sale of property

NRIs can sell properties they hold in India. RBI permission not required.

Repatriation of sale proceeds
  • Repatriation of sale proceeds of residential property purchased on or after 26th May 1993 is permitted.
  • The RBI will consider repatriation of the sale proceeds in foreign exchange up to the amount paid for the acquisition of 2 properties. The sale has to take place after 3 years from the date of final purchase deed or from the date of final payment.
  • Application for repatriation (IPI – 8) has to be made within 90 days of the sale of the property
Income from property

NRIs can let out immovable property in India. The rental income has to be credited to an NRO account.

Home loan guidelines

The home loan amount should not exceed 85% of the cost of the dwelling unit; the remaining 15% needs to be own contribution towards the cost of unit financed.

The own contribution of 15% toward cost of the dwelling unit can be paid by direct overseas remittance/s through normal banking channels, or from Non-Resident (External) Account (NRE account) and /or Non-Resident (Ordinary) Account (NRO account) in India.

Repayment of the loan, comprising of the principal and interest including all the charges are to be remitted to the housing finance company from abroad through normal banking channels, the Non-Resident (External) Account (NRE account) and/or Non-Resident (Ordinary) Account (NRO account) in India. The loan repayment has to be done in accordance with the provisions of the Foreign Exchange Management Act, 1999, and the regulations made by the RBI from time to time.

The documents needed for obtaining NRI home loans are Bank specific. General list of documents are as mentioned below:

  • Passport and Visa
  • A copy of the appointment letter and contract from the company employing the applicant.
  • The labour card/identity card (translated in English and countersigned by the consulate) if the person is employed in the Middle East Salary certificate (in English) specifying name, date of joining, designation and salary details.
  • Bank Statements for the last six months.
  • List of Classified documents for Salaried and Self Employed NRI Applicants. Banks may have specific requirements apart from the below listed documents.
Salaried NRI Applicants
  • Copy of valid passport showing VISA stamps.
  • Copy of valid visa / work permit / equivalent document supporting the NRI status of the proposed account holder.
  • Overseas Bank A/C for the last 3 months showing salary credits.
  • Latest contract copy evidencing Salary / Salary Certificate / Wage Slips.
Self-Employed NRI Applicants
  • Passport copy with valid visa stamp.
  • Brief profile of the applicant and business/ Trade license or equivalent document.
  • 6 months overseas bank account statement and NRE/ NRO account.
  • Computation of income, P&L account and B/Sheet for last 3 years certified by the C.A. / CPA or any other relevant authority as the case may be (or equivalent company accounts).
Disclaimer:

These are the broad guidelines meant for ready reference with respect to acquisition and transfer of immovable property in India by NRI/PIO/OCI and in each case prospective buyer or seller of property in India must consult his/her own legal/finance/tax advisor and obtain suitable advise for their specific transaction. Narang Realty assumes no responsibility or legal liability for transactions entered into by placing reliance on these guidelines. Further, Narang Realty assumes no responsibility for updating these Guidelines.

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DISCLAIMER:

"Narang Realty Private Limited ("Narang Realty"), a company owned and controlled by Gopal Narang and his family (the "Narangs"), is engaged in real estate development. The Narangs also hold 50% of the capital of Windsor Realty Private Limited ("WRPL") which is separately executing its own real estate projects. The business of WRPL is entirely independent and distinct from the business of Narang Realty."