This area will go over many aspects you the seller should be prepared for. Remember this area is to provoke thought. We will be able to answer and assist in the more advanced situations a seller might face.
General Information
General Information Regarding Real Estate
NRIs and PIOs may acquire any immovable property for residential/commercial purposes in India, other than agricultural/plantation/farm house, without the permission of Reserve Bank of India.
No declaration is required to be made to the RBI. Only information regarding details of the property and costs incurred should be given to the RBI. This will help at the time of repatriation
No permission from the RBI is required to transfer any immovable property other than the agricultural land or plantation property or a farm house in India by way of sale to a person resident in India.
The lock-in period of 3 years has been done away with.
If property has been acquired through NRE account then repatriation is allowed only for 2 residential properties
NRI/PIO is permitted to transfer by way of mortgage his residential commercial property in India to an authorized dealer/housing finance institution in India.
NRI/PIO can avail housing loan in rupees from an authorized dealer or housing finance institution in India approved by the National Housing Finance Bank for purchase of residential accommodation or for the purpose of repairs/renovation/improvement of residential accommodation, subject to certain terms and conditions.
Sale proceeds of residential/commercial property received by way of gift by NRI/PIO can only be credited to NRO account.
Sale proceeds of any immovable property in India inherited, by a person resident outside India (i.e. NRI or PIO or foreign national of non-Indian origin resident outside India), from a person resident outside India cannot be repatriated by him or his successor without prior permission of the RBI.
NRI/PIO can rent out the residential/commercial property purchased out of foreign exchange/rupee funds.
The purchase consideration should be met either out of inward remittances in foreign exchange through normal banking channels or out of funds from NRE/FCNR accounts maintained with banks in India.
The non-resident Indians who are staying abroad may enter into an agreement through their relatives and/or by executing the Power of Attorney in their favour as it is not possible for them to be present for completing the formalities of purchase (negotiating with the builder or Developer, drafting and signing of agreements, taking possession, etc.) These formalities can be completed through some known person who can be given the Power of Attorney for this purpose. Power of Attorney should be executed on the stamp paper before the proper authorities in foreign countries. Power of Attorney cannot be drafted on the stamp paper bought in India.
Residential property can be given on rent if not required for immediate residential use. Rental income cannot be remitted abroad and will have to be credited to the ordinary non-resident rupee account of the owner of the property.
NRI/PIO can avail housing loan in rupees from an authorized dealer or housing finance institution in India approved by the National Housing Finance Bank for purchase of residential accommodation or for the purpose of repairs/renovation/improvement of residential accommodation, subject to certain terms and conditions.
Sale proceeds of residential/commercial property received by way of gift by NRI/PIO can only be credited to NRO account.
Sale proceeds of any immovable property in India inherited, by a person resident outside India (i.e. NRI or PIO or foreign national of non-Indian origin resident outside India), from a person resident outside India cannot be repatriated by him or his successor without prior permission of the RBI.
NRI/PIO can rent out the residential/commercial property purchased out of foreign exchange/rupee funds.
Turnkey Services
Turnkey Services for NRI Buyers
We Provide the Following Turnkey Services for NRI's who would like to Invest/ buy a property in Chennai.
While you are overseas:
Determining your budgets, requirement and suitable location. (Keeping in mind if you are coming back in a few years).
Expert help and advising in identifying the appropriate location.
Understanding your budgets and getting you pre-approved through Foreign Banks/HFC's Like Standard Chartered, HSBC, Citibank, ABN AMRO, ICICI and HDFC or as per your choice of bank...
When you come back to Chennai:
Meeting you in person and setting up previews and give you information as required.
Disbursement of Loans as approved.
Assistance in Legal Paper work and advising on all issues pertaining to Repatriation, Taxation, Stamp Duty and Registration.
Leasing of the Property as required to Multinational Companies and ensuring returns over the investments.
Keeping you update of the market developments in Chennai from time to time through our interactive website.
Investment
Investment
Why should NRI's invest in Indian real estate?
India being the fifth largest economy in the world (ranking above France, UK and Russia) is a potential Market. It is also the second largest among emerging nations (These indicators are based on purchasing power parity). The estimated size of organized Indian real estate sector accounts for USD 12 billion of India's USD 600 billion economies (2%) way less then other mature economies. Relaxation of foreign direct investment rules has expanded the mountain of capital in every sector of Indian economy. The government is making efforts in liberalizing the guidelines and norms for investment through FDI, making them more NRI friendly. Growth in the Indian real estate sector was estimated 30% last year, owing to FDI norms and related growth drivers. By 2010, real estate sector estimated to be between USD 45-50 billion (Source: DSP Merrill Lynch, May 30, 2005). Real estate sector has the potential to touch USD 90 billion in 10 years. An estimate of 5 million homes was sold last year, while 30 million more homes are expected to be sold in the next five years. The trend of owning exclusive properties like beach houses, homes in the hills, near religious centers etc is fast catching on as second home Option.
Residential (Housing): - The cost of mortgage rates came down from 18% to 8% in the last 5 years.
Commercial (Office Space): - IT space leasing continues to boom with 12 million sq. ft. leasing in Bangalore, 6 million sq. ft. in Mumbai and 7.7 million sq. ft. in NCR (National Capital Region) in this year till date.
Retail (Shopping): - Organized retail, which accounts for just 2 % of the USD 200 billion sector, is expected to grow from USD 4 billion to USD 15 billion by 2010.
Hospitality (Hotels):
Domestic and International operators are planning to invest in 3-4 star category hotels. India requires another 75,000 to 1, 00,000 rooms in the next 5 years.
How can an NRI invest?
Buying immovable property - Any Indian citizen who's a resident outside India does not require any permission from the Reserve Bank of India for purchasing an immovable property, residential or commercial. Incase of NRIs holding foreign passport (Person of Indian Origin), the filing of relevant documents and declarations has to be done with the Reserve Bank of India.
Renting of immovable property - An NRI can earn by renting out his/her property in India. However, the proceeds out of this lease are taxable.
Foreign Direct Investment - No foreign investment is permitted in the Real Estate Sector, except for the development of integrated townships and settlements where FDI up to 100% is permitted with prior Government approval. NRIs are allowed, subjected to certain conditions to invest in the following activities: Development of serviced plots and construction of built up residential premises.
Entry norms - The foreign investor should have a Joint venture (JV) with Indian partner (s). The foreign investor should have a fully owned subsidiary in India. The foreign investor should have be registered under the Indian Company Act (ICA), 1956. The foreign investor should have a record of successful execution of related projects.
Funds - NRIs are permitted to invest up to 100% in the new issue of equity shares / debentures of Indian companies engaged in the following areas: Development of serviced plots and construction of residential premises.
FAQ's
FAQ
1.
Am I an NRI?
Under the Foreign Exchange Regulation Act of 1973, Non-Resident Indians are: Indian citizens who stay abroad for employment or carrying on business or vocation outside India or for any other purpose in circumstances indicating an indefinite period of stay abroad.
2.
Who is a foreign citizen of Indian Origin?
A foreign citizen is deemed to be of Indian Origin if:
He held an Indian Passport at any time or
He or his father or paternal grand father was a citizen of India.
3.
What should a buyer keep in mind while purchasing a residential flat?
Some of the factors to consider while purchasing a flat are:
Locality, meaning to transport, schools, hospitals, market, business district, entertainment centers, hotels, restaurants, pollution levels, Car parking space
Quality of construction
Reputation of the builder or seller
Sufficient water and electric supply, other utilities.
In what manner the purchase consideration for the immovable property should be paid under the general permission?
The purchase consideration should be met either out of inward remittances in foreign exchange through normal banking channels or out of funds from any non resident accounts maintained with banks in India.
4.
Is there any restriction on the number of residential properties that may be purchased by an NRI?
There are no restrictions on the number of residential properties.
5.
What are the guidelines for acquisition of agricultural land / plantation property / farmhouse by NRIs and foreign citizens of Indian origin?
All requests for acquisition of agricultural land / plantation property / farm house by any person resident outside India may be made to The Chief General Manager, Reserve Bank of India, Central Office, Exchange Control Department, Foreign Investment Division.
6.
Can sale proceeds of such property if and when sold be remitted out of India?
In India by a NRI or PIO, the authorized dealer may allow repatriation of the sale proceeds outside India, provided all the following conditions are satisfied:
The immovable property was acquired by the seller in accordance with the provisions of the Exchange Control Rules/Regulations/Law in force at the time of acquisition, or the provisions of the Regulations framed under the Foreign Exchange Management Act, 1999.
In the case of residential property, the repatriation of sale proceeds is restricted to not more than two such properties, if the property was purchased from funds held in NRE Account.
7.
Does RBI have any guidelines for loans to NRI's/PIO's?
Yes. There are guidelines issued by the Reserve Bank of India for grant of Housing Loans to NRIs. The guidelines are:
The loan amount shall not exceed 85% of the cost of the dwelling unit.
Own contribution, which is the cost of dwelling unit financed less the loan amount, can be met from direct remittances from abroad only through normal banking channels.
li>The loan amount shall not exceed 85% of the cost of the dwelling unit.
Repayment of the loan, comprising of the principal and interest including all the charges are to be remitted from abroad only through normal banking channels.
Property Care for NRIs
Property Care for NRIs
SELLING SERVICES For Saleable Property, we can:
Locate buyers for you
Handle all legal matters relating to sale - conveyancing, sale deed, etc.
Handle all government formalities - CMDA, Registrar Office, Tahsildar, etc.
Handle all taxation formalities - Income Tax clearances, etc.
BUYING SERVICES
We can assist you to purchase flats / bungalows /land in and around Chennai. We can:
Identify suitable properties for purchase
Verify title deeds/encumbrance certificates
Handle all other legal matters relating to purchase
Handle all government formalities, such as dealing with:
Urban Land ceiling Dept.
Chennai Metropolitan Development Authority
Tahsildar Office / Registrar office
Handle all taxation formalities
For purchase of flats under construction, we can additionally follow up for:
Prompt receipt of real estate documents from builders
Getting legal opinion, property valuation
Make periodic visits & give feedback on construction progress
