Legal provisions – purchasing property by NRIs in India

If you are a Non-Resident Indian and not aware about the legalities of owning or purchasing real estate in India, you would like to read on to enlighten yourself on the legal provisions set by the competent authorities pertaining to the purchase or owning of an immovable property in India under the Foreign Exchange Management Act (FEMA). As per the act, NRIs and persons of Indian origin (PIOs) are treated at par for the purpose of investment in real estate in the country.

With regards to the Types of properties, where NRIs or PIOs can invest, The Reserve Bank of India gives general permission to NRIs to purchase any residential or commercial property in India. As per the guidelines, the investor is neither required to seek any specific permission nor send any communication or intimation in this regard to the RBI. Under the existing general permissions as well as the Income Tax laws, an NRI is permitted to purchase any number of residential or commercial properties in India.

However, under the same general permissions, an NRI is not allowed to purchase any agricultural land or plantation property like farmhouses in the country. Nonetheless, if an NRI wishes to buy a farmhouse or plantations, he will be required to approach the RBI for a specific permission which will be considered on a case-to-case basis.

With regards to joint ownership in real estate, An NRI can purchase the property either as a single owner or jointly with any other NRI. However, a resident Indian or a person who is otherwise not eligible to invest in a property in India cannot become a joint holder irrespective of the second holder’s contribution towards the purchase.

Further, in case a person who already owns a property in India becomes an NRI later, he can continue to hold the property in his name in India even if it is an agricultural land, plantation property, or farmhouse that he owned when he became an NRI. NRIs are permitted to lease out the property irrespective of when it was acquired and the rent received from such property can also be remitted, but only after appropriate Indian taxes have been paid on such receivables.

With respect to sale or transfer of property owned by a Non-Resident Indian, he is allowed to sell or gift an immovable asset to any person resident in India as well as another NRI. However in case of   transfer, sale or gift to an NRI, the property cannot be an agricultural land, a farmhouse or plantation territory.

Real estate management Start-ups turn to NRIs

If you are a Non-Resident Indian and away from your property, you now don’t need to worry about managing your assets from overseas. Realty start-ups are offering property management services at your fingertips at a nominal fee.

While NRIs invest in domestic real estate market to channelize their funds, it becomes difficult for them to deal with day-to-day transactions with regards to their property. One such startup PropCare, aims to be a point of contact for all property related services like leasing/renting, maintenance and legal documentations at just 2 per cent of annual rental or Rs 25,000.

Prop Care presently offers these services only in Gurgaon but plans to expand its operations to Bengaluru, other parts of Delhi NCR, Mumbai and Pune covering all the main real estate hubs  in the first phase of growth, company’s founder and CEO  Amit K Lalit has announced.

“Our focus is NRI property management. We manage negotiations between tenants and landlord, renting agreements, payment of all utility bills, interiors as well as legal documentation and rent collection/deposit to client’s accounts,” Lalit said.

According to experts, this space has a huge potential and will witness good amount of action in the coming years. such property management companies become a vital coordination platform for Non-Resident Indians as all their asset management needs are taken care of, while they are back home.

Premium realty project for Dubai NRIs in Thane

Piramal Realty has launched a premium residential tower Vivaan for NRIs in Dubai. The real estate arm of Piramal Group is developing Vivaan in Balkum, Thane exclusively for Dubai based Non Resident Indians.

Vivaan is the central tower in a residential complex, Piramal Vaikunth which spreads over 32 acres with a total of 14 towers.

The tower boasts of 60 2-BHK apartments with carpet area ranging from 949 sq ft to 1,027 sq ft Piramal realty has already begun bookings with a special offer price for 30 select residences. Speaking at the launch, the Executive Director of Piramal Group, Anand Piramal said, “We hope to see a good response for Vivaan as Mumbai is the first choice for NRIs in Dubai and buyers appreciate high-quality real estate.”