NRI / PIO Buying Property in India
Foreigner / PIO / NRI Buying Property in India
With the property market in India witnessing a rapid growth over the last decade, there is tremendous amount of interest for purchasing property in India from persons residing outside of India. In this article we look at the relevant rules and regulations surrounding the acquisition and transfer of immovable property in India by Non-Resident Indians [NRIs], Foreign Nationals and Foreign Nationals of Indian Origin.
Who is considered a Person Non-Resident in India or a NRI?
Under FEMA Act, 1999, a person resident in India is defined as a person residing in India for more than one hundred and eighty two days during the course of the preceding financial year and who has come to or stays in India either for taking up employment, carrying on business or vocation in India or for any other purpose, that would indicate his intention to stay in India for an uncertain period. Therefore, any person who does not satisfy the above condition is considered to be a Non Resident Indian. In simpler terms a person has to satisfy both the conditions of 182 days stay in India and also comply with the purpose/intention of stay to be a resident of India.
Which category of persons residing outside of India can freely purchase property under the general permission available?
Non-Resident Indians (NRIs), that is a citizen of India, resident outside of India and Person of Indian Origin (PIO) (not current being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan) who at any time held an Indian Passport or whose father or grandfather was a citizen of India is covered by the general permission. Those covered under the general permission can purchase residential and/or commercial property freely in India.
Should any documents be filed with RBI when a NRI or PIO purchases or transfers an immovable property?
No. Since, NRIs and PIOs are covered under the general permission for purchase and transfer of residential and/or commercial property, no documents are required to be filed wit the Reserve Bank of India (RBI).
Can NRIs or PIOs acquire agricultural land/plantation property/farm house in India?
NRIs and PIOs require specific approval from Reserve Bank of India for purchase of agricultural land/plantation property/farm house in India.
Can a foreign national of non-Indian origin resident outside of India purchase immovable property in India?
No, a foreign national of non-Indian origin resident outside of India cannot purchase any immovable property in India. However, he/she may take residential accommodation on lease for a lease term of less than five years.
Can a foreign national who is a person resident in India purchase immovable property in India?
Yes, a foreign national who is a person resident in India can purchase immovable property in India after fulfilling any requirements if any, prescribed by authorities, such as the concerned State Government.
Can a non-resident inherit immovable property in India?
Yes, a person resident outside of India who is a NRI, PIO or a foreign national of non-Indian origin can inherit and hold immovable property in India from a person who was resident in India.
Can an NRI/PIO/foreign national sell or gift residential/commercial property in India?
NRIs and PIOs can freely sell / gift any residential or commercial property held by them in India to a person resident in India or NRI or PIO. Foreign Nationals of non-Indian origin have to obtain the approval of RBI for selling of property in India.
How can an NRI/PIO make payment for purchase of residential / commercial property in India?
Payment for purchase of immovable property in India by NRIs or PIOs can be made by funds remitted through normal banking channel or by funds held in NRE/FCNR(B), NRO account maintained in India. Payment for purchase of property cannot be made by travellers cheque or by foreign currency notes. Payment cannot be made outside of India.
Can NRIs / PIOs avail housing loan in rupees for purchase of property in India?
Yes, NRIs and/or PIOs can avail of housing loan in rupees from a housing finance institution. A housing loan in India can be repaid by way of inward remittance through normal banking channel, debtit to NRE/NRO account, rental income in India or from close relatives of the borrowers.