NRI Services

NRI Services

For Buying Property

Ques. What should a consumer keep in mind while purchasing housing flat?

Ans. Some of the factors to consider while purchasing a flat are: Locality i.e. transport, schools, hospitals, market, business district, entertainment centers, hotels, restaurants, pollution levels, etc. Quoted area of the flat, i.e., carpet, built up area and super built up area Car parking space quality of construction reputation of the builder or seller Sufficient water and electric supply, other utilities Cost components: price, stamp duty, registration charges, transfer fees, monthly outgoings and society charges, costs of utilities Potential for resale or renting out of the property any other distinguishing features or advantages of the property.

Ques.  What is the checklist for buying a residential property?

Ans. Keep in mind the following things while buying a residential property: Market Trends about prevalent rates of property in the vicinity and last known transactions ask for photocopies of the all deeds of title related to the property to be purchased. Examine the deeds to establish the ownership of the property by seller, preferably through an advocate. Ascertain the survey number, village and registration district of the property as these details are required for registration of the sale. Previous encumbrances and loans, if any on the property must be cleared before completion of purchase of the property. The title of the Vendor to the property must be clear and marketable. Check for approved layout plan and approved building plan with number of floors clearance from municipality, electricity, water, pollution and lift authorities check the building bye-laws in that area to verify any issue with setback, side setback, height, etc. Confirm transfer fees, stamp duty and registration charges to be paid on purchase of the property as well as outgoings to be paid for the property, i.e., property tax, water and electricity charges, society charges and maintenance charges.

Ques. Do NRIs require consent of the Reserve Bank to buy immovable property in India?

Ans. No, NRI's do not require permission to buy any immovable property in India other than agricultural/plantation property or a farmhouse.

Ques. Is there any limit on the number of housing properties that may be purchased by an NRI?

Ans.There are no limits on the number of residential properties that may be bought by an NRI. However, repatriation (the process of converting a foreign currency into the currency of one’s own country) is allowed only in respect of two such properties.

Ques. Does RBI have any guidelines for loans to NRIs/PIOs?

Ans. There are guide lines issued by the Reserve Bank of India for grant of housing loans to NRIs. The guidelines are: The loan amount shall not exceed 80% of the cost of the housing unit. Own contribution, which is the cost of housing unit financed less the loan amount, can be met from direct remittances from abroad only through normal banking channels, your Non-Resident (External) [NR (E)] Account and /or Non-Resident (Ordinary) [NR (O)] account and /or Non-Resident Special Rupee account [NRSR] in India. Reimbursement of the loan, comprising of the principal and interest including all the charges are to be remitted from abroad only through normal banking channels, your Non-Resident (External) [NR (E)] Account and /or Non-Resident (Ordinary) [NR (O)] account and /or Non-Resident Special Rupee account [NRSR] in India.

Ques. Can authorized dealers grant loans to NRIs for purchase of a flat/house for residential intention?

Ans. Authorized dealers have been granted permission to grant loans to NRIs for acquisition of house/flat for self-occupation on their return to India subject to certain conditions. Repayment of the loan should be made within a period not exceeding 15 years out of inward remittance through banking channels or out of funds held in the investors' NRE/FCNR/NRO accounts.

Ques. Can authorized dealers grant housing loan to NRIs where he is a principal borrower with his resident close relative as a co-applicant / guarantor or where the land is owned jointly by such NRI borrower with his resident close relative?

Ans. Yes. Such housing loans availed in rupees can also be repaid by the close relatives in India of the borrower.

Ques. What are the documents required along with the application?

Ans. The following documents are normally required to be submitted along with the application: Photocopy of the labor contract and English translation duly countersigned by your employer latest salary certificate (in English) specifying the following: name (as it appears in the passport), date of joining, passport number, designation, perquisites and salary. Photocopy of labor card/identity card photocopy of valid resident visa stamped on the passport photocopy of monthly statement of local bank account for the last 4 months. Property related documents.

Ques. Can an NRI take loan against the security of immovable property in India? Are there any restrictions on the use of loan amount?

Ans. An NRI can borrow against the security of immovable property from an authorized dealer subject to following conditions: The loan should be used for meeting the personal requirements or for borrower's own business purposes; and loan should not be used for forbidden activities, namely; business of chit fund, or agriculture or plantation activities or in real estate business, or construction of farm houses, or trading in Transferable Development Rights (TDRs)The loan amount cannot be remitted outside India, repayment of loan shall be made from out of remittances from overseas or by debit to NRE/FCNR/NRO account or out of the sale profits of shares or securities or immovable property against which such loan was granted.

Ques.  What kinds of incentive can NRIs, PIOs and foreigners look forward to in the Indian real estate industry that favors investment?

Ans. The relaxation of FDI in the construction development sector announced in March 2006 allows NRIs, PIOs and all foreigners equal opportunity with their Indian counterparts in the Indian real estate sector. The new guidelines state that before selling, the site has to be developed, constructed upon or fulfill the criteria of a minimum of one year of development. NRIs, PIOs and foreigners can now invest in land, buy it, construct upon it or develop it, sell constructed buildings/developed plots FDI through automatic route can also flow in not just for the housing sector, but also for townships, housing, commercial area, and infrastructure development restrictions on minimum area of land, minimum number of units has been removed minimum constructed area required is 50, designated area is 25 acres.

Ques. How does the automatic route work?

Ans: The automatic route has simplified much of the cumbersome investment process. Approval from the Reserve Bank is not required anymore and there is also no need to go to the Foreign Investment Promotion Board. The easing of paper work and relaxation of formalities has given a boost to overseas investor confidence for investing in India.

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