Can NRIs avail Home Loans in India?
The Reserve Bank of India has issued certain guidelines for granting loans to Non-Resident Indians by Housing Finance Company. The guidelines are:
- The loan amount should not exceed 80% of the cost of the dwelling unit.
- Own contribution, which is the cost of the dwelling unit can be financed, less the loan amount, can be met from direct remittances from abroad through normal banking channels, from the Non-Resident (External) account in India and /or the Non-Resident (Ordinary) account in India.
- Repayment of the loan, comprising of principal and interest including all charges are to be remitted to HDFC from abroad through normal banking channels, from the Non-Resident (External) account in India and /or the Non-Resident (Ordinary) account in India.
Can I buy immovable property in India?
Acquisition of immovable property
Acquisition of immovable property by NRI's holding Indian passport: Non-Resident Indians holding Indian passport do not require prior permission of Reserve Bank of India to buy residential or commercial immovable property in India.
The purchase consideration may be paid either by remittance of funds from abroad through normal banking channels or out of NRE/NRO/FCNR account.
Non-Resident of Indian nationality does not require any permission for acquisition, transfer, or disposal by way of gift of immovable property which is not a farmhouse or agricultural land or plantation property. Declaration on form IPI-7 for acquisition of commercial property for carrying on any industrial, commercial, or trading activity by their property/partnership firm in India is required to be filed with RBI within 90 days from the date of purchase.
Acquisition of immovable property by foreign citizens of Indian origin
Under the general permission to Non-Resident Indians holding foreign passport, the Reserve Bank of India has allowed them to acquire, hold, transfer or dispose of by way of sale or inheritance, immovable properties situated in India.
A foreign citizen shall be deemed to be of Indian origin, if he has held an Indian passport at any time; or he or his father or paternal grandfather was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955).
Acquisition of immovable property by foreign nationals of Non-Indian origin
Foreign Nationals of Non-Indian origin (whether resident in India or not) are permitted on application to Reserve Bank of India (Form No- IPI 1) to acquire , hold, transfer or dispose of immovable property provided the following conditions are satisfied.
- The purchase consideration is made out of foreign exchange remitted from abroad in any convertible foreign currency through normal banking channels.
- The property to be acquired is only for bonafide residential use.
- The Foreign National of Non-Indian origin will provide an undertaking not to repatriate the sale proceeds at any future date.
- Investment in ready-built house is permitted.
- Investment in vacant plot is not allowed.
- One unit for residential purposes is allowed.
- Consideration will be made on a case by case basis only.
- In the absence of a specific circular, it may be necessary for a foreigner of Non-Indian origin to obtain RBI's prior permission before letting out the residential premises acquired by him
General Permission to Foreign Companies
The Reserve Bank of India has granted general permission to foreign companies to acquire or hold any immovable property which is necessary for or incidental to any activity carried on in India. The foreign companies engaged in manufacturing or trading activity will be permitted to open branches in India for the following purposes:
- To represent the parent company/ other companies in various matters in India. E.g. acting as buying/selling agents in India.
- To conduct research work in which the parent company is engaged provided the results of the research are made available to Indian Companies.
- To undertake export and import trading activity, and
- To promote technical and/or financial collaboration between Indian companies and overseas companies.
Can NRI's resell their immovable property in India? Can NRI's let out their immovable properties in India?
Permission to let out Immovable Property
The Reserve Bank of India has also granted general permission to Non-Resident Indian citizens of Indian origin, to let out their residential properties acquired for their bonafide residential purpose but which on account of their residence abroad, are not required for their immediate residential purpose.
Sale of immovable property
The Reserve Bank of India has granted general permission to Non-Residents holding Indian passports and foreign citizen of Indian origin, whether resident in India or not, to dispose of by sale or inheritance of immovable properties situated in India subject to certain conditions. However, such property can be sold to another foreign national of Indian origin provided funds towards purchase consideration are either remitted to India or paid out of balances in NRE/FCNR accounts.
Can NRI's repatriate their funds invested in immovable property in India?
The Reserve Bank of India has granted general permission to Non-Residents holding Indian passports and foreign citizen of Indian origin to repatriate original investments equivalent foreign exchange in residential/commercial properties after obtaining prior approval subject to maximum of two houses, provided that:
- The residential properties are purchased on or after 26th May 1993.
- The properties have been purchased from the remittances from abroad or from NRE/FCNR account in India.
- The properties are not transferred or disposed of by way of sale for a period of three years from the date of final purchase deed or from the date of payment of final installment where the agreement for purchase so provides.
- Only amount of sale proceeds equivalent to the original investment in foreign exchange, if sold after three years, will be allowed to be repatriated outside India and the balance amount of sale proceeds of the property should be credited to seller's Non-Resident Ordinary (NRO) Account with an authorized bank in India.
- The person intending to repatriate the original investment made in residential immovable properties shall submit it within a period of 90 days of sale of the property an application in Form IPI 8 to the below address.