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Tips for NRIs to buy property

Saturday, January 21, 2012
By Prerna Pandey

Buying a house in India may have become exceedingly simple for Non Resident Indian (NRIs). And, property sales may have been not so great the previous years, but realtors are hoping for a property sale rise this year. Owning a property is the topmost dream of every Indian.
So, here is a detailed account of what all you need to do if you are an NRI wanting to buy a property in India.

PIO – proof for eligibility

If you are a citizen of Indian origin with an US or UK passport wanting to buy a property in the country, you need to have a Person of Indian Origin (PIO) certificate as an eligibility proof. If you do not have such a certificate of your own you can produce your mother’s or your father’s birth certificate for eligibility. You will have to submit these documents at the Indian Embassy of your country.

Exchange control regulations

Over the years, the restrictions relating to investment by NRI in Indian property have been considerably lessened. Unlike earlier, there are no restrictions or authorisations needed for an NRI wanting to buy property in India.

One can easily buy a property with the funds received though regular banking ways. A NRI can also hold a Foreign Currency Non-Resident FCNR account, Non Residential External (NRE) account or a Non Resident Ordinary (NRO) account to make a property purchase.

A NRE account is for pay outs and a NRO account is for depositing and transferring the money to NRE account for reparation purposes.


After the relevant income tax and capital gains during the sale proceedings are deducted from your account, you can repatriate the funds from your NRE account to your foreign account i.e. if you are dealing through one.

Selling property

A NRI or a PIO can sell an immovable property to other NRI, PIO or a person residing in India without any hassles or permission from the Reserve Bank of India.
Purchase or sale of a farm house or agricultural land is not permitted although gifting an agricultural land, farm house or plantation land is permitted to a resident and citizen of India. A NRI or a PIO can also gift an immoveable property to a resident of India, a NRI or a PIO.

Renting property

A NRI can rent an immoveable property. But the rental income or any profit made by this income by making investments is eligible for repartition for payment of taxes and payment of a certificate produced by a chartered accountant.

Power or Attorney

It will be wise if you give the power of attorney to an Indian resident you trust if you only visit the country once in a year or so. If, in your absence, any paper work that requires your presence like registration of property, rental or leave and licence agreement etc. is required, it can be handled by the power-of-attorney holder.

Home loan

You can also avail a home loan in India to purchase a property. You can get around 85 per cent to 90 per cent of the property value in loan. The loan however will be disbursed to you only when you buy the property.


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