Who can invest in real estate in India?
Who can invest in real estate in India?
Apart from Indian citizens a few others are also permitted to invest in residential and commercial real estate in India. PIOs (Person of Indian Origin) & NRIs can invest in immovable assets in India. Even spouse of an NRI is treated as an Indian citizen and hence allowed to purchase property in India. Overseas Corporate Bodies (OCBs) predominantly owned by NRIs (atleast 60%) including trusts are allowed to own properties in India. Foreign organisations and individuals need special permission from RBI to acquire any form of real estate in India. Processes get simpler if it’s a lease for only 5 years.
What kind of real estate investment can NRIs & OCBs make in India?
NRIs and OCBs can invest in residential property in India. But it should be occupied or rented out immediately. NRIs & OCBs are allowed to invest 100% in plots, residential townships, infrastructure, manufacturing building material and construction of residential or commercial premises in India. They can also invest in financing housing projects. However neither NRIs nor OCBs can acquire any form of agricultural, plantation or farm land in India.
What rules govern the income earned with such properties by NRIs?
You cannot repatriate the funds outside India in general. The income generated will be credited to an NRO account (Ordinary Non-resident Rupee). However RBI allows repatriation to a maximum amount of the original value of purchase. It’s permitted for maximum two properties held for three years or longer. Repatriation in the form of shares and debentures can also be done after a lock in period of three years. Income in the form of rentals cannot be repatriated and it will be maintained in an NRO account by a bank in India.
What is the maximum amount of home loan one can get from a bank?
One can get home loans from banks and other financial institutions upto 80% of the total value of the property. Eligibility of 80% of loan depends on an individual’s track record and credit history. One might get a home loan for 80% of the value or their eligibility, whichever is lower. Pre-approved loans can also be availed but these have a validity period depending on the concerned bank and financial institution. Again not everyone is eligible to avail a pre-approved loan. The bank will exercise discretion in the matters of home loan and the amount of home loan to be given.
Can one co-own the property and with who?
Yes, you can co-won a property. Joint ownership of property is permitted with the spouse, son, daughter, father or mother. However each financial institution might have specific rules applicable for co-ownership when home loan comes into play. Co-owners of the property are required to be the co-borrowers of home loan.
- by Anupriya Dharma for IndiaProperty.com
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